Food and wine fraud is a global issue that affects all consumers and has a large impact upon Australia’s economy. However, there is limited up-to-date data available which outlines the nature of this cost. Food Innovation Australia Ltd have commissioned Dr Ross McLeod to consolidate recent studies and conduct interviews with industry researchers to create: ‘Counting the Cost: Lost Australian Food and Wine Export Sales Due to Fraud.’ This report sheds light on the economic impact of lost Australian food and wine sales in key export markets due to fraud.

This report, shows that the overall cost of food and wine fraud for Australian exporters, such as direct product counterfeiting and substitution, was estimated at $1,689 million in 2017. Costs are estimated to be highest for the dairy, wine and meat sectors.

This cost has increased significantly in recent years due to the increasing share of Australian agricultural products destined to high food fraud-risk countries, such as Hong Kong and China. Other factors such as the more complex food supply chains and the growing economic importance of IP rights have also played a role.

This report identifies strategies for reducing fraud cost, particularly areas of R&D that can make a difference. Proposed research activities of the Fight Food Waste & Fraud CRC include biological identification techniques, track and trace, and anti-counterfeiting packaging and labelling, and have the potential to reduce the overall cost of food fraud estimated for Australian agri-food exporters.

As fraud reduction is supported strongly by the industry, the research and the research outcomes in this report are assumed to have relatively high adoption rates and a moderate probability of success. Even small reductions in fraud costs would result in positive returns on R&D given the overall cost of the problem is nearly $2 billion per year – and rapidly growing in significance.

Article from November 2017