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Counter Fraud Good Practice for Food and Drink Businesses

Launched: Counter Fraud Good Practice Guide for Food and Drink Businesses


Download the Counter Fraud Good Practice Guide now


The Chartered Institute of Environmental Health (CIEH) launches the Counter Fraud Good Practice Guide for Food and Drink Businesses, which helps food and drink businesses adopt established counter fraud good practice.

The good practice guidance was developed by CIEH Food in collaboration with the University of Portsmouth’s Centre for Counter Fraud Studies, the Food Standards Agency’s National Food Crime Unit, Food Standards Scotland’s Food Crime and Incidents Unit, and the Intellectual Property Office.

What’s the problem and why improve? 

Fraud is an issue for every business in every sector as it leads to financial costs, undermines consumer confidence and can potentially impact consumers’ health and wellbeing. For the food and drink industry in particular, fraud can take the form of a contaminated substance being added to a product, food products could be falsely advertised or fictitious companies can be created to receive goods on credit before disappearing without paying invoices.

Co-author of the report, CIEH’s Eoghan Daly, said that despite extensive work being undertaken by food and drink businesses, there is no reliable information about the nature and extent of fraud affecting the sector.

“This is a serious problem as fraud not only has the potential to impact on an individual business’ profits and reputation but it also reflects on the food industry as a whole and more importantly risks consumers’ trust and health,” said Eoghan Daly.

“Food businesses need to quickly change their approach and adopt good practice in counter fraud as a key element of day to day business, before profits are hit and they lose customers.”  

The guide explains that fraud is an issue for every business in every sector as it leads to financial costs, undermines consumer confidence and potentially impacts on consumers’ health and well-being.

In the food and drink industry, fraud can take many forms, such as the inclusion of contaminated substances in products, misleading claims being made in terms of quality or quantity or even the creation of fictitious companies to receive goods on credit, who then disappear without paying bills.

The guide says that despite extensive work undertaken by food and drink businesses to address fraud, there is no evidence that they are measuring the financial costs of fraud to their organisations. Without this information the report warns the industry will find it difficult to determine whether fraud is increasing or decreasing and whether or not their actions are effective.

To better protect themselves, CIEH is urging the industry to adopt proactive and comprehensive counter fraud strategies based on reliable evidence of the nature and scale of all fraud risks facing the organisation. This approach would mean the industry would have to think wider than just focusing on known fraud issues related to products or ingredients.

These strategies should be incorporated as essential processes, alongside payroll and HR, and could include:

• Calculating the financial cost of fraud based on reliable estimates, including detected and undetected instances
• Ensuring counter fraud tactics are centrally managed, with sufficient authority to secure necessary changes
• Conduct proactive and regular counter fraud exercises early rather than waiting for problems to be reported
• Develop an anti-fraud culture, which ensures robust, deterrent,  action is taken  when issues are identified
• Making use of the skills and experience of accredited counter fraud professionals and engaging with Government organisations, such as the Food Standard Agency’s National Food Crime Unit, to ensure the overall fight against fraud is strengthened

Fellow co-author Jim Gee, Visiting Professor and Chair of the Centre for Counter Fraud Studies at the University of Portsmouth said: “Fraud undermines the financial health and reputation of food and drink businesses. It is the last, great unreduced business cost with the latest research data, across 17 years, showing that this cost averages over 5% of expenditure."

“The better news is that there are examples where businesses have cut this cost by up to 40% within 12 months, significantly improving profitability. This guide shows how that can be achieved.” 


Download the Counter Fraud Good Practice Guide now