Food crime is costing the UK economy as much £2bn per year, new research by the Food Standards Agency has revealed.
In one of two reports published by the regulator today, The Cost of Food Crime estimated the cost of food fraud to consumers, businesses and government ranged between £410m and £1.96bn every year – placing a “heavy burden” on the food sector.
The wide range in the estimated total costs of food crime represented the disparity between officially reported crime statistics and unreported activity, the FSA report said.
“Many frauds are not discernible to their victims, be that businesses or consumers, and the report assesses that food fraud is underreported,” an FSA spokeswoman added.
As a result, the report admitted further research was required to “develop the quality of data in order to narrow the range with confidence”.
Once a food fraud had been committed (excluding prevention costs), each case was estimated to cost between £16,000 and £151,000 for small cases and between £423,000 and £7.2m for larger cases, depending on crime and food type.
In larger cases (representing approximately 13% of the fraud total), the burden fell more sharply on business through the loss of property from purchasing criminalised goods. A larger share of the burden fell on government in smaller cases through justice costs, the FSA said.
In response to the findings of the report, the regulator’s CEO Emily Miles said “there will always be a threat of criminality in the food system” and it was working to support food businesses.
“This is one of the reasons why we launched a working group to explore together whether some areas of our collective response to food crime can be improved,” Miles added.
She pointed to action undertaken after a major meat fraud scandal emerged in the spring, which saw a supplier pass off tens of thousands of tonnes of imported pork as British every week through a complex deception.
“Together, we’re making it easier to share intelligence and information by helping people who work in the food system to share their concerns with us freely and confidentially,” Miles added.
The Food Fraud Working Group has now outlined plans to launch a new freephone number for the FSA’s existing food fraud hotline to make it easier for people to share their concerns.
Additionally, it proposes working with the industry on ways to encourage food fraud whistleblowing and strengthening information sharing arrangements between the third-party auditors used by food businesses and the FSA to help prevent criminal activity.
It is also proposing improving how the FSA issues intelligence-based alerts to better warn food businesses about potential food fraud in supply chains.
Also published today was the agency’s ‘What Works to Prevent Food Fraud’ report, which highlighted ways to complement food fraud prevention work and strengthen lines of defence against fraudsters - which follows the FSA’s pledge to improve its approach following the meat fraud scandal.
“We are pleased to be taking action with the FSA and our partners in the food industry to strengthen the way we can prevent food crime in our supply chains,” said Helen Sisson, director and co-chair of the Food Industry Intelligence Network. “Co-operation and communication between every part of the food system is vital to protect the public and the global reputation of UK food.”
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