Researchers have claimed food fraud is costing food businesses in Britain £11.2 billion each year.  

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A study undertaken in the wake of last year's horsemeat scandal, and the subsequent Elliott Report, shows that the food industry could see profits rise by more than 34 percent if it tackles food fraud. The research, conducted by Professor Lisa Jack of the University of Portsmouth's Centre for Counter Fraud Studies, suggests that tackling food fraud would 'enable' companies to reduce prices for their customers.

The horsemeat scandal erupted when undeclared and often cheaper meats such as horse were detected, first in frozen burgers labelled as being 100 percent beef, and later in other processed foods across Europe. In the wake of the scandal, discussion and emphasis from government and its advisors has revolved around tackling food crime, though independent experts have suggested this is not the main lesson to be learned from the debacle.

Manchester business school's professor Karel Williams said at the time that "The official line is that horsemeat is not a food safety issue, we are the victims of mafia fraud and the supermarkets should test more. This is both naive and a distraction. The problem is long and constantly shifting adversarial supply chains, where processors are buying in on price and the delivery by 40 tonne chiller truck comes from somewhere different each week."

Responding to the publication of the Elliott Review in December, Professor Tim Lang of City University in London said the implications of the scandal go far beyond food fraud. Professor Lang said "It's time for tougher food policing as well as rethinking our demand for 'cheap' meat," adding that the government-commissioned report "Tells a sorry tale of how public functions that protect our food have been cut and so fail us."

The professor, a former farmer and an academic based at the UK's Centre for Food Policy, added, "This [series of cuts] is being enacted, let's not forget, in the name of the Coalition government's obsession about cutting the state to pay for the private sector's banking crisis. Above all, this is a tale of crime and fraud filling a gap created by political choices."

Even so, the new report by Portsmouth's Prof Jack and Professor Jim Gee of business advisers PKF Littlejohn, takes cues from the Elliott report to try and help the food and drink sector better protect itself against fraud. The authors have made available a new, free, on-line Self-Assessment Fraud Resilience tool for companies to find out how well or badly they are protected.

Professors Jack and Gee said major food companies are gradually becoming aware of the need to protect themselves from food fraud. Prof Gee suggested that companies could increase their profits by between 10 and 100 percent by tackling food fraud.

Their report was launched on Tuesday at a Food Crime Conference organised by the Institute of Food Safety Integrity. The researchers reviewed data from 73 listed food and drink industry companies with total annual sales of more than £200bn.

Professor Jack commented, "Food fraud is always financially motivated.  On the whole, food fraud does not harm public health.  It's more that consumers and food businesses are not always getting what they pay for.

"Scientific testing and systems audits have a place but food fraud, like any other fraud, can also be tackled if you follow the money, ask the right questions and have controls in place that make fraudsters think twice before attacking your business.

The Portsmouth university professor continued, "Food fraud is about more than just the food: for example, many frauds also evade duties and VAT, and so we all lose out from lost revenues. Margins are so tight in the food sector that almost any food can be misrepresented to get a bit of profit for a fraudster.”