Food fraud – Does the punishment fit the crime?

Hines made the comments during a panel discussion alongside Andy Morling, head, Food Crime Unit, Food Standards Agency (FSA) and Prof Lisa Jack, accounting, University of Portsmouth Centre for Counter Fraud Studies. ​

Next Generation Sequencing

The session called ‘Food & Drink Fraud: ‘Protecting your supply chains’, was chaired by Michael Stones, group editor, Food Manufacture, and organized by William Reed at Foodex, The NEC, Birmingham (April 18-20).

Stones asked the panel what remedies are available to prevent food crime to which Hines talked about Next Generation Sequencing​ (NGS), a DNA diagnostic tool which identifies the biological content of a food sample, including meat, microorganisms, plants, seafood and allergens.

For example, with just one test, NGS DNA sequencing will tell you exactly which meat species are present in a hamburger.

“NGS will now tell us what we are looking at. Science is moving ahead at a pace and some of the work at Leatherhead is groundbreaking in this area​,” he said.

“The cost of this type of testing will come down and it will become more standardized, we need to do more with less and systemize what we are doing across the industry, sharing information​.” ​

Jack said we could learn a lot from the insurance industry which over the years has become more resilient to fraud and has more management policies.

She said companies need to look at having a fraud action plan, a whistle blowing policy, training in place so employees are aware of what might be fraud.

“Protection is certification but there are other vulnerabilities, we are talking about an industry with a lot of small to medium enterprises. It’s a question of learning and putting some simple analogies into place​,” she added. 

According to Morling, we need to establish more information sharing, but manufacturers feel there are some barriers as to what the FSA wants to know.

Maximum sentence of 10 years in prison

“I assume all industry wants to know what I want from them but that is not the case. We need to explain what are the red flags they need to look for and that needs to be permeated across their workforce. Companies need to put a mechanism into place to go to their line manager if they hear or see anything unusual and report this to the FSA​,” he said.

“Does the punishment fit the crime? Yes, but the problem is we are not always approaching it as fraud but as a regulatory breach. We need to gather evidence and demand a maximum sentence of 10 years in prison​.”

Hines agreed with Morling and said it’s important the penalties fit the crime and ‘we are going a long way towards that as we move forward’.

“One thing that is overlooked is it is difficult to get a prosecution or to get the police to take a food fraud case if they are overstretched, from a practical point of view maybe there is an area of civil law that hasn’t been fully explored​,” added Jack.

“It’s so fragmented, supply chains and supply chain networks change all the time so it’s a difficult traceability challenge, it’s difficult to put a case together​.”

Morling added: “We shouldn’t look at these things at food law offences but fraud. A fraud investigation is very challenging, so you can see the attraction of a straightforward regulatory penalty, we need a few visible prosecutions to send out a deterrent message to the rest of the industry.”

“We need to do more with less, from an enforcement point of view, testing, vulnerability assessments, asking awkward questions, changing the way we audit, if the price is too good it might well be too good, we need to be more cautious about who we buy from and where we buy from​,” said Hines.

“People have started to ask more questions, it’s important to train staff to ask the right questions, the resources aren’t available but it’s about building up resilience in your own company​,” added Jack.

Companies are scared to share intelligence

Morling believes companies are scared about sharing intelligence in case they themselves are prone to prosecution. They are not secure in the information they share and that their information will be treated fairly.

“I’ve tried to get the industry into place by making them feel more comfortable about sharing suspicions and raising concerns. They are worried the information will be printed in the media and the information will publicly shame them. It’s a potential conflict​,” he said.

“We suggested a new stance, not across the whole FSA but a national crime unit which would use our exemptions from disclosure for FOI (Freedom of Information) requests in not disclosing that information. We want to respect their interests and maintain that confidence in coming to us​.

“Law enforcement would fall apart tomorrow if sources were disclosed to the general public appropriately. That will not happen on my watch, I can guarantee that​.”

Hines added a lot of education needs to be done in the supply chain and the pattern of sharing.

“It’s going to take a while before it goes public, it will happen but it will take time from the top. We admit the systems in place did fail during the horsemeat scandal​,” he said.

“It’s a question of education and understanding what the red flags are, are you alert and asking the right questions about not only your suppliers but your internal teams. Sometimes large companies miss things in due diligence​,” said Jack.

Calling for industry whistleblowers

“The Danes and the Dutch employ full time forensic accountants in the food industry. I would like to see the same here​.”

Morling said FSA investigations led to the arrest of man who was selling a poisonous chemical for human consumption in a dietary supplement, which killed six people in the UK last year.

“We removed that dangerous product from the market which was a highlight for me. We are keen now to tap into employees who work within the food industry who might want to become whistleblowers and report criminality directly to us. There are four million people employed within the food industry who know about incidents I would like to know about​,” he added.

“It’s good to see people are asking better questions and are more aware of red flags, but how can we educate people in the industry to become more resilient to fraud​,” said Jack.

“In the future, I would love it if my phone could scan a product and convey exactly what it says on the packet​,” said Hines.

“I would like to see a joined up approach from border controls, police and those within the industry who have insider ‘gossip’. They don’t know the value of what they know because they don’t know what to do with the information they have. They don’t appreciate the value of what they know. Let’s get them in a joined up, grown up, unilateral system for sharing​.”