The economics of a food fraud incident – Case studies and examples including Melamine in Wheat Gluten

• Published in: Food control 2017-01, Vol.71, p.358-364
• Main Authors: Moyer, Douglas C., DeVries, Jonathan W., Spink, John
• Format: Article
• Language: English
• Subjects: Economic impact; Economically motivated adulteration; Enterprise risk management; Food fraud; Fraud opportunity; Ingredient substitution; Risk
• ISSN: 0956-7135; 1873-7129
• DOI: 10.1016/j.foodcont.2016.07.015

Food Fraud can be an extremely profitable act even considering the capital investment of executing a complex and technologically challenging activity. This research was conducted to increase awareness of the economic motivation of Food Fraud through case studies that include commodity and finished goods pricing. The research objective was to establish a firm understanding of the economic drivers of Food Fraud. Examples provide insight on the macro- and micro-economic influences on the fraud opportunity. Specific case studies include: the Fraud Opportunity per One Shipment, Horsemeat in Beef, Selling Salmonella Contaminated Peanuts, Melamine in Wheat Gluten. An ingredient level review of a hypothetical food fraud example is also presented. Findings confirm that a single shipment of fraudulent food can result in tens of thousands of dollars in illegal profit. While the economic gain of a food fraud can be calculated based on an ingredient-level evaluation, the full economic impact of a food fraud incident is often incalculable. •A single shipment of fraudulent food can result in tens of thousands of dollars in illegal profit.•The economic gain of a food fraud can be calculated but the full economic impact is often incalculable.•Factors influencing food fraud opportunities include both macro- and micro-economic influences.•Pennies worth of an adulterant-substance ingredient can produce thousands of dollars in profits.