Responding to the publication, today, of a Government-commissioned report into the horse meat scandal last year, Annette Barker, Forensic Director at KPMG, warned that unless organisations tackle weak links in their supply chain, they risk exposure to fraud and a repeat of the crisis.
She says: “Today’s report represents a significant step forward in the battle to ensure the UK’s food supply is safe from harm. By setting out the actions that can be taken to improve the integrity of food supply networks, it offers a blueprint to ensure food is protected from field to fork.”
Produced by Professor Chris Elliott of the Institute for Global Food Security at Queen's University Belfast, the report acknowledged that the UK has high standards of food safety, but it suggested that the scandal clearly showed criminal activity in the global food chain.
Professor Elliott’s report highlights the importance of high quality, robust audits, involving the use of forensic accountants to gain assurance over the veracity of the supply chain.
Annette adds: “The horsemeat scandal served as a stark reminder of the consequences of supply chain failure. Whilst the food industry has clearly made progress there is still much to be done to ensure robust controls are in place. How far, for example, have organisations gone to scrutinise their suppliers and brokers on an ongoing basis?
“The pressure to keep a steady supply of food at reasonable prices remains high which leads to suppliers looking for ways to keep costs competitive. Some food supply chains have become increasingly complex with agreements spanning the globe. Cost pressures and increased complexity naturally bring an increased risk of fraud. That is why the report is right to call for more stringent auditing of all aspects of the UK’s food supply chain. The importance of robust counterparty due diligence for organisations in today’s market cannot be overstated meaning that stark questions should be asked as to how far down the chain those procedures should go.”
Professor Elliott’s report also recommends that a specialist Food Crime Unit is created, with the expertise to undertake investigations into serious food fraud. Annette concludes: “Our own analysis of fraud across the UK shows that supply chain fraud has grown in the past 12 months. Not only is this bad for business; it has a real human cost. As fraudsters become more sophisticated an increased focus on fraud detection and prevention is essential to ensure consumer safety and the integrity of our food supply chains. A new Food Crime Unit must establish effective links with industry and enforcement agencies, working closely with third parties in order to ensure it can be effective in meeting its objectives to deter professional criminals from targeting the food industry.”
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Mike Petrook, KPMG Press Office
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.