Food fraud is probably costing your company more than you think

Monday, 08 May, 2017

“Fraud is the last great unmanaged business cost, and reducing it offers forward-thinking businesses the opportunity to improve competitiveness and increase profitability,” Crowe Clark Whitehill Head of Forensics and Counter-Fraud Jim Gee said.

A research report from UK audit, tax and advisory firm Crowe Clark Whitehill and the University of Portsmouth’s Centre for Counter Fraud Studies (CCFS) titled ‘Minimising Fraud and Maximising Value in the UK Food and Drink Sector 2017’ calculates the cost of fraud affecting the food and beverage sector in the UK.

According to Gee, “Our latest report shows that the sector could increase profitability by 43%, unlocking an additional £4.8 billion. Our experience is that the cost of fraud can be reduced by up to 40% within 12 months. Some of the FTSE-listed food and drink businesses could double their profits by reducing their fraud losses.”

The following table below shows how food and drink fraud is affecting different products. The impact of fraud can be seen by applying the estimated £11.97 billion cost of food and drink fraud to the price of a basic shopping list:

Product	Price £	Fraud cost £
Loaf of fresh white bread [750 g]	1.00	0.06
Rice (white) [10 kg]	15.00	0.88
Eggs [6]	1.25	0.07
Cheddar cheese [350 g]	2.50	0.15
Butter [250 g]	1.90	0.11
Chicken breasts (boneless, skinless) [300 g]	2.50	0.15
Apples [670 g]	2.50	0.15
Oranges [200 g]	1.50	0.09
Tomatoes [200 g]	1.50	0.09
Potatoes [1 kg]	1.00	0.06
Lettuce [2 heads]	1.20	0.07
Bottle of wine	5.00	0.29
Beer [500 mL]	1.79	0.10
Coca-Cola [1.75 L]	1.66	0.10
Semi-skimmed milk [2 pints]	0.75	0.04
Baked beans [4 x 315 g]	2.69	0.16
Spaghetti [500 g]	1.28	0.07
Back bacon [300 g]	1.35	0.08