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Product fraud could be costing Australia $3bn a year

Penalties for such crimes are “generally lower than for other criminal activities”. (Source: Bigstock)

Purposefully mislabelled and fraudulent goods are costing Australia up to $3 billion a year, according to a new report from Deakin University.

Some of the largest issues raised in the report include the substitution of high value ingredients for those of lower value in order to improve profitability; mislabelling a product to incorrectly portray its quality, safety, or geographic origin; counterfeiting; dilution of product to increase supply; and adulteration, or not declaring certain ingredients which have been used to boost certain claims made about the product, i.e. using melamine to increase protein content without advertising it as an ingredient.

“The drivers behind product fraud are commonly linked to shortages or constraint of supply in raw ingredients, and while our ability to detect fraud continues to improve, there is a need for a whole-of-supply-chain approaches to combat the problem,” AgriFutures Australia business development general manager Michael Beer said.

Penalties for such crimes are “generally lower than for other criminal activities” according to the report, and therefore fail to act as a deterrent.

And some of Australia’s biggest export sectors are highly vulnerable. Beef is “highly” vulnerable to such food practices, with many incidents of sales of ‘Beef’ which is in fact cut with buffalo, donkey, pork and horse meat around the world.

“Misrepresentation of meat species is a common type of food fraud and is expected to continue,” the report said.

“With cattle beef meat about twice the price of buffalo meat, there is a very significant risk of fraudulent misrepresentation of buffalo as beef in Asian markets.”

There also exists the risk of non-halal meats being sold as halal in an attempt to cater to a more niche audience with a more ‘generic’ product.

Lamb, pork, chicken meat and seafood all also carry their own risks and substitutes, as well as Australian wine, wool, honey, oil, saffron, ginger, oregano, turmeric, cumin and truffles.

While this continues to be a large issue in Australia, and Asia-Pacific more widely, the report also notes there are new, emerging innovative technologies that can be harnessed to better analyse goods to determine whether fraudulent activity has taken place.

For example, improvements in DNA analysis techniques now offer improved speed and accuracy at a lower cost, and enable ingredients to be more easily identified and catalogued against the supplier’s claims.

Additionally, mass spectrometry can screen for small molecules that can evade samples, and non-invasive testing methods can now check even packaged goods for adulterants, according to the report.

“A plethora of solutions are needed to make an impact on global fraud,” Beer said.

“A co-ordinated supply chain approach is an important first step to mitigate the potential risks and protect Australia’s reputation in domestic and global markets.”

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