How much is Exposed the Romanian Market to Food

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The Romanian Government website offers 206 search results based on the term fraud, ..... Available at: 10.1111/ j.1750-.
Annals of “Dunarea de Jos” University of Galati Fascicle I. Economics and Applied Informatics Years XXIII – no2/2018 ISSN-L 1584-0409 ISSN-Online 2344-441X

How much is Exposed the Romanian Market to Food Fraud? Silvius STANCIU, Cezar Ionut BICHESCU A R T I C L E


Article history: Accepted June 2018 Available online August 2018 JEL Classification L66, Q10 Keywords: Counterfeiting, Adulteration, Food fraud, Public health, Romania


The increasing demand for food due to the increase in world population, higher incomes and higher living standards, together with the appetite for illicit gains, as old as mankind on producers or retailers amid limited natural resources represent factors that now lead to an increased incidence of food fraud. The paper proposes a presentation of food frauds, referring to the Romanian food market, approached as part of the European market. The research uses information from the literature, European databases on food frauds, national or community official press releases on the suspected situations of food falsification. The results of the research have highlighted a small number of notifications from national authorities regarding the presence of falsified food products on the domestic market, although Romania is incriminated as origin / transit country for a series of falsified food found on the American market. Information about food fraud, methods for prevention or information of consumers are difficult to access or are absent from the websites of organizations with duties in the field. Improving the European fraud monitoring and control system after the horse meat scandal has led to the identification of multiple ways of falsifying food and feed. The most often defrauded products are the animal products, which generally have a higher value compared to products of vegetable origin. © 2018 EAI. All rights reserved.

1. Introduction Food fraud represents the deliberate and intentional substitution, counterfeiting or falsification of agrifood products (final or intermediate products, ingredients, raw material or food packaging), sold on the market with the purpose of earning some undue financial gains, by increasing the apparent value of the product or decreasing the production cost. Food fraud and adulteration should be a cause for concern for the fair producers, government and consumers. In many situations, food frauds could affect the consumer’s safety, and become a risk to public health. 2. Literature review The Ministry of Agriculture and Rural Development (MADR) (2015), in the World Bank funded project, coordinated a study on the integrity of food in Romania. The report has shown that defrauded foods can reduce the level of trust in Romanian food products, attitudes that affect food consumption at national and international levels. In Romania, there is a high vulnerability on milk and dairy products, meat products, types of olive oil, honey, bakery products, wine and alcoholic beverages, organic and traditional products. In European Union EU the products most exposed to the risk of fraud are organic food, olive oil, milk, fish, cereals, honey and maple syrup, coffee and tea, spices, wine or certain fruit juices. The European Parliament (in its resolution from 14 January 2014 on the Food Crisis, Food Chain Frauds and their Control (2013/2091-INI) notes that there currently is no definition of food fraud in EU legislation and that Member States (MS) approach different methodologies in order to define it. It is considered that a uniform definition is essential for developing a European approach to prevent food fraud. According to European officials, controls should focus not only on food safety but also on preventing frauds and the risk of consumers being misled and it is necessary that the factors in the food chain should be registered as business operators and controlled. To prevent the food incidents, in EU has been created the Rapid Alert System for Food and Feed (RASFF), in order to protect the population from food products that do not comply with European food safety standards. The European Food Safety Authority (EFSA) provides independent scientific advice on food risks. EFSA issues opinions on existing and emerging food risks. Competence of the Agency includes food and feed safety, nutrition, animal health and welfare, plant protection, plant health (EU, 2018). ,

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Dunarea de Jos University of Galati, Romania. Email addresses: [email protected], [email protected]

The EU Food Fraud Network (FFN), established by the European Commission in 2013 after the horse meat scandal, in order to allow EU countries to collaborate in official controls related to potential intentional breaches of the food chain law with cross-border impact. FFN comprises 28 national contact points in the MS, Switzerland, Norway and Iceland and the European Commission (EC, 2018). Stanciu's analysis (2015b) of the Romanian food market has highlighted the existence of certain fraudulent manipulations, which affect not only animal products, which are more expensive, as well as the cheaper vegetable products. There were cases where drinking water was falsified, the lack of modern means of control, and the qualified staff favouring these fraudulent manipulations. The US food monitoring system is much stricter than the European one, and comes with a number of definitions of the food fraud, the most quoted ones being those given by Spink and Moyer (2011). According to author, food fraud is a collective term used to encompass the deliberate and intentional substitution, addition, tampering, or misrepresentation of food, food ingredients, or food packaging; or false or misleading statements made about a product for economic gain. Spink et al (2015) defined food fraud as deception, using food for economic gain. Elliott, (2018) mention that any actions taken by businesses or individuals that deceive other businesses and/or individuals in terms of misrepresenting food, food ingredients or food packaging that brings about a financial gain could be considered a fraudulent act. GFSI Position on Mitigating Public Health Risk of Food Fraud (2014) gain and includes substitution, unapproved enhancements, misbranding, counterfeiting, stolen goods or others. Food frauds lead to global costs at industrial level estimated to 10 to 15 billion dollars annually in US and that affects about 10 percent of states food supply. The US Pharmacopeial Convention (USP) has developed the Food Fraud Database (FFD 2.0) to help producers and retailers make informed decisions about ingredients in their portfolio that may have a greater potential of being adulterated. The goal is to provide brand protection, increase consumer confidence and support food safety regulations of the US Food and Drug Administration (FDA). The FFD 2.0 network contains complete information, accessible against payment, such as incident reports, surveillance records and analytical methods (from scientific journals), media publications, regulations, court records and of professional associations around the world, and a database of related ingredients and adulterates. Stanciu et al. (2014) analyses the effects of the horse meat scandal on the Romanian market, concluding that the lack of communication and the transmission of some erroneous information have led to the scale of the scandal. Fraud does not necessarily affect the consumer’s health, the horse meat being a product with a nutritional and energy value close to beef, but the credibility of the consumer has suffered (Stanciu, 2015a). 3. Material and methods Information on food fraud at European level has been collected by using official press releases rom the European Union, the European Parliament, the European Commission or the European Food Safety Authority (EFSA). For the US area, the information came from the website Food Fraud Database, USP. At the national level, there were used the official press releases of the Romanian Government, the Ministry of Agriculture and Rural Development, the National Sanitary Veterinary and Food Safety Authority, the National Authority for Consumers Protection and of the Pro Consumers Association APC Romania. Data on defrauded food in Romania (origin or identification) was collected from the reports of the Rapid Alert System for Food and Feed and of the EU Food Fraud Network (FFN). The bibliographic documentation was based on articles in specialized journals available on the Web of Science Clarivate, Scopus, or Google Scholar. Certain credible information on food counterfeiting has been collected from the online media, by using some recognized economic publications or journals of professional associations. Data collected has been verified, ordered, interpreted. The results achieved following the research were discussed, and where the case was compared with information from the scientific literature in the field. 4. Food fraud on the Romanian market Although the theme should be of the greatest importance to Romanian officials, companies and consumers, an internet search by Google using the term "food fraud" shows 412,000 results, especially from the non-specialized media area. In Romania, the authorities involved in the control of food fraud are The National Sanitary Veterinary and Food Safety Authority NSVFSA, the Ministry of Agriculture and Rural Development MARD, the Ministry of Health MH, the National Authority for Consumer Protection NACP and the Local Police. The Romanian Government website offers 206 search results based on the term fraud, of which 15 are related to the agri-food sector (including statements amid the falsified horse meat scandal), and on the term falsification leads to 5 results, unrelated to the agri-food sector (Romanian Government, 2018). On the website of the MARD, the search for the fraud term leads to a single reference to the food sector (referring to the official press release on the horse meat scandal issued in February 2013) and the falsification term leads to the measures ordered by the Ministry (regarding the verification of quality and conformity of all wines existing on the domestic market, following the identification of some falsified batches, in April 2018). (MARD, 2018) 72

MH does not provide information about frauds or falsification of food products on the domestic market, keyword searches on the website of the institution leading to null results (Ministry of Health, 2018). NSVFSA is the central authority that coordinates technically and administratively the entire activity of the sanitary-veterinary and food safety services, organizes and controls the performance of sanitary and food safety activities. The search in the NSVFSA database of the term fraud highlights 3 food-related results (a notification of RASFF from 2015 on products susceptible to being defrauded with origin in Romania, an intervention plan - Food Crisis Management and an Order of the Authority for transposing the Council Directive 96/23 / CEE into national law) along with issues related to integrity of civil servants. The search for the term falsification on the website leads to 7 results (2 referrals to RASFF, activity reports of NSVFSA from 2014 and 2013, Guide on Sampling Veterinary Medicinal Products, European Best Practices Guide for the Manufacturing of Safe Fodder Raw Materials 3.1 and the MADR Order for the approval of the rule on the Rapid Alert System for Food and Feed (2005). (NSVFSA, 2018) NACP is a specialized body of the central public administration, with legal status, subordinated to the Romanian Government, has the quality of protection of the rights of any consumer, as well as a permanent source of advice in the purchase of non-food products or for the conclusion of contracts for various services. The search for the term fraud on the NACP website highlighted two European press releases related to online commerce and the counterfeiting term highlighted two reports on national controls carried out by the institution on the marketing of wine and alcoholic fermented beverages (2017), namely food for children in schools through governmental programs (Roll and Milk Programme, or Apple in Schools) (NACP, 2018). Pro Consumers Association APC Romania is an apolitical NGO’s, founded in 1990, which main goal consists in defending, promoting and representing through all legal means the rights and interests of consumers in relations with business operators and state institutions. The search for the term fraud on the APC website highlighted 12 results, of which 7 related to the food industry (the most recent in 2017 – a study on margarine), and the search for falsification term highlighted a study on the risk of gastric cancer when consuming black olives (APC Romania, 2018). At European level, since the establishment of the RASFF network, there have been recorded a total of 1,254 food frauds/adulteration notifications, of which 20 with maximum risk. The share of information transmitted by categories of notifications is shown in figure 1.

Figure 1. RASFF notifications regarding food fraud/adulteration Source Author, by using RASFF (2018) Between 2008 - 2018, Romania registered 26 notifications related to food frauds, informing the network partners about 25 batches of products rejected on the border, one of the notifications being from the category Information for attention. Out of the total, 14 notifications highlighted non-serious risks to consumers, the other being classified as undecided. The distribution of notifications made by NSVFSA is shown in figure 2.


Figure 2. Notifications sent by RASFF to Romania regarding fraud/adulteration Source: Author, by using RASFF (2018) During the period 2006-2018, Romania has not notified any food fraud/adulteration detected on its own market or at the border with other states. Most of the notified products are imported from China (10), followed by USA (6) and Ukraine (3), the rest of the origin countries having a single incriminated batch (figure 3).

Figure 3. Fraud/adulteration by origin Source: Author, by using RASFF (2018) The category dietetic, supplements and fortified foods were the most often defrauded foods (9 batches), followed by nuts, nuts products and seeds equal with honey and royal jelly (3 batches), soups, broths, sauces and condiments; fish and fish products, respectively eggs -egg products (2 batches), the rest being evenly distributed on other food groups (1 batch). Regarding the products from Romania, 6 notifications of fraud/adulteration were made for 4 batches of meat and meat products and for 2 batches of the food group prepared dishes and snacks, all in 2013 (during the period of the horse meat scandal). 4 notifications were made by Greece for meat and meat products, other than poultry, Germany and the United Kingdom having notified a batch of prepared dishes and snacks. No notifications regarding or feed or food contact material have been made. Fraud/adulteration notifications for some batches of food that have been transiting Romania or have ingredients also coming from Romania are shown in figure 4.


Figure 4. Notifications for food fraud/adulteration (keyword Romania) Source Author, by using RASFF (2018) Of the 198 notifications, alerts were 98, 45 information for follow-up, 30 information, and one border rejection notification. Most notifications were submitted in 2013 (related to the horse meat fraud, incriminated as coming from Romania) (figure 5).

Figure 5. Evolution of notifications related to food fraud (keywords Romania) Source Author, by using RASFF (2018) In fact, 60% of the notifications regarding Romania were sent in the network after 2013, explained by the increase in the volumes of agricultural products exported by Romania to the European market or by the opening made by the Romanian officials for multinational companies. The distribution of notifications (Nt) by groups of products is shown in table 1.

No. Product Category 1. cereals & bakery products 2. cocoa & cocoa preparations, coffee and tea 3. confectionery 4. dietetic foods, food supplements, fortified foods 5. eggs & egg products 6. fats and oils

Table 1. Notifications by product category Type Nt No. Product Category food 11 13. herbs & spices food 4 14. honey and royal jelly

Type food food

Nt 1 11

food food

3 7

15. meat&meat products (other than poultry) food 16. milk and milk products food

40 12

food food

8 2

17. natural mineral water 18. nonalcoholic beverages

1 1


food food

No. Product Category 7. feed additives 8. feed for food-producing animals - (obsolete) 9. feed materials 10. fish and fish products 11. food contact materials 12. fruits and vegetables

Type Nt feed 2 feed 1

No. Product Category 19. nuts, nut products and seeds 20. other food product / mixed

FCM food FCM food

16 21. pet food 7 22. poultry meat &poultry meat products 10 23. prepared dishes and snacks 15 24. soups, broths, sauces & condiments Total 198 notifications Source Author, by using RASFF (2018)

Type food food

Nt 7 1

feed food food food

1 27 9 1

Except for 30 batches in the Feed / FCM category, the other batches incriminated of fraud / adulteration were represented by food products. The most relevant categories of products were meat and meat products (40), namely poultry and poultry meat products (27), which accounted for more than 30% of the products affected by falsification. Products of vegetable origin were less incriminated than those of animal origin, the main reasons for rejection being related to inappropriate microbiological load (presence of Listeria monocytogenes, Salmonella sp.), respectively by the presence of some insecticide / pesticide residues. Information on food frauds, according to Food Fraud Network Activity reports for 2014-2018, is presented in table 2.

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Tabel 2. Fraud/adulteration Fraud Absence of documentation/ falsified or wrongly handled Incomplete documentation Documents: Other Adulteration Counterfeiting Falsified certification/documents Exceed maximum levels Labelling noncompliance/Mislabeling Official registration number (absence of) Other (illegal exports of ABPs) Prohibited products/unfit for human consumption Prohibited substances Prohibited treatments and/ or process Substitution/ Species or ingredient substitution Suspicion of illegal export Total Source author, by using FFN Reports (2014-2017)

2014 0 0 0 2 3 13 0 15 1 1 4 6 5 10 0 60

2015 6 0 0 0 10 0 0 37 0 0 10 5 14 6 20 108

2016 4 6 17 1 2 0 11 58 0 0 0 10 27 20 0 156

2017 0 36 0 0 0 0 0 88 0 0 0 0 28 88 0 178

In 2014, 60 cases were reported using FFN. Meat products is the category of foodstuffs for which the majority of exchanges took place through the Network in 2014, followed by fish products and honey. In 2015, 108 cases were exchanged by the Food Fraud Network. Out of these, 12 were exchanged via the AAC system that was launched in November 2015. The majority of exchanges that took place in the Network in 2015 concerned suspicion of illegal exports, followed by exchanges on fish and fish products. Importantly, however, statistical conclusions related to potential "food fraud" cases in Europe cannot be drawn from these data given that Member States may also exchange information outside of the FFN and that cases which do not have a crossborder dimension, i.e. which occur at purely national level, are not exchanged via the Network. In 2016, a total of 156 cases have been exchanged in the AAC FF, of which 147 concern food and 9 concern feed. A total of 178 cases were exchanged in the AAC FF in 2017. The list of cases exchanged in the system does not represent the entirety of food fraud incidents occurring in the EU. In fact, there is a significant caveat in the statistics provided below: differently from the RASFF, the AAC works on a voluntary basis and only for cross-border noncompliances. 5. Conclusions Given the critical situation faced at European level for scandal of horse meat, the EU has taken, particularly in terms of improving institutional communication by creating Given the critical situations encountered at European level, particularly the horse meat scandal, EU has taken actions, especially in terms of improving the institutional communication, by creating a system of European networks for reducing the criminal phenomenon on the Community Food Market, Food Fraud Contact Points (FFCP), Food Fraud Network (FFN), and Administrative Assistance and Cooperation (AAC), in 76

addition to the existing ones. Romania has recorded modest progresses in detecting food frauds, the national monitoring system being at an early stage. National legislation is correlated with the European one, which tries to cope with the challenges created by food falsification / fraud. Communication with consumers, official information provided by national communities about food frauds are brief, or missing from the websites of specialized institutions. We consider that more stringent measures are required at national level in order to reduce the cases of fraud in the agri-food chain. Inappropriate situations are common on the Romanian food market, although they are not properly recognized and identified by the national authorities. References 1. 2.

3. 4. 5. 6. 7. 8.

9. 10. 11. 12. 13. 14. 15.

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