Food fraud costs UK economy up to £2 billion annually, study finds

Food fraud costs the UK economy between £400 million and £2 billion a year, according to University of Portsmouth researchers, with legitimate food businesses losing sales when fraudulent products displace genuine goods.

The study, published in the Journal of Economic Criminology, develops a new way to measure the economic impact of food fraud by analysing entire criminal schemes and the “market cost” created when illicit products take sales from legitimate businesses.

Around three-quarters of the estimated economic impact comes from fraudulent products directly replacing legitimate sales. The researchers also estimate that prosecutions could generate a return on investment of more than 400 percent, strengthening the economic case for prevention and enforcement.

Recent cases include smoked salmon marketed as Scottish despite being sourced from Norway. More serious cases can also threaten public health, including counterfeit spirits containing industrial chemicals.

“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,” said Dr David Shepherd, from the University of Portsmouth’s School of Criminology and Criminal Justice. 

“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.”

What the findings mean for food businesses

By putting a value on legitimate sales displaced by fraudulent products, the study gives businesses and policymakers a clearer way to weigh investment in prevention and enforcement against the commercial damage caused by food crime. That is particularly significant because undetected and unreported fraud makes the true scale of the problem difficult to quantify.

Commenting on the findings, Professor Chris Elliott, founder of the Institute for Global Food Security at Queen’s University Belfast, said: “This is a very important study and the methodology employed looks robust in terms of the data that is actually available. The estimates given are precisely that, given that fraud is inherently difficult to detect and much undoubtedly goes unreported. Indeed, I believe the figure could be far higher were it not for the excellent work of the Food Industry Intelligence Network (FIIN) and our very active National Food Crime Unit (NFCU).

“The potential return on investment of more than 400 percent from enforcement does provide a compelling case for continued investment, particularly in intelligence gathering, analytical capability, local enforcement and successful prosecutions. There is also no doubt that highly visible enforcement is a powerful deterrent.

“I don’t believe food crime is currently an attractive proposition within mainstream UK retail, where multiple layers of barriers have been put in place. However, huge vulnerabilities remain outside these highly controlled supply chains, particularly in less regulated markets, smaller businesses and online trading. Continued vigilance and investment are therefore essential.”

Where food fraud risks remain

Elliott’s warning points to an uneven risk landscape: mainstream retail may be relatively well protected, while smaller businesses, online trading and less regulated markets remain more exposed. That distinction matters as the UK’s approach to food crime enforcement evolves.

I don’t believe food crime is currently an attractive proposition within mainstream UK retail, where multiple layers of barriers have been put in place. However, huge vulnerabilities remain outside these highly controlled supply chains, particularly in less regulated markets, smaller businesses and online trading.

Continued vigilance and investment are therefore essential.”

Professor Chris Elliott, founder of the Institute for Global Food Security at Queen’s University Belfast

The study’s enforcement finding also lands amid a wider shift in the UK’s response to food crime. In the past 12 months, new powers for the National Food Crime Unit have strengthened its ability to investigate suspected offences, adding weight to the researchers’ argument that investment in enforcement can deliver economic as well as regulatory benefits.

By putting an evidence-based value on food fraud for the first time, the study gives policymakers and industry a clearer basis for deciding where prevention and enforcement resources could have the greatest impact. The researchers say the framework can also be refined as better data emerge, helping strengthen supply chains against organised food crime.