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Food industry ripped off up to $3bn by fraud

Australia's food industry is haemorrhaging an estimated $2-3 billion annually as a result of the growing dilemma of 'food fraud, an Agrifutures Australia report claimed on Monday.

The report recommended 'a coordinated supply chain approach is needed to safeguard Australia’s market reputation both abroad and at home'.

'Food fraud' deceives consumers by providing them with a lower quality product against their knowledge. Incidents of product fraud are commonly linked to shortages or constraints in the supply of raw ingredients.

The report estimated that unrecovered costs due to food and fibre fraudulence involving the 'high risk' commodities of veal, wine, fish and molluscs fell between $700 million to $1.3 billion.

Wayne discussed the food fraud claims on the Flow Morning Show:

According to the report, the cost of fraud in the sheep meat, wool, wheat, horticulture and dairy products sectors is believed to cost the industry up to another $700 million annually.

Georgia Townsend, Agrifutures' National Rural Issues Manager said producers’ pockets are at risk of being raided if the fraudulent activity isn’t addressed:

“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.”
“This work is important in quantifying the situation and gives producers, exporters and retailers market mechanisms and technologies to detect and mitigate fraudulent activity.”

The report was conducted by Deakin University and Professor Rebecca Lester, Director of Deakin University’s Centre for Regional and Rural Futures said it is vital that the industry mitigates risks attached to high-level fraud:

“Guaranteeing a product’s origins can be costly, but authenticity testing places emphasis on early detection and prevention, rather than responding to problems once they occur.”
“Fortunately 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 authenticity testing of products.”
“Many producers are not even aware of the risk of food fraud once their product leaves the farm or boat, but it may be costing them dearly. 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.”


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