Report about chinese industry

INTRODUCTION

Through the body of consumers, companies and the voices of local authorities, this report will present a global view of the current food supply chain situation of the whole world. In this report,  some example of former cases will be listed in order to make the issue more accessible. 

Firstly, in the introduction the context will be presented to you in order to explain the magnitude of the situation. Secondly, in a first part the context of the fraud more specifically will be presented with some solutions to stop the fraud. Then in another big part the risks and the solutions of the risks are going to be treated. To finish, in a short conclusion, we will review quickly the whole subject. 

Food accounts for a large share of the household budget in United-Kingdom, approximately 35%. Controlling the food supply chain is therefore a major challenge. 

These days, we experience problems and different scandals concerning the industrial food production. One of the most famous ones is the horse meat scandal by Tesco. But these food scandals are not a recent phenomenon, and as we will see in this report; it affects many countries around the world. 

Context

Today, in 2020, more and more labels are labelled as “AOP”;”IGP”,”STG” and many other. Moreover, smartphone apps like Yuka, Akamai have been created in order to help consumers make their choice between different products with various criteria measuring quality. But does this suffice?

An organisation called Europol-INTERPOL was created as a means to fight the production of counterfeit goods. 

OPSON IV, operation lead by this last organisation seized an estimated EUR 230 million of counterfeit goods in 2017. The number of participating and the involvement of countries in the operation is rising, currently 61 countries members are involved. They cooperate mainly in the airports, seaports, industrial estates… 

Once again we can ask ourselves the question : is this enough? Indeed, they caught some counterfeit goods valued up to EUR 230 Million in 2017, but we know that the estimation of the counterfeit market around the world is worth than EUR 500 Billions according to “LE MONDE” newspaper. Is that sufficient to control goods at the airports, seaports… should we increase the control upstream in factories and control the activities more closely of starting business? A lot of questions that raise a deep problem. 

This association is operating for 61 countries but each of them have different problems. Let’s take some examples. 

In Germany the “OPSON IV operation is focused on undeclared peanut, cashew nut and almonds in hazelnut products imported in Germany”.

In France, “customs seized more than 179 000 seasoning illegally bearing a famous trademark”. 

In Denmark “The DVFA performed analysis of different samples of olive oil [...] numerous samples were not virgin oil as presented but blended or lampante oil”. 

These few examples considering three different countries show three different problems that Europol-INTERPOL have to solve (counterfeit goods, undeclared goods and products which are not compliant with applicable standard…). All these examples leads us to the following question : is that one institution is enough to treat a lot of different problems or should there be an institution for each of them? 

Part 1

Part 1-a :Context of the fraud ( Bastien)

On June 10, 2019, a problem arises relatively that of the horsemeat scandal.Numerous non-profit associations have been victims of large-scale food fraud. These include 4 French associations: The food bank, the red cross and restaurants in the heart and popular relief.

With the example of the french burger fraud, the fraud concerned the origin of the meat. Like in many cases, the problem concerned a supplier and the origin of the product. 

In this case, we have seen that the problem is a polish supplier. The product has a poor traceability, weak control, products do not meet standards.

The regulator defines this action as a deception by organized gang which is a criminal offense in the country but the penalties for the culprits are very low and this encourages risks.

The major problem is the likeness with a previous scandal, the horsegate. The sentence was not dissuasive enough. One of the responsible has only a sentence of 6 month in prison. 

Moreover the food fraud is a real business, estimated to €40bn annually. The company want to reduce the cost for make more benefits. So they do not respect the sanitary rules and cheated on the composition of the meat (Following the intervention of the DGCCRF which confirmed this). The actor of the health protection have to take some real measure. 

Concerning the customer of this product, it was the FEAD. These product were distribute by an association who help needed people. 

In the case of the “french burger”, the process was the same as the horsemeat scandal in 2012/2013, from the supplier Spangero Jacques poujol, the director who had been found guilty after having sold 500 tonnes of horse meat instead of beef, got away with a small penalty (24 months in prison with 18 suspended) ), they are not significant. They speak about an “organised gang”, so if only one company / one director have been sanctioned, the fraud can not be stop. 

Part 1-b : Solution to stop the fraud  (TOM)

They are some organism to reduce the food fraud, for example the NFCU (National Food Crime Unit) work for the protection of customers, they encourage people to denounce food crime.

Supply chains must be clear and goods tracked from their source. One of the solution is to visit suppliers and to have a standard of quality regularly controlled. Traceability is the key.

Governments have a role to play because one of the reasons for the problem are some trade deals are opening competition to countries with lower production costs. It’s dangerous because this encourage local manufacturers to cheat in using cheaper products to stay competitive. 

When it is a big fraud, Interpol can investigate, like in the OPSON VI operation where 61 countries take part in the operation (France, Spain, Italy, etc…). In 2017 they grabbed 9 800 tonnes, over 26.4 millions liters, and 13 million units estimated €230 million. Many people were mobilized : customs, police, national food regulatory, partners from the private sector. In my opinion this kind of things is important and necessary to do because there is an aspect of prevention, that will scare off those who wish to defraud. One of the problems is that it's expensive.