Jump to content

  • Quick Navigation
Photo
- - - - -

Food fraud or not? Dilemma


  • You cannot start a new topic
  • Please log in to reply
13 replies to this topic

#1 AoS

AoS

    Grade - Active

  • IFSQN Active
  • 4 posts
  • 0 thanks
0
Neutral

  • Earth
    Earth

Posted 18 January 2019 - 08:45 AM

Hello all,

 

I am in a dilemma and I hope someone here can give me a nudge in the right direction.

 

We have received a product from our regular supplier. On arrival we noticed that the product was not packed in the regular bags bit in the bag of a competitor of ours.

At first we thought, not a real problem, we repack the product and send a credit nota to our supplier but then we were inspecting the bag.

 

  • The bag has an IFS Food logo on it, but our supplier is only BRC certified and not IFS certified, our competitor is (and IFS trade), but this is clearly a trade product for our competitor. Can you use the IFS logo on products that are not packed/cleaned/made by an IFS company?
  • The supplier is a Chinese producer and all products packed by a Chinese company must have a sanitary code printed on the bag to trace the factory, this is not present.

 

We suspect that our competitor sell these products as recleaned in the EU at an IFS certified company.

 

The problem is, the supplier is a very good supplier of our for a product that has a lot of problems and the competitor on a good relation with the directors and we do not want to destroy his business.

On the other side if this is true and he is committing fraud, this hurts our business as well because he has taken some of our old customers.

 

What would you do?

 



#2 Iwonaa

Iwonaa

    Grade - AIFSQN

  • IFSQN Associate
  • 25 posts
  • 2 thanks
0
Neutral

  • Poland
    Poland

Posted 18 January 2019 - 09:04 AM

I don't know if I understand well but maybe your supplier buys product from your competitor and then repacking for you? And on that delivery some of the step had been missed and the goods were not repacked in a proper way?

Wysłane z mojego WAS-LX1 przy użyciu Tapatalka



#3 Ivan Ivanov

Ivan Ivanov

    Grade - Active

  • IFSQN Active
  • 24 posts
  • 4 thanks
3
Neutral

  • Bulgaria
    Bulgaria

Posted 18 January 2019 - 09:20 AM

Hi,

 

One type of food fraud is wrong labeling or misslabeling. I think in your case is that.

I dont understand well - this you supplier is supplier of outsourced process or supplier of raw matterias. Because you say that your competitors directly sell this products.

If this is happened i think its not easy to say that this supplier is very good :) 

Here you can find the terms and conditions for using the IFS logo: https://www.ifs-cert...745-logo-agb-en

It is forbiden to be put on the lables or packaging of the product because this is not product certification. IFS have strong rues about the using of their logo and many restrictions.

My opinion in this case is that this is food fraud adn you should follow your procedure. Please remember that now you should make new assessment for food fraud for this supplier and for this product (if you recieve the same product and from other suppliers).

Did you check some food safety and quality parameters of the delivered product. Because in this case the problem can be more big than only lables and packaging. You should make demanded investigation. 

The decision is your.

I hope that i was helpful. :)

 

Best regards,

Ivan 



#4 pHruit

pHruit

    Grade - FIFSQN

  • IFSQN Fellow
  • 1,397 posts
  • 593 thanks
300
Excellent

  • United Kingdom
    United Kingdom
  • Gender:Male
  • Interests:Composing/listening to classical music, electronics, mountain biking, science, sarcasm

Posted 18 January 2019 - 09:35 AM

The key question is perhaps: Has the supplier misrepresented the product with respect to the agreed specification and/or contract of supply?

If you buy a fairly generic product against a spec that doesn't specify the manufacturer/packer, and don't have any other formal agreement in place as to the exact source and route of supply, then there may be nothing fraudulent about what you describe.

There is a long history of distributors and traders around Europe repacking/relabeling products to hide the true origin, and the roots of this aren't necessarily nefarious - the view was that if the customer knew where the product actually came from then they may just go direct to the actual source, so much of it was done under the auspice of protecting commercial interests. Thankfully this type of approach is on the decline due to greater scrutiny of overall supply chains, increased requirements for transparency etc, but it is still quite widespread.

Many parts of the industry are also quite closely interconnected, particularly amongst smaller businesses, so companies that are theoretically competitors often help each other out - the directors/owners will all know each other from time in the industry, meeting at the same conventions and industry associations etc. So in this case my initial assumption would be that your supplier had a problem with availability and bought from your competitor (or possibly bought back some of his own product that had been repacked) to cover short-term stock problems. Again this is/was typical of smaller traders and distributors, where there is/was little recognition about the need for full assessment and approval of the supplier etc.

 

As for the IFS logo, this could indeed be misrepresentation and IFS would have rightly have significant problems with this. But equally the material could genuinely have been repacked at a site certified under IFS and within the scope of that certification, and thus would be used entirely legitimately. Final packing in Europe would also negate the requirement for the Chinese sanitary code, as it would have been packed outside the jurisdiction of the Chinese authorities.

 

To me, it sounds like you need to find out more about the real history of what's been supplied, and probably assess the "actual" supplier (last point of processing) to understand what it really is and whether it's suitable. You may also need to share some of this information with your customer, so that they can make an informed decision as to whether it is or isn't equivalent to their normal product.

At the same time, you almost certainly need to have a discussion with your supplier about what is and isn't acceptable to you, and also ensure that your specifications and contracts are clear on your requirements and expectations such that suppliers can't unilaterally change ingredients / supply routes without advising you in advance and obtaining your consent to do so.



#5 AoS

AoS

    Grade - Active

  • IFSQN Active
  • 4 posts
  • 0 thanks
0
Neutral

  • Earth
    Earth

Posted 18 January 2019 - 10:00 AM

Thank you all for the reply!

 

Sorry if I am being a bit unclear but I cant give full details on an open forum because of ethical and business resons.

 

@Iwona

We know for certain the the product was packed by our supplier because if not a container was send from our supplier in China, to our compatitor in Germany, recleaned there, send back to China and then back to us. this is not possible. We also already knew that our supplier, supplies us as our compatitor.

 

@Ivan Ivanov

Our supplier is a raw material supplier and we and our compatitor reclean and repack the product when nessesary/demanded by custormers, but we also can trade the raw material of our supplier without recleaning. This all depends on the customers desires.

 

Thank you for the link to the IFS site for the rules on using the logo! This makes it clear that this is not allowed.

 

Reasassing our Food fraud plan is already on the agenda because of this.

The quality is luckely as good as ever from the supplier we already checked.

 

@pHruit

See my reply to Iwona regarding why we know for certain that the product is produced by our supplier and not our competitor.

For our customers there is no problem because we will just reclean and repack the product so they will still receive the same quality as they are used to.



#6 Scampi

Scampi

    Fellow

  • IFSQN Fellow
  • 2,832 posts
  • 779 thanks
344
Excellent

  • Canada
    Canada
  • Gender:Not Telling

Posted 18 January 2019 - 01:29 PM

On the surface this appears to be an ethical dilemma and not necessarily a food fraud issue.  

 

From SQF

The methods, responsibility and criteria for identifying the site's vulnerability to food fraud shall be
documented, implemented and maintained. The food fraud vulnerability assessment shall include the site's
susceptibility to product substitution, mislabeling, dilution, counterfeiting or stolen goods which may adversely
impact food safety.
 
Given that you are certain the none of the underlined issues have occurred.  I would agree with previous post, unless your contract specifically says they cannot substitute another vendor to source your ingredients, this is not fraud.
 
While the use of the IFS logo may not be permitted, again, this is an ethical dilemma and up to your company about whether, or how, to proceed
 
Again---this is all dependent on your statement that the goods in question were identical to what you usually receive.

Because we always have is never an appropriate response!


#7 Ivan Ivanov

Ivan Ivanov

    Grade - Active

  • IFSQN Active
  • 24 posts
  • 4 thanks
3
Neutral

  • Bulgaria
    Bulgaria

Posted 18 January 2019 - 02:16 PM

 

On the surface this appears to be an ethical dilemma and not necessarily a food fraud issue.  

 

From SQF

The methods, responsibility and criteria for identifying the site's vulnerability to food fraud shall be
documented, implemented and maintained. The food fraud vulnerability assessment shall include the site's
susceptibility to product substitution, mislabeling, dilution, counterfeiting or stolen goods which may adversely
impact food safety.
 
Given that you are certain the none of the underlined issues have occurred.  I would agree with previous post, unless your contract specifically says they cannot substitute another vendor to source your ingredients, this is not fraud.
 
While the use of the IFS logo may not be permitted, again, this is an ethical dilemma and up to your company about whether, or how, to proceed
 
Again---this is all dependent on your statement that the goods in question were identical to what you usually receive.

 

 

The definition of IFS for food fraud is 

"The deliberate and intentional substitution, mislabelling,

adulteration or counterfeiting of food, raw materials,
ingredients or packaging placed upon the market for
economic gain. This definition also applies to outsourced
processes."
I am not agree with you that this is not food fraud. Really this is very clear example of frauding. Especialy copeare with the rules of IFS for using the logo. 
Other thing is what the company will decide to do. If they want to follow strict the rules - they should follow their procedure from their mitigation plan which is developed based on the vulnerability assessment. 
That the food safety and quality parametters are ok its doesnt mean that is not food fraud. And how and you are writte one of the fruding is mislabeling. Puting the logo of IFS on the packaging and missing th
 
Best regards,
Ivan  


#8 Scampi

Scampi

    Fellow

  • IFSQN Fellow
  • 2,832 posts
  • 779 thanks
344
Excellent

  • Canada
    Canada
  • Gender:Not Telling

Posted 18 January 2019 - 02:31 PM

I'm still trying to understand how:

 

Where is the economic gain to this particular transaction--------one can assume the receiver paid the same price

It wasn't mis labelled

it wasn't adulterated

it wasn't counterfeit

it wasn't substituted

 

The rules of the IFS logo use are clear?  We cannot not know for sure without asking the company who put said logo there.....did IFS grant an exemption?  They are within their rights to do so

 

Other than the IFS logo.............where exactly is the fraud?????


Because we always have is never an appropriate response!


#9 Ivan Ivanov

Ivan Ivanov

    Grade - Active

  • IFSQN Active
  • 24 posts
  • 4 thanks
3
Neutral

  • Bulgaria
    Bulgaria

Posted 18 January 2019 - 02:45 PM

I'm still trying to understand how:

 

Where is the economic gain to this particular transaction--------one can assume the receiver paid the same price

It wasn't mis labelled

it wasn't adulterated

it wasn't counterfeit

it wasn't substituted

 

The rules of the IFS logo use are clear?  We cannot not know for sure without asking the company who put said logo there.....did IFS grant an exemption?  They are within their rights to do so

 

Other than the IFS logo.............where exactly is the fraud?????

 

They havent rights to put IFS logo on the packaging - they do it. This is undartand as an way to cheat that the product is certified. IFS is not product certification! And if you are certified against IFS you should check your suppliers did they follow the requirements. The certifications is used as an insurance and many companies require from their suppliers to be certified against some standards to be sure that the products which they recieve are under control. If this company dont follow the rules for using the logo, dont follow authority regulations to put the authority number... how you can be sure that they follow other rules?

Many times puting the some standard logo on the packaging or on the lable is used from financial gains. 

They have 2 problems with wrong labeling - IFS logo and missing the sanitry code. What is this in your point of view? And what is the reason to do it?



#10 Scampi

Scampi

    Fellow

  • IFSQN Fellow
  • 2,832 posts
  • 779 thanks
344
Excellent

  • Canada
    Canada
  • Gender:Not Telling

Posted 18 January 2019 - 02:50 PM

Thank you all for the reply!

 

Sorry if I am being a bit unclear but I cant give full details on an open forum because of ethical and business resons.

 

@Iwona

We know for certain the the product was packed by our supplier because if not a container was send from our supplier in China, to our compatitor in Germany, recleaned there, send back to China and then back to us. this is not possible. We also already knew that our supplier, supplies us as our compatitor.

 

@Ivan Ivanov

Our supplier is a raw material supplier and we and our compatitor reclean and repack the product when nessesary/demanded by custormers, but we also can trade the raw material of our supplier without recleaning. This all depends on the customers desires.

 

Thank you for the link to the IFS site for the rules on using the logo! This makes it clear that this is not allowed.

 

Reasassing our Food fraud plan is already on the agenda because of this.

The quality is luckely as good as ever from the supplier we already checked.

 

@pHruit

See my reply to Iwona regarding why we know for certain that the product is produced by our supplier and not our competitor.

For our customers there is no problem because we will just reclean and repack the product so they will still receive the same quality as they are used to.

See the original posters comments in red--------------they know why the sanitary code was missing

 

And as I stated, the IFS logo use here MAY be fraudulent.....but for this particular instances........no monetary gain to be had

 

Having said all of that, I would contact IFS to alert them.  Just as I am currently investigating a company labelling their products as organic when I am 90% sure they are not

 

I am not suggesting poster do nothing........but I am not convinced this is a case of fraud at the receiving end; nor am i suggesting the seller isn't aware of whats going on........but there is evidently NO RISK TO PRODUCT in this case


Because we always have is never an appropriate response!


#11 Ivan Ivanov

Ivan Ivanov

    Grade - Active

  • IFSQN Active
  • 24 posts
  • 4 thanks
3
Neutral

  • Bulgaria
    Bulgaria

Posted 18 January 2019 - 03:16 PM

I am sorry but i cant understand this with delivery what and how is happened. 

Really we havent here all info of this case. 

Realy they say that the safety and quality parameters are ok, but in food fraud this is not enough. 

Nevertheless and i dont tell them what to do. I say only my point of view.

Its good that the problem is look that is not seriouse but is a problem. 

The decision should be taken from the company because they are responsible and they have all information.



#12 FurFarmandFork

FurFarmandFork

    Food Safety Consultant, Production Supervisor

  • IFSQN Fellow
  • 1,264 posts
  • 576 thanks
170
Excellent

  • United States
    United States
  • Gender:Male
  • Location:Oregon, USA

Posted 18 January 2019 - 05:05 PM

Reporting questionable behavior for competitors is tough. In US regulators generally have no interest in hearing about other food companies practices if there is no pressing public health issue (tends to get resolved via class action as opposed to regulatory oversight for marketing claims).

 

At this time, there isn't really a risk to your business in terms of the potential fraud observed, but it may be worthwhile to drop IFS a line in case they want to look into it. It's their logo after all so if it is being used incorrectly they would be the stakeholder hurt by the fraud.

 

You can probably trust them to keep your FYI annonymous, but all of this falls into how you want to manage your supplier relationship and the risk that puts you at.


Austin Bouck
Owner/Consultant at Fur, Farm, and Fork.
Consulting for companies needing effective, lean food safety systems and solutions.

Subscribe to the blog at furfarmandfork.com for food safety research, insights, and analysis.

#13 redfox

redfox

    Grade - SIFSQN

  • IFSQN Senior
  • 481 posts
  • 155 thanks
21
Excellent

  • Philippines
    Philippines

Posted 21 January 2019 - 06:08 AM

Hello,

 

If your supplier is a trader, the only problem is who your supplier declares as the manufacturer. But if your supplier is the manufacturer and gives you product that was not manufactured is his plant, that could be mislabeling, and it ma be a fraudulent act. Because he may have supplied you sub-standard product coming from other manufacturer with much lower cost. The issue of food safety stem from the intention of economic gain. 

 

Ex:

Injecting water to octopus to increase weight. But the water injected is dirty which possess risk to food safety.

 

regards,

redfox



#14 Mathieu Colmant

Mathieu Colmant

    Grade - MIFSQN

  • IFSQN Member
  • 67 posts
  • 17 thanks
6
Neutral

  • United Kingdom
    United Kingdom
  • Gender:Male

Posted 28 January 2019 - 09:26 AM

Hello everyone,

 

I think there are different sides in this case.

From the company point of view, is that fraud? No, it isn't. It is a supplier mistake, sending products from one client to another. Probably they prepared the goods and put the wrong label on it. You asked for A, they send B, with the label of B, they are not trying to sell you another product, for economic gain or any other reason.

 

From the IFS point of view (as for all GFSI standards), this is clearly a breach of the rules. The certificate could then be removed and IFS may ask those products are repacked. So you better warn IFS, because your competitor will have problems, no products to sell for a while and you can take part of his market.

 

From the EU point of view, if it is animal origin products, they should have the sanitary mark. So the product is then illegal but if you warn the customs, your supplier may loose his licence, so it is risky for your business.

 

From the customer point of view, if your competitor labelled the products as made in EU, that is clearly a fraud. Maybe the market price will be the same, but the customer may choose to buy "EU" product than a chinese one.

 

Regards,

 

Mathieu


Mathieu Colmant

Consultant in Food Safety - Brussels & London

Director

FollowFoodLaw.eu ltd





0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

EV SSL Certificate