Health and Wellness Fraud Can Only Get Worse

Food fraud has been committed since the dawn of time. A recent draft report issued by the European Union highlights that health and wellness-positioned products are at the top of the list in terms of mislabelling and adulteration. Unfortunately, the challenging economic climate only encourages this kind of activity, and as government watchdogs’ resources are already overstretched and primarily concerned with food safety, the main burden when it comes to curbing fraud will continue to fall on the industry.

Fraud Hard to Track

In mid-October 2013, the European Union issued a draft report, citing the 10 types of food and beverage products most susceptible to fraud. (The final, official version of the report is expected to be published sometime in November.)

Olive oil, fish and organic foods occupy the top three slots. Cheating is very difficult to detect, particularly, as the report points out, in products that contain powders, pastes and liquids. Fruit juices, for instance, may be labelled “not from concentrate” when, in fact, they are reconstituted, or they may lack a specific “superfruit” component, such as the relatively expensive acai berries. Fruit juices occupy 10th place in the report.

The Usual Suspects – Organics and Olive Oil

Products labelled as organic have always been regarded with some degree of suspicion by consumers. If the product in question is only lightly processed and comes from a small, local producer, then consumer confidence in the product is likely to be high. For example, consumers tend to have more trust in a family butcher’s offering of organic beef supplied by a local farmer than in a processed packaged product sold in a standard supermarket.

The more complex the product and the more ingredients it contains, the more questionable its supposedly pure-bred organic provenance becomes. Organic products and ingredients sourced from China are regarded by many as particularly suspect.

Olive oil has a long history of organised fraud involving aspects such as provenance (eg olive oil sourced from a variety of countries being sold as “Italian”), heat-treated olive oil labelled as “extra virgin”, or being mixed with other types of oils altogether. Owing to the complex and opaque workings of the global olive oil supply chain, most leading global brands, such as Bertolli (GBO Unilever) and Filippo Berio (SALOV), have all been implicated (mostly as victims) in fraud at some point over the years.

Due to the popularisation of the Mediterranean diet, demand for olive oil remains enthusiastic. Premium products are much sought after, and our data show that global naturally healthy (NH) olive oil value sales rose by one quarter over the 2008-2013 review period, and those of organic olive oil by 45%.

Manuka Honey a Top Target

Honey (together with maple syrup) featured in sixth place on the EU’s list of foods most likely to be fake or adulterated. Premium health and wellness- positioned honeys are a particularly lucrative target for fraudsters, and manuka honey is a prime example.

The manuka shrub (leptospermum scoparium) is native to New Zealand and also Australia, where it is more commonly referred to as “tea tree”. The plant has scientifically attested antibacterial and antifungal properties, and the honey derived from its blossoms is highly valued for its medicinal properties.

Manuka honey’s antimicrobial activity is significantly more potent than that of other honeys, which owe their mild antimicrobial action to the presence of naturally occurring hydrogen peroxide. Precisely which phytochemical substances are responsible for manuka honey’s augmented pathogen-fighting prowess has not yet been established. However, its potency can be measured and quantified, and is officially referred to as the Unique Manuka Factor or UMF.

Needless to say, the coveted UMF label confers a significant price premium. Comvita Manuka Honey (from Comvita New Zealand Ltd) is Australasia’s ninth ranking naturally healthy (NH) honey brand with a value share of just over 1%. In our last price checks, the supermarket price for 500g of Comvita Manuka UMF5+ was around NZ$25, compared to NZ$5 for the same quantity of Pam’s Creamed Clover (from Foodstuffs (NZ) Ltd).

So, it is hardly surprising that profit-motivated cheats are rustling in on the exclusive manuka honey bubble. In August, 2013, the UK Food Standards Agency issued an alert to retailers and traders, warning them about the considerable quantities of fake manuka in circulation. Earlier tests conducted by the Food Environment Research Agency (Fera) found that 56% of the samples tested were fraudulent.

The Unique Manuka Factor Honey Association (UMFHA), which represents producers in New Zealand, and which commissioned Fera throughout 2012 and 2013 to carry out the tests, has been aware for some time that there is a problem.

According to UMFHA data, production of manuka honey in New Zealand amounts to around 1,700 tonnes per annum, but more than that – 1,800 tonnes of “manuka honey” – is sold in the UK alone. Globally, the figure is around 10,000 tonnes.

Industry Bears the Brunt

In the end, it all boils down to this. Where there is added value, there is added incentive to engage in fraudulent activity, and this puts health and wellness products at the top of the list. Considering the aforementioned production versus sales figures pertaining to manuka honey, how are consumers to trust that what they are buying is the genuine article? It is a truly lamentable state of affairs, and, sadly, as with all kinds of fraud, the fraudsters tend to be at least one step ahead of the game.

The economic crisis complicates things even further. Cash-strapped consumers will be increasingly tempted to purchase products with too-good-to-be-true price points, or, at the other extreme, they may start to eschew all “non-essential” premium offerings just to make ends meet.

For national and supranational bodies engaged in fraud detection and prevention, decreasing tax revenues mean that even fewer resources will be available to combat any kind of food fraud which does not pose a direct threat to public health. Unfortunately, this means that the authenticity of health and wellness products will potentially be compromised more than ever in the foreseeable future.

Most of the effort and cost involved in fighting fraudsters will fall onto the industry’s doorstep. Individual manufacturers are virtually powerless in the face of the onslaught, and so the credibility of health and wellness products will largely depend on the strength and unity of well-coordinated industry bodies, which will have to actively engage in combating fraud by employing the most cost-effective measures. And this will be quite a challenge.