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.
