THE ROLE OF MSMES IN FOOD FRAUD

Dear Madam,
Did you know that MSMEs account for a significant portion of food sales but are also at high risk of food fraud—both as victims and contributors? Micro, small and medium enterprises (MSMEs) play a significant role in the food industry, contributing to food production, processing and distribution. However, they can be both victims and perpetrators of food fraud. Their role in food fraud can be examined in three main areas: Involvement in fraudulent practices, challenges in preventing fraud and contributions to combating fraud. MSMEs as perpetrators of food fraud. Some MSMEs may engage in food fraud either knowingly or unknowingly. Contributing factors may include financial pressures, lack of regulation or limited knowledge.

Adulteration

The most intentional common fraudulent activities rampant within the MSMEs are adulteration, whereby cheaper substances and /or unauthorised additives are used to increase volume or extend shelf life and intentionally mislabel food products to mislead consumers. Additionally, selling fake versions of branded products and substitution of high-quality products with cheaper alternatives. Lastly, alteration of expiration dates to extend product sales. All these are activities are aimed at maximising profits. Challenges MSMEs face in preventing food fraud. While some MSMEs may commit fraud intentionally, others struggle to prevent it due to several reasons such as limited resources. MSMEs often lack the financial and technical capacity to implement strict food safety measures.

Weak supply chain control which is due to reliance on multiple suppliers and hence some MSMEs may unknowingly use fraudulent raw materials. Furthermore, they may lack access to proper supply chain verification systems and quality control measures, increasing the risk of selling counterfeit or substandard goods. Regulatory compliance issues due to the fact that many MSMEs operate in informal markets where regulations are either weak or difficult to enforce. Additionally, lack of awareness, some small businesses are unaware of food fraud risks and how to detect fraudulent activities.

MSMEs as key players in combating food fraud

Despite challenges, MSMEs can also be part of the solution by:

• Strengthening supply chain transparency: MSMEs are encouraged to source from trusted suppliers and build relationships with reputable wholesalers and local farmers. They can also participate in co-operatives to increase buying power and ensure safer food sources. For better traceability, MSMEs should keep simple records of suppliers and food purchases and make use of mobile apps or digital receipts to track product authenticity.

• Improving food safety & handling practices: This can be achieved through basic food safety trainings. Governments and NGOs may offer free or low-cost workshops on food handling, storage, and fraud detection. Visual inspections also help to identify safe vs. fraudulent food. MSMEs are encouraged to practice proper storage and labelling i.e. use of correct storage methods (e.g., cold storage for dairy, sealed containers for dry goods). Products should be accurately labelled with expiry dates and origin information.
  

• Adopting certification programmes: In addition to improving food safety and handling practices MSMEs can join certification programmes, such initiatives help MSMEs meet quality and safety standards and improves financial benefits in the long-term.
  

• Capacity building in food fraud: MSMEs can educate their workers on food fraud risks and detection methods.

• Collaborating with regulatory bodies: MSMEs may partner with governments and food safety authorities to report fraud cases.

• Ethical business practices: By maintaining transparency and integrity, MSMEs can gain consumer trust and increase their market access.

Eswatini initiatives towards combating food fraud within MSMEs

Recently, Eswatini launched the Ingelo Certification Scheme designed to assist MSMEs in meeting product quality and safety standards, thereby facilitating their access to formal retail markets.

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