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Brexit squeeze on manufacturer margins could increase food fraud

A combination of price pressures brought about by Brexit could push manufacturers to commit food crime, according to an experienced fraud investigator.



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#Brexit squeeze on manufacturer margins could increase food fraud

Peter Whelan, director of audit and compliance at the Food Standards Agency Ireland, made the remarks at the Food Brexit conference in London this week.

 

He suggested currency fluctuations, increased costs and delays created by border controls would mean companies cut corners to maintain their margins.

 

“It has been estimated there will be up to a 22 per cent increase in food prices”, Mr Whelan said.

 

“Would this encourage some manufacturers and processors to cut corners? It may do, and if it does, it could be fraudulent events or bad practice – they could substitute product or they could adulterate product.

 

Sub-standard

 

“If I have increased labour costs or import costs, I could look for ingredients which are sub-standard. Or I could turn off the cold room for a few hours to save money.”

 

Mr Whelan also raised concerns about trade deals with countries which have different food standards, such as the US, where milk contains bovine somatotrophin – a product injected into cattle to increase milk production.

 

“What happens when we take our milk from the US and incorporate it into a complex product?”, he said.

 

“Do we label it or do we just put down milk? There is an opportunity for fraud and deception of the consumer.”

 

Delays

 

New delays caused by border controls were another possible incentive for companies to commit food fraud, according to Mr Whelan.

 

“If a manufacturer or processor cannot afford to wait two days at Dover because their product has a three or four-day shelf life, maybe they will give it a five or a six-day life.

 

“There is a lot of scientific work which goes into determining a shelf life, but there are some people who will take an opportunity for fraud.

 

“Or they could fill up their trucks, the first third with food and the other two-thirds with building material, so they can say it is a load of building materials and does not have to be recorded on the manifest.

 

“These things could happen. I am not saying they will, but there is potential.”


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