Fraudulent practices are putting a dent in Australia’s global reputation as a food producing powerhouse, as a Deakin report shows the country’s food and fibre products are highly vulnerable to fraud.
Beef, veal, wine, fish and molluscs are identified as high risk, with an estimated economic cost between $700 million and $1.3 billion a year. The cost of fraud in the sheep meat, dairy products, wheat, wool and horticulture sectors costs another $400 million to $700 million annually.
These figures represent a significant challenge for the sector and are a serious blow to producers who work hard to produce sustainable, quality food and fibre products for domestic and international consumers.
The new insights are part of a Deakin research report, commissioned by AgriFutures Australia to quantify the size of the product fraud problem facing Australia’s rural industries and to highlight opportunities, both domestically and internationally, to combat it.
The report, Product Fraud: Impacts on Australian agriculture, fisheries and forestry industries, found that most losses can be traced to six fraudulent practices: adulteration, concealment, counterfeiting, dilution, mislabelling and substitution.
Product fraud deceives consumers by providing them with a lower quality product without their knowledge. Incidents of product fraud are commonly linked to shortages or constraints in the supply of raw ingredients.
Product fraud is on the rise and already causing significant harm to Australia’s reputation for producing high quality goods, according to Deakin University Centre for Regional and Rural Futures director, Professor Rebecca Lester.
“Guaranteeing a product’s origins can be costly, but authentic testing places emphasis on early detection and prevention, rather than responding to problems once they occur,” Lester said.
“Technology has come a long way and avenues now exist to guarantee product authenticity through analytical testing of the product itself. Technologies such as next-generation DNA sequencing, DNA chips and lab-on-a-chip technology offer great potential for effective, low-cost and rapid onsite solutions for a broad range of authentic testing of products.”
Lester says many producers are not aware of the risk of food and fibre fraud.
“Many producers are not even aware of the risk once their product leaves the farm or boat, but it may be costing them dearly,” she said. “Industry must arm itself with better information about what to look for and strategies to respond if confronted by fraudulent activity. Getting on top of the problem could save the sector up to $3 billion annually.”
According to AgriFutures Australia manager Rural Futures, Georgie Townsend, ultimately it is producers and businesses along the supply chain who lose out through lower returns and risks to brand reputation.
“Farmers can’t combat this issue alone; a coordinated supply chain approach is needed if we are to overcome the billion-dollar problem and stamp out fraudulent practices,” Townsend said.
“This work is important in quantifying the situation and gives producers, exporters and retailers market mechanisms and technologies to detect and mitigate fraudulent activity.”
To read the full report, click here.