Food fraud is not only a dangerous concern for consumers but can also be a financial and reputational headache for food and drink producers. The Chartered Institute of Environmental Health (CIEH) has recently published the Counter Fraud Good Practice for Food and Drink Businesses that aims to educate food and drink businesses in tackling fraud.
Crisis management plans should be part of the toolkit of any responsible business. HR, reputation and contamination management are usually cases in point.
However, the report gives examples in a wider context: fictitious companies receiving goods on credit and disappearing, products being underprovided in terms of quality or quantity, and overcharging. The CIEH encourages businesses proactively to reduce the opportunities for fraud. The useful guide can help larger food and drink processors achieve savings in management time and “the bottom line”.
Food and drink producers should treat fraud as a business risk like any other. Good practice involves assessing the financial cost of fraud and determining the financial benefits of reducing its cost.
An initial observation of the study is that businesses do not have sufficient evidence to assess the extent of any fraud. By its very nature, fraud is often clandestine and therefore a silo approach is inappropriate. One of the recommendations is to manage fraud tactics centrally (thus placing the responsibility in the boardroom) and more could be done to give examples of best practice.
There are wider implications for HR managers and the workforce. Senior managers need to be appointing, and giving clear authority to, counter-fraud staff to secure any necessary changes. These changes need to apply to the entire workforce with a clear expectation on staff (agents and contractors too) to report any concerns. This should be well publicised with whistleblowing arrangements in place. Publicising this fact externally, e.g. to consumers and suppliers, could act as a further deterrent by making clear that the business is not a weak target.
It is never easy to implement new systems in any business. But the key is to get started. By involving your entire workforce and implementing an effective top-down counter fraud system you can be certain that your business will be better protected. By putting in place policies and procedures your staff will know what is expected of them and how they can meet those expectations. Remember, whilst it is impossible to be immune to fraud you don’t have to make yourself an easy target.
Chris Morse is a Chartered Legal Executive in our employment team in Truro. To discuss the content in this article or any other HR issue call 01872 265100 or email employment@stephens-scown.co.uk.