Inside Australia’s $3 billion food fraud puzzle

Imagine doing your regular grocery shop to put a dinner of steak and vegies on the table. Except the beef you bought is made of donkey or buffalo, the glaze on your carrots you thought was honey is partly sugar syrup, and your organic vegetables aren’t organic.

Even your herbs may not be what they say they are.

“In some of the mixes, none of the species that were labelled were actually in the jar,” said Deakin University professor and Centre for Regional and Rural Futures director Rebecca Lester, citing findings from a 2019 global study that blew her away (27 per cent of nearly 6000 herbal products were adulterated).

“I just thought that was absolutely shocking.”

Ms Lester is co-author of a newly released report about food fraud, a $50-billion-a-year global problem – $3 billion in Australia – that, for the most part, flies under the radar. The issue of food or products deceptively containing lower-quality ingredients is one that even the experts find puzzling; the report describes the scale and nature of this problem in Australia as “largely unknown”. There isn’t even a singular definition of product fraud agreed upon worldwide.

“It’s difficult to tell how big a problem it is within Australia because there are just not a lot of studies that actually test,” Ms Lester said. “We don’t have common commercial labs that are doing this on a regular basis, so most examples are from overseas, or from specific research projects.”

What foods can be faked, and what does food fraud look like?

“Potentially anything,” said Ms Lester. “It is everything from meat, to dairy, to vegetables, herbs and spices, honey, olive oil.”

The beef and veal, wine and seafood industries have proven particularly vulnerable to fraud. “This is because there’s a huge difference between the cheap end of the market versus the high end of the market … that’s certainly where you can make the most money.”

At its worst, food fraud can lead to serious illness or even death. The 2008 Chinese milk scandal, in which milk and infant formula was laced with the chemical melamine to artificially increase protein content, resulted in the death of six babies who died from kidney damage. Some 54,000 children were hospitalised.

Food fraud can be recognised and placed into at least six different categories: mislabelling, dilution, substitution, adulteration, counterfeiting and concealment.

Mislabelling, in which a product is simply not what it says it is, is one of the most common types of product fraud, says Ms Lester: “you think you’re buying snapper – it’s not.”

Concealment occurs when fraudsters slap an “organic” or “halal” label on something that isn’t and charge more. Meanwhile, dilution is known to occur with milk, juice and especially wine.

Substitution is common in processed foods, such as ground meat. A 2019 study from Egypt found that 87 per cent of ground “red” meat contained chicken or donkey meat. Adulterated products contain lower-quality ingredients, such as honey-flavoured syrup in honey, to bring costs down.

Murky origins: Where does it all go wrong?

Somewhere along the way of getting a product from the farm to the supermarket shelf, something goes wrong, said Ms Lester. An unscrupulous farmer could be spraying “all sorts of things” on their crop, but labelling it as organic. An abattoir might be covering up buffalo or donkey meat as beef.

It could easily happen in packaging, she added. “If you think about fruit and vegetables, they often come in really big boxes, and the labelling is all on the box or the sticker. It’s not that difficult to take one box and put on something that has an organic label.”

Tony Battaglene, chief executive of the Australian Grape & Wine Association, believes Australia does not have a major issue of wine fraud domestically.

The same can’t be said about Australia’s exported wines. “The more common way that we see [wine fraud] is copycat products,” he said. Bottles of “Benfolds” wines have been sold in mainland China for more than a decade. “If you don’t know what you’re looking for, and if English isn’t your native language, these can be passed off as that.”

Mr Battaglene said major online Chinese retailers have told him that 70 per cent of the products sold on their website were copycats. China’s trade restrictions on wine have limited Australian producers’ access to the Chinese market and reduced visibility over the scale of the problem.

At the end of the day, just about everyone is worse off. “[Wine] producers are enormous losers because their brand can get trashed … consumers are big losers because in some cases, there are products unfit for consumption.

“The only winners are the crooks.”

What we can do about it

Addressing the slippery issue of product fraud would involve a number of factors. If consumer awareness of food fraud was elevated, businesses would probably respond in kind, according to Ms Lester.

“I think there’s a misconception that this isn’t a problem, and people are able to trust what it is they’re buying,” she said.

Another part of the problem is that some industries and businesses are choosing to bury their heads in the sand. Technology also has a major role to play, but it comes at a significant financial investment. “It almost takes someone who’s willing to be a trailblazer for it.”

Regulation needs more teeth. At the moment, there aren’t really harsh penalties associated with product fraud, says Ms Lester. “If you get caught, it becomes a media story and you get a slap on the wrist, but there’s not really a way to regulate that.” This is more the case when the product is being exported. “That requires a global response. It’s not something we can turn around easily.”

Ms Lester encourages buying local. A shorter supply chain will mean less vulnerability to food or labelling being tampered with. Processed foods will always carry a naturally higher risk of the presence of substituted ingredients.

“A banana is a banana … but as soon as it’s packaged and mixed with other things, there are opportunities for fraud.”