NSF Food Fraud Risk Model

29 March 2017
Ulli Gerntholtz
 SAAFoST-IUFoST
Food Fraud Workshop

Background

Vulnerability Risk
Assessment –
Raw Materials

Vulnerability Risk
Assessment-
Suppliers
 The Food Fraud Model
This work was commissioned by the Food Standards
Agency (FSA) in 2013

The project aimed to create deliberately simple criteria

indicative of likelihood of fraud (measurement indices)
for either the three originally proposed or subsequently
modified factors such that food groups/categories
could subsequently be mapped on the Boston
Consulting Group (BCG) Style framework to highlight
vulnerabilities enabling better targeting of surveillance
measures, supply network controls and preventative
interventions
 Use of the model

The model delivers a working framework by which the

technical and/or food safety teams in food businesses
or in regulatory bodies can begin to better anticipate
which product lines are most/least likely to be targeted
by fraudsters and why, whether or not they have been
attacked previously.
 Use of the model
Once food products or broad food categories have been
assessed in terms of their attractiveness to a “predator” fraudster
i.e. one who is focussed on a deliberate systematic crime then
interventions can be designed to thwart such activities by the
application of interventions which move vulnerable products from
the top right to bottom left of the Boston Consulting Group (BCG)
style matrix.
These interventions might include
• Increasing detection likelihood by increasing the frequency of
or forensic quality of auditing.
• Changing the nature of routine third party auditing to focus
more effectively on fraud or introducing new Fraud Specific
Audits.
• Enhanced frequency or sophistication of sampling and testing
regimes
• Making the insertion of fraudulent replacement into the supply
chain more difficult by enhanced security measures.
Vulnerability Risk
Assessment-
Raw Materials
 Methodology
Think like a criminal: identify the possible frauds
Assess risk with the NSF model:
• Profit criteria
• Detection criteria
• Fraud easiness criteria
 Raw Material Risk Assessment
Considerations
For selected raw materials to be evaluated there are a number
of factors to consider;
Potential Profit Factors
– Cost of raw material
– Cost of Adulterant
– Raw material availability
– Adulterant availability
– Economic pressure- increased demand
Likelihood
– History of substitution or adulteration
– Analytical detection methods
– Testing frequency
– Supply chain complexity
– Cost of testing
Ease of Substitution or Adulteration
– Physical state
– Method of Substitution or Adulteration
– Packaging type
 Methodology - Profit
Cost of Commodity
High 5 High raw commodity cost
greater than €10/kg indicates
that profits more likely to be
high
4 High – medium raw
commodity cost between
€10/kg and €3/kg indicates
profits more likely to be high
3 Medium raw material
commodity cost between
€3/kg and €1.5/kg indicates
profits more likely to be
moderate
2 Medium-low raw commodity
cost between €1.5/kg and
€0.5/kg indicates profits more
likely to be low
Low 1 Low cost less than €0.5/kg
indicates that profits are likely adulterant(s) greater than
to be low
Profit criteria (1: low profit, 5: high profit)
Cost of Adulterant Economic Pressure
Low cost of raw commodity Low availability
adulterant(s) less than €0.5/kg Price increase
indicates profits likely to be
high
Low-medium cost of raw
commodity adulterant(s)
between €0.5/kg and €1.5/kg
indicates profits more likely to
be moderate
Medium cost of raw Medium availability
commodity adulterant(s)
between €1.5/kg and €3/kg
indicates profits more likely to
be moderate
Medium- high cost of raw
commodity adulterant(s)
between €3/kg and €10/kg
are likely to be low
High cost of raw commodity High availability
€10/kg indicates that profits
are likely to be low
 Methodology - Likelihood
Previous Analysis method Testing Supply Chain Cost of
Reports/ for detection Frequency Complexity Testing
Incidents (laboratory)

Highly 1 Current Method Positive release Direct Supply Low cost

Likely accredited and on intake
specific

2 Year ago Method Routine Multiple

accredited and Supply
not specific 1 tier

3 1-5 years Method not Import checks Trader

ago accredited

4 5-10 years No analytical Surveillance Commodity

ago method programme/ Multi Tier
Volume/weight infrequent

Low 5 Never No method None/ Co- High cost

Likelihood organoleptic Unavailable operative/
Bulk storage

Likelihood criteria (Low likelihood– 1 to 5 – High Likelihood

 Methodology - Ease
Easy to Physical State Availability of Ease of Labelling/ Tamper
fraud Adulterants / Adulteration/ Proofing
Substitutes Substitution (to be filled by
factories only)

High 5 Liquid Freely Available Dilution/ Mixing Bulk / No labelling/

No tamper proof

4 Powder Widely Available Labelling Sticker/

Removable

3 Solid/Frozen Available ( At a Freezing Integral/ Tamper

cost) proof

2 Heterogeneous/ Available Re-packing Barcode

Solid/ Chilled (Expensive)
Product

Low 1 Entire Restricted/ Complex Retail Pack

Technically processing
Complex

Fraud ease criteria = how easy on this Raw Material?

Raw Material Vulnerability Exercise
Product: Method 1 - Vulnerability Assessment of Raw Material
Profit Criteria
Score Cost of Commodity Cost of Economic Total Score
Adulterant Pressure
High = 5
Low=1
Average Score

Detection Criteria
Score Previous Analysis Testing Supply Chain Cost of Total
reports/incidents Method Frequency Complexity Testing Score
Likelihood
High = 1
Low = 5
Average Score

Use Average Score Coordinates to plot position on Model Matrix

Ease of Fraud Method
Score Physical State Availability of Ease of Labelling/tamper Total Score
adulterants/ adulteration/ proofing
substitutes substitution (factory only)
Easy of Method
High = 5
Low = 1
Average Score
Score- Decide upon High, Medium or Low.
3 size sticker
Assessment of Raw Material Risk

High Profit
Vulnerability
zone

High Low
Detection Detection

Low Profit
Vulnerability Risk
Assessment-
Suppliers
 Stakeholder Identification

Know your suppliers.

– What are your
raw materials/packaging/transport?
– Who are the immediate suppliers?
– Who supplies your suppliers?
– When was it last reviewed?
– Do you need to audit your suppliers?
– Will a self assessment questionnaire suffice?
 Supplier Risk Assessment
Considerations
Factors to consider;
Business Impact
– Use and turnover of the raw material
– Volume and value of raw material supplied by the
supplier
– Number of sites of production

Supplier Assurance
– Country of origin
– Certification status
– Contractual/ Partnership arrangements
– Commercial relationship status
– Collaboration duration
– Quality evaluation (KPI’s)
– Own supply chain complexity
 Business Impact

Level % Turn over Category For % Turn over Supplying Number of Operational
Company Company Locations Supplied

1 <1% <0,5% 1
2 >1 and below 5% between 0,5 and 1% 2
3 between 5 and 7,5% between 1 to 2% 3
4 between 7,5% and 15% between 2 to 5% 4
5 above 15% above 5% 5
 Supplier Assurance

Quality
Country Contract/ Commercial Collaborative
Level Certification Evaluation
Location Partnership Relationship Duration
(KPI)
1 IFS + BRC Europe Partnership Good 25 >10
2 20
3 IFS or BRC Non EU - Contract or Medium 15 4 to 10
Corruption GPC
index <1,5

4 10
5 nothing Non EU Nothing Bad <10 <3
Corruption
index ->1,5
 Suppler Vulnerability Exercise

Supplier:
Products Supplied:

Business Impact Criteria

Score % TO Category % PTO Supplier No OpCos Total Score
To WSN Supplied
High = 5
Low=1
Average Score

Supplier Confidence
Score Certification Country Contract/ Organic Commercial KPI Coll. Total Score
Partnership Relationship Duration
High = 1
Low = 5
Average Score
Use Average Score Coordinates to plot position on Model Matrix
Assessment of Supplier Risk

High Financial
Impact Vulnerability
zone

High Low
Confidence Confidence

Low Financial
Impact
Vulnerability Assessment
 Methodology

Assessment of the food fraud vulnerability on raw materials

ugerntholtz@nsf.org
Cell: 083 4883202
Tel: 021 880 2024
www.nsfafrica.com

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