By Nakul Pasricha*
Food and beverage industry’s struggle with adulteration and counterfeiting
Adulteration in the food industry is a colossal menace globally. It has caught the attention of authorities across the globe and demanded strict action. Regulatory bodies, enforcement agencies, and private sector partners from approximately 78 countries took part in the recent OPSON VIII operation, under which more than 67,000 checks were carried out at shops, markets, airports, seaports, and industrial estates. Around 16,000 tonnes and 33 million litres of likely fake food and drink were seized, and approximately 672 individuals arrested during the operation. The latest Operation OPSON, coordinated by Europol’s Intellectual Property Crime Coordinated Coalition and INTERPOL, resulted in the seizure of more than €100 million worth of potentially dangerous food and drinks.
According to the Grocery Manu-facturers Association (GMA) in the United States, it is estimated that counterfeiting of global food and consumer products may cost the industry $10-15 billion per year.
Unfortunately, the situation is no different in India. Recent news reported in the media shows an alarming state of affairs. Very recently, Delhi Police busted a gang operating for the past seven years who were involved in the manufacturing of fake cumin. More than 450 bags each containing 20 Kg of fake cumin were seized by the police. This fake cumin was made of stone dust, semolina, and a grass paste. Consumption of this could cause serious health hazards. This is just one of the many instances across the country but reflects on is the gravity of the situation.
Harcourt Butler Technical University conducted a study in Kanpur city in Uttar Pradesh, which is a big market for edible oil and also supplies to other states. The report found that 70 percent of the mustard oil available in the market is adulterated. According to our (Authentication Solution Providers’ Association) report findings, counterfeiting incidents in the country rose by 15% in the year 2019 as compared to 2018 (for the period January – October). The food and beverage industry is amongst the top five sectors in terms of reports of counterfeit incidents.
In another category, FSSAI banned more than 170 brands of coconut Oil in Kerala in 2018, after they were found to be adulterated. Adulteration of food products not only decreases the quality of food products but can also lead to a number of ill effects on health.
Consumer protection laws exist in the country; the regulatory system needs to evolve and become inclusive of essential measures such as an integrated regulatory framework for product recalls. This has become an active practice in other countries and proved its effectiveness. In recent times, product safety movement has gained momentum through regulators such as the FSSAI and Central Drugs Standard Control Organisation (CDSCO) supported by prioritization by policymakers and increased consumer awareness. The new Consumer Protection Bill 2019 is a significant step forward in consumer empowerment as it includes the Product liability clause. This clause empowers consumers by way of provision where consumers can claim compensation from product manufacturers on account of any injury or damage caused by defective goods or deficient services. The defect in this regard has been defined as manufacturing, design, or deviation from manufacturing specifications.
Active participation of consumers is key
While the strengthening of the regulatory framework is essential, the ecosystem also needs to mature with the active involvement of consumers. The menace of counterfeiting has seeped into the ecosystem so much that we cannot turn a blind eye towards it any longer. The regulatory framework cannot alone contain these malpractices, all stakeholders need to contribute and the most important part of this campaign against counterfeit, illicit and substandard products is building consumer awareness. All stakeholders are required to work together in increasing consumer engagement in verifying product authenticity. The majority of consumers are not aware of their rights; they are not aware of the benefits of taking a bill while purchasing because this can help them make their case if any harm comes to them due to the quality of the product. Most consumers still do not check the necessary details of products such as expiry date, manufacturing date, packaging, authentication features, etc.
Even if awareness rises, more power needs to be put in the consumer’s hands. Consumers can be assured of the quality of products with the marking of FSSAI/ISI/AGMARK. But with the advancement of technology, it has become easier for notorious elements to replicate these marks, packaging and labels. It is also the case in most products that are outside the certification scheme of BIS. It leads to the consumers getting fooled and cheated as they are unable to differentiate between a genuine and a fake product. By building a robust phygital authentication infrastructure, it can be made easier to identify counterfeit products. Adoption of updated authentication solutions enabled with technology and widespread awareness around these features can help in weeding out counterfeits from the market.
Regulations are a boon for brands
Ill effects of counterfeiting on consumers take centre stage, but it has serious damage to brand equity as well. Brands put in a lot of effort to perfect a quality product for consumers and built brand equity by maintaining high quality throughout the market. New regulations guiding brands to implement security and authentication solutions present an opportunity for brand owners to re-evaluate their Brand Protection, Anti-Counterfeiting, and Supply chain strategies. Considering the increased instances in counterfeiting activities, ensuring that consumers receive authentic products and are aware of how to judge the authenticity of the product can help in building brand equity and credibility. It is a small investment towards a long term benefit. The industry and policymakers in the food industry can benefit by referring to tested solutions already adopted and implemented by another industry sector, such as Beverages, Liquor, and Pharmaceutical industry.
When it comes to counterfeiting, there are two significant challenges that brands face – detecting counterfeits in the system and stopping diversion. It is critical to ensure the product is not replicated and has not been removed from the supply chain, tampered with, and then re-entered into the system at a different location – local or global. Anti-counterfeiting solutions can protect manufacturers and end-users from counterfeit or tampered products.
Manufacturers must adopt anti-counterfeiting solutions to protect their products and ensure the safety of consumers by creating awareness around measures they are taking.
Secure packaging helps in ensuring that the product is genuine and has not tampered with; this might also discourage counterfeiters from replicating the product. To prevent tampering and adulteration, food manufacturers can apply deterrents to each of these items of packaging. Physical solutions like a tamper-evident hologram, holographic shrink sleeves, hidden text printed using security or magnetic ink solutions aid in establishing authentication and can act as first deterrents to the counterfeiters. Hidden and covert features help a trained person in distinguishing a fake product from a genuine one.
Integrating the use of digital technologies over and above physical solutions takes the anti-counterfeiting features to the next level by addressing and curbing supply chain issues. For instance, a unique serial number (URN) is a randomized number printed onto the product’s packaging. As it is unique, it can be used to define precisely who manufactured the item, track the journey of the product through the supply chain and the country or state of its origin. This type of serialization at the item level is vital in fighting against counterfeiting. Labelling is the first step in traceability.
By using barcode/QR code labelling/RFID, manufacturers can track products at every point of transition from the warehouse to the point of sale, as each pallet is scanned and placed onto a truck for delivery. Scanning/detection at each point in the supply chain enables manufacturers to record every movement of each product through the system. Combined with the information gathered by the WES (Warehouse Execution System), manufacturers can trace precisely:
- What time the product went into or out of specific controlled environments;
- What time and for how much time the product was out of the controlled environment;
- What time the product loaded onto the vehicle for delivery;
- For how much time the product was on the vehicle and at what temperature it was stored;
- What time the product reached its destination;
- How long the product sat in a location; and
- What time the product was put back into a controlled environment at the delivery location.
Tracking products during the delivery phase is essential not only to ensure the products are on time but tracing these additional variables to help eliminate potential product damage or food spoilage in transit-preventing recalls and lost revenue.
Blockchain – Global example
Cargill (one of the largest food manufacturers) set a great example by debuted a blockchain pilot program that allowed consumers to track where their turkey originated. This program, in select markets, allowed consumers to enter an on-package code at the website HoneysuckleWhite.com to access the farms’ location – state and county. They were even able to view the family farm story, see photos from the farm, and also read a message from the farmer. This example shows how blockchain can work to keep secure records of a product’s complete provenance, create transparency, and build consumer confidence.
Cargill is also making progress by increasing traceability across their global palm oil supply chain. In India, traceability to the mill level has grown significantly in the last four years – from 0% in 2014 to 90% by the end of 2018.
The tea industry has also been struggling in this respect, so the Tea Board India is also considering the use of blockchain to implement complete traceability of tea right from the plantation stage till the time it is sold to the buyer.
Authenticity and Supply chain traceability will be amongst the top food industry trends in the coming years. It doesn’t mean that every food company will hurry to implement traceability; this period is still for early birds. But the demand for radical transparency is growing. Consumers have the right to be delivered the quality of the product they were assured of and paid for. Thus consumers and retailers should demand that the products they purchase and sell are what they purport to be. Consumers — especially Millennials and those even younger — are acknowledging sustainability and ethical production, but at the same time, don’t trust brands. End-to-end traceability information can provide trusted proofs about the processes of their favourite brands. For the betterment of general human wellbeing, the loopholes in the system must be plugged in and the ecosystem is made less vulnerable to counterfeiting.
2019, June 21: Over € 100 million worth of fake food and drink seized in the latest Europol Interpol operation. Retrieved from: Europol
2019, November 20: Cops bust fake cumin manufacturing gang. Retrieved from Times of India https://timesofindia.indiatimes.com/videos/city/delhi/cops-bust-fake-cumin-manufacturing-gang-main-accused-arrested/videoshow/72145357.cms
2019, November 7: Counterfeit cases up by 15 percent in 2019: ASPA. Retrieved from Hindu Business Line https://www.thehindubusinessline.com/news/counterfeit-cases-up-by-15-per-cent-in-2019-aspa/article29909080.ece
Cargill’s 2018 Palm Oil Report and 2019/2020 Action Plan. Retrieved from Cargill website https://www.cargill.com/doc/1432144706116/cargill-2018-palm-report.pdf
2019, October 30: Tea Board of India considers using blockchain for end-to-end traceability. Retrieved from token post-https://tokenpost.com/Tea-Board-of-India-considers-using-blockchain-for-end-to-end-traceability-3957
* Author is is the President of the Authentication Solution Providers’ Association.