New counter fraud guidance issued for food and drink businesses

The Chartered Institute of Environmental Health (CIEH) has published a counter fraud good practice guide for food and drink businesses.

The horsemeat scandal in 2013 shone the spotlight on food fraud and the onus ever since has been on Regulators and the industry to do more to combat it and to restore consumer confidence in food integrity and supply chains. The CIEH has consequently developed the good practice guide for food and drink businesses in collaboration with other key parties, including the Food Standards Agency’s National Food Crime Unit. The guide considers general principles of counter fraud good practice from other industries, which it then applies to the different types of fraud that typically affect food businesses (including examples such as payroll fraud, European distribution fraud and long-and-short firm fraud). It also sets out different case studies at Annex 1 to demonstrate how fraud can appear within the food and drink sector and how those businesses addressed the issue.

The guide highlights that while food fraud poses a risk to public health and confidence, it also carries a financial cost by increasing prices, as well as reducing businesses’ profitability and brand integrity. Treating food fraud as any other business risk can therefore turn it from a threat to something that can reduce costs, improve profitability and enhance competitive advantage.

The guide sets out 7 steps based on established good practice to counter fraud. These are:

1. establishing the nature and scale of the problem
2. developing a strategy to tackle it
3. establishing an implementation structure
4. designing and implementing fraud prevention measures
5. designing and implementing fraud detection measures
6. designing and implementing investigative processes
7. monitoring outcomes.

While compliance with the guide and the steps set out above are (currently) not mandatory, businesses should take the time now to review them and overhaul their processes as necessary to counter fraud. Otherwise, failing to put an effective counter fraud strategy in place could leave a business exposed to financial and reputational damage and will also make it difficult to defend from a position of ignorance in the event that fraud is uncovered.

The Institute of Food Safety, Integrity & Protection is planning to launch a pilot into the guide’s approach in 2017. Any food and drink businesses interested in participating should contact Eoghan Daly for more information.