The Hidden Dangers of Fraud and What It Means for Food and Beverage Professionals

Written by Staff Writer

Food and beverage (F&B) handlers and managers serve on the front lines of protecting the integrity of what reaches consumers’ plates. While many food safety risks are accidental, some of the biggest threats are intentional, like fraud.

Fraudulent food practices are a growing concern across the industry. They often go unnoticed, and the consequences can be severe for workers, businesses and consumers. Understanding how these incidents occur and how to prevent them is essential.

Fraud vs. Adulteration: What's the Difference?

Fraud occurs when food products are intentionally misrepresented, substituted or tampered with. It can happen at any point in the food supply chain, including production, processing, packaging and distribution.

Adulteration occurs when a food item is deliberately altered to compromise its quality or authenticity. This can involve diluting, substituting ingredients or adding undeclared ingredients.

Common Examples

Deceptive food tactics have been around for centuries. The United States began addressing them as early as 1784, but perpetrators of fraud have learned to evolve their practices.

Some products are more vulnerable to intentional substitution due to high demand, limited supply or premium pricing. Below are some of the most commonly manipulated items:

Olive Oil

Olive oil is a frequently targeted food. Extra virgin olive oil has often been replaced with palm oil, vegetable oil or other lower-grade oils while still being marketed as pure.

Seafood

Seafood fraud is also prevalent. High-value fish species are often swapped for cheaper alternatives or mislabeled, misleading consumers and creating a potential risk of foodborne illnesses.

Milk

Milk products have also been involved in fraud. Numerous cases involve reconstituted milk powder, milk fat substitutions or dangerous additives such as melamine (a synthetic chemical used in plastic products).

Spices

Chili powder, paprika and saffron are commonly diluted with fillers to increase profit margins.

Fruit Juices

Pomegranate, grape and lemon juice have frequently been diluted or blended without proper disclosure.

Coffee

Coffee beans are often mixed with roasted corn or barley.

Others

Honey and maple syrup brands have been found to contain high-fructose corn syrup. Conventionally grown produce has also been sold as organic due to gaps in verification systems.

Why Phony Foods Can Be Hard to Detect

Unlike other food hazards, like bacterial outbreaks or physical contaminants, adulterated items don’t tend to show obvious defects nor cause immediate illnesses. Fraudulent practices are designed to blend in with legitimate production processes. This allows the deception to go undetected for prolonged periods.

Because many cases go unnoticed, the economic and public health consequences are often underestimated. Studies from the U.S. Food and Drug Administration (FDA) suggest that deception affects approximately 1% of the food and beverage industry worldwide, but the impact may be much higher.

Earlier reports presented by independent researchers in 2019, including the Consumer Brands Association (formerly the Grocery Manufacturers Association), estimated the global cost of fraud in the food industry ranged from $10 to $15 billion per year. However, more recent figures from the FDA suggest the annual worldwide cost could be as high as $40 billion.

Public Health Risks

While not all incidents result in sudden or mass illness, the potential risks of tampering with consumable goods are significant. Substituted ingredients may introduce allergens, toxins or contaminants, leading to long-term health effects.

High-profile cases throughout history highlight these dangers. The addition of melamine to milk products has caused widespread disease and fatalities. Perhaps one of the most notorious scandals was the 2008 case involving Chinese manufacturers who added melamine to infant formula to artificially inflate protein levels. Their actions resulted in over 300,000 illnesses (including kidney failure in babies) and at least six infant deaths.

The mislabeling of ground beef and meat products has also raised serious concerns. The 2013 horse meat scandal in Europe exposed weaknesses in supply chain oversight and severely damaged consumer confidence. Beyond physical harm, these incidents erode trust in brands, regulatory systems and the goods themselves.

Food Recalls: When Fraud Triggers Industry-Wide Consequences

Recalls are often the most visible consequence of deceptive practices. While not every recall is tied to corruption, incidents involving adulteration frequently escalate into large-scale product withdrawals once discovered.

Product recalls can lead to:

• Disrupted facility and manufacturer operations
• Revenue loss for businesses
• Damaged trust in brands
• Exposure to weaknesses in food safety systems

Peanut Recall: An Eye-Opening Example of Negligence

One of the most cited examples of how misconduct can lead to catastrophic outcomes is the 2009 Peanut Corporation of America case. Company products contaminated with salmonella were knowingly distributed, resulting in one of the largest recalls in U.S. history.

The outbreak sickened hundreds. It triggered massive takebacks across numerous brands and may have contributed to nine deaths. Beyond the public health consequences, the case led to criminal convictions, highlighting how negligence and willful misrepresentation can cross from a regulatory violation into criminal liability.

The Prolonged Effects of Product Removals

Product withdrawals linked to fraud are especially damaging because they often involve staple items and brands that consumers put their faith in. When an ingredient is compromised — whether through substitution, dilution or adulteration — it can force downstream recalls throughout the production process.

This ripple effect increases financial losses, disrupts distribution networks and places strain on regulatory agencies tasked with protecting public health and safety.

Regulatory Oversight and Enforcement

The U.S. Department of Agriculture (USDA) and the FDA are the agencies responsible for maintaining food safety in the United States. The USDA regulates meat and poultry products, while the FDA sets the standards for processed foods, dairy, eggs and seafood.

The FDA also monitors the market for economically motivated adulteration through inspections and analytical testing. Food defense efforts are a key part of this effort, guided by the Federal Food, Drug and Cosmetic (FD&C) Act and supported by the Mitigation Strategies to Protect Food against Intentional Adulteration rule, a provision of the Food Safety Modernization Act (FSMA).

Detection, Testing and Food Authenticity

Detecting scams requires constant adaptation. Fraudsters constantly evolve their methods, forcing regulators and food manufacturers to do the same. One way to thwart their efforts is to perform regular analytical tests.

Authenticity testing can determine the geographic origin, ingredient identity and compliance with standards such as the Food Chemicals Codex and guidelines set by the United States Pharmacopeial Convention.

Advanced techniques in food science, including isotope analysis and molecular testing, are increasingly used to verify authenticity. Many manufacturers now conduct routine tests on raw materials and finished food products to protect their supply chain.

Databases tracking incidents and media reports provide valuable insight into emerging risks. However, testing remains the most reliable method for uncovering deceptive practices.

The Role of Food Safety Management Systems

An increasing number of modern systems incorporate fraud vulnerability assessments. The Global Food Safety Initiative, led by the Consumer Goods Forum, emphasizes evaluating risk factors such as ingredient sourcing, supplier history, price volatility and geographic origin.

By identifying weak points in the production process, businesses can implement controls that target premeditated adulteration to protect food integrity. This includes supplier verification programs, tighter procurement standards and improved traceability.

The Economic and Ethical Impact on Businesses

Food ingredient fraud creates an uneven playing field. Legitimate producers who follow regulations and invest in quality controls may struggle to compete with lower-priced, manipulated alternatives. Investigations, recalls and legal liabilities can result in devastating financial losses and long-term reputational damage.

Doing Your Part to Protect Your Customers

Awareness, education and robust food protection protocols can significantly reduce the likelihood of food fraud. By integrating prevention policies into everyday operations, handlers and managers can help safeguard the public.

Explore our training programs today and learn how you can prevent unsafe food from reaching consumers.