Tackling Australia’s $3 billion food and fibre fraud problem

What is food fraud?

Food fraud costs Australian agriculture, fisheries and forestry industries an estimated $2-3 billion every year. New AgriFutures Australia research highlights the scale of food fraud and product fraud across Australian supply chains. The research also identifies opportunities to protect product authenticity, improve profitability and strengthen Australia’s reputation for trusted food and fibre products.

Australia’s food and fibre products face a high risk of food fraud. For example, beef and veal, wine, fish and molluscs are among the most vulnerable sectors. Together, these industries face estimated annual losses of between $700 million and $1.3 billion. In addition, product fraud across sheep meat, dairy, wheat, wool and horticulture is estimated to cost a further $400 million to $700 million each year.

These losses create a significant challenge for Australian agriculture. They also reduce returns for producers and businesses throughout the supply chain. As a result, food fraud can weaken Australia’s reputation as a trusted producer of high-quality food and fibre products.

To better understand the issue, AgriFutures Australia commissioned research into the scale of food fraud and product fraud affecting Australia’s rural industries. The research also explores opportunities to better prevent, detect and respond to fraudulent activity.

The Deakin University report, Product Fraud: Impacts on Australian agriculture, fisheries and forestry industries, found that six common practices drive many losses: adulteration, concealment, counterfeiting, dilution, mislabelling and substitution.

Understanding the supply chain

Put simply, product fraud occurs when businesses mislead consumers about a product’s origin, quality, composition or authenticity. In many cases, shortages or supply constraints create opportunities for these practices. Consequently, fraud can occur at multiple points along the supply chain.

AgriFutures Australia Manager, Rural Futures, Georgie Townsend, said producers and supply chain businesses often carry the greatest burden.

“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,” Ms 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.”

Similarly, Professor Rebecca Lester, Director of Deakin University’s Centre for Regional and Rural Futures, said product fraud is becoming increasingly common and is damaging Australia’s reputation for producing high-quality goods.

“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,” Prof. Lester said.

Protecting Australia’s food and fibre reputation

Technology is playing an increasingly important role in food authentication and product verification. For example, advances in DNA sequencing and authenticity testing can help industries detect food fraud more quickly and accurately. In turn, these technologies can strengthen product integrity and support more resilient supply chains.

“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.”

Read the full report

 

This research was commissioned by AgriFutures Australia through its National Rural Issues Program. The program supports research into emerging challenges and opportunities affecting multiple rural industries. Furthermore, it helps inform industry, government and policy discussions on issues of national significance.