Food fraud undercuts genuine producers as losses hit £2bn

Food fraud is costing the UK economy up to £2 billion a year, with legitimate food businesses losing sales as fraudulent products displace genuine goods from the market.

The findings highlight the commercial risk to farmers, processors and food businesses whose products depend on trusted origin, provenance and certification.

Researchers at the University of Portsmouth estimate the annual economic cost at between £400 million and £2 billion, with around three-quarters of the damage linked to fraudulent products replacing legitimate alternatives.

The study examined offences including product substitution, false labelling and document fraud, where food is deliberately misrepresented for financial gain.

Published in the Journal of Economic Criminology, the research uses a new method that assesses entire criminal operations rather than focusing only on individual incidents.

This broader approach also captures losses suffered by genuine businesses when fraudulent products take sales away from properly labelled and sourced food.

Provenance fraud is one area highlighted by the researchers, including cases where smoked salmon was marketed as Scottish despite being sourced from Norway.

Such practices can undermine the value attached to recognised origins, assurance schemes and trusted labelling, while placing legitimate businesses at a competitive disadvantage.

The consequences can extend beyond financial losses.

Food fraud can damage consumer confidence in supply chains and, in the most serious cases, create significant public health risks.

Dr David Shepherd, from the University of Portsmouth’s School of Criminology and Criminal Justice, said: “Food fraud is often perceived as a niche issue, but our findings show it has a substantial economic impact on the UK.”

“It is not just about consumers paying for something that is not what it claims to be. It undermines honest businesses, distorts markets and, in the most serious cases, puts people's health at risk.”

Shepherd said measuring the full economic impact could help policymakers and enforcement bodies decide where resources should be targeted.

“By measuring the full economic cost, we can better understand the scale of the problem and make stronger evidence-based decisions about where enforcement and prevention efforts should be focused.”

The research also suggests stronger enforcement could deliver significant economic returns.

Based on the cases analysed, prosecutions may generate a return on investment of more than 400%, indicating that spending on investigations could potentially pay for itself while reducing wider losses across the food system.

Despite the scale of the financial impact, researchers say food fraud remains comparatively uncommon because of the checks already built into UK food supply chains.

Regulators, manufacturers, retailers and certification bodies operate multiple layers of quality assurance, making it more difficult for fraudulent products to enter legitimate markets.

Professor Lisa Jack, from the University of Portsmouth’s School of Accounting, Economics and Finance, said the strength of those safeguards was one of the more encouraging findings.

“One of the most encouraging findings from this research is that the UK's food industry has developed systems that make fraud significantly more difficult than in many other sectors.”

“Businesses, regulators and assurance schemes work together to create barriers that prevent fraudulent products entering legitimate markets.”

However, she warned that existing controls should not lead to complacency.

“However, this is not a reason for complacency. Continued investment in prevention and enforcement is essential if we are to maintain public confidence in the food we buy and protect businesses that play by the rules.”

The study provides what researchers describe as the first evidence-based estimate of the overall economic cost of food fraud in the UK.

Researchers say continued investment in prevention and enforcement will be essential to protect legitimate businesses, maintain confidence in UK food supply chains and prevent fraudulent products from undercutting genuine produce.