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

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Globally, food fraud is a significant challenge and is on the rise. A new report released by AgriFutures Australia estimates that the annual cost to Australian producers alone from product fraud is between $2-3 billion. A coordinated supply chain approach is needed to mitigate the problem and better protect Australia’s reputation in domestic and global markets.

Australia’s food and fibre products are highly vulnerable to food fraud. In particular, beef and veal, wine, fish and molluscs are identified as high risk, with an estimated combined economic cost of between $700 million and $1.3 billion a year. The economic cost of fraud in the sheep meat, dairy products, wheat, wool and horticulture sectors is estimated to cost the sector another $400 million to $700 million annually.

Combined, 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. Fraudulent practices are undoubtedly putting a dent in Australia’s global reputation as a food producing powerhouse.

The new insights are part of research 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 Deakin University report, titled 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.

Put simply, product 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.

AgriFutures Australia Manager, Rural Futures, Georgie Townsend, pointed out that 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,” 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.”

The Director of Deakin University’s Centre for Regional and Rural Futures, Professor Rebecca Lester, agreed that product fraud is on the rise and is already causing significant harm to 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.

“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.”

To read the full report, visit https://agrifutures.com.au/product/product-fraud-impacts-on-australian-agriculture-fisheries-and-forestry-industry/

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