Study finds food fraud costs UK economy up to £2 billion annually

Food fraud may be costing the UK economy as much as £2 billion every year, according to a new study that provides the first estimate of the phenomenon’s full economic impact. Researchers at the University of Portsmouth calculate that deliberate deception in the food supply chain generates annual losses of between £400 million and £2 billion. The wide range reflects the difficulty of measuring a crime that is often hidden, dispersed across complex international supply networks and discovered only after products have reached businesses or consumers. Even at the lower end, however, the estimated cost places food fraud among the most expensive forms of economic crime affecting the country.

The study, published in the Journal of Economic Criminology, examines offences in which food or related documentation is deliberately misrepresented for financial gain. These include substituting a cheaper ingredient for a more valuable one, applying false labels, forging certificates and creating inaccurate records about a product’s origin, composition or quality. Such practices can occur at several points between production and sale, making responsibility difficult to trace. A product may pass through processors, brokers, wholesalers and retailers before reaching the public, while crucial information about its contents and provenance is repeatedly copied between paper and digital systems.

Rather than calculating the cost of isolated incidents, the researchers developed a method designed to measure the economic consequences of entire criminal operations. This approach is important because food fraud rarely operates like a single conventional theft. A fraudulent business may purchase lower-cost goods, alter documents, imitate a recognised regional identity and distribute the products through legitimate commercial channels. The resulting harm includes not only the value of the deception itself, but also lost sales for honest producers, investigative expenses, legal costs, disruption to supply chains and the long-term damage caused when consumers lose confidence in a category of food.

Approximately three-quarters of the estimated economic cost comes from the direct displacement of legitimate products by fraudulent alternatives. In practical terms, this occurs when a product is sold as something more valuable, more prestigious or more desirable than it really is. The study cites the marketing of smoked salmon as Scottish when it was sourced in Norway as an example of how geographic identity can be exploited. The fraudulent product may still be edible, but it competes unfairly with producers that meet the requirements associated with the label and invest in the reputation behind it. This displacement transfers revenue away from compliant businesses and distorts the signals on which food markets depend.

The economic damage can be accompanied by serious consequences for public health. Some forms of fraud alter a product’s identity without necessarily making it dangerous, while others introduce unsafe ingredients, undeclared allergens, toxic contaminants or unsuitable substitutes. Counterfeit alcoholic drinks, for example, have been found in some cases to contain industrial chemicals rather than ingredients suitable for human consumption. When a product is falsely described, consumers may also be unable to make informed decisions about allergies, dietary restrictions, religious requirements or medical conditions. The danger is therefore not limited to paying too much for an inferior product: the deception can remove the information needed to assess whether the product is safe to consume.

Food fraud is technically difficult to detect because modern food systems contain numerous transformations and transactions. Raw materials may be blended, processed, repackaged or transported across borders before they are sold. Testing can identify whether a sample contains an unexpected substance, but proving deliberate deception often requires additional evidence, including purchasing records, communications, financial transactions and supply-chain documentation. A fraudulent operation can also exploit the limitations of sampling. If only a small proportion of products is tested, a contaminated or substituted batch may evade detection, particularly when the goods are distributed through several channels. These characteristics make food fraud an economic crime as well as a food-safety problem.

Despite the scale of the estimated losses, the researchers suggest that food fraud remains comparatively uncommon in the UK when measured against other forms of fraud. The country’s food sector is protected by overlapping systems of assurance that include regulatory inspections, private audits, laboratory testing, supplier approval procedures, traceability requirements and certification schemes. These layers do not eliminate criminal activity, but they increase the number of opportunities for inconsistencies to be detected. Collaboration between regulators, manufacturers, retailers and certification bodies can make it more difficult for rogue traders to enter legitimate markets or maintain an operation over time.

Dr David Shepherd of the University of Portsmouth said the findings challenge the perception that food fraud is a niche issue affecting only specialist investigators. He argued that the crime undermines honest businesses, distorts markets and can put lives at risk, while a clearer estimate of its cost could help governments decide where enforcement and prevention resources would have the greatest effect. Professor Lisa Jack, from the university’s School of Accounting, Economics and Finance, said the strength of the UK’s existing controls was encouraging but warned that it should not lead to complacency. Maintaining confidence in the food supply requires continued investment as criminals adapt to new trading models, technologies and opportunities for concealment.

The study also points to a potentially strong economic case for enforcement. Based on the cases analysed, the researchers estimate that prosecutions can generate a return on investment of more than 400 per cent. This figure reflects the value of disrupted fraud, recovered losses and prevented harm compared with the cost of investigation and prosecution. It does not mean that every case will produce the same result, but it suggests that enforcement can function as a form of economic prevention rather than simply an expense. The researchers hope their framework will be refined as better data become available, allowing policymakers and industry to identify vulnerable points in supply chains and target measures that protect consumers, legitimate businesses and public health.

News Publication Date: 22 July 2026

Web References: University of Portsmouth; Journal of Economic Criminology; BBC News; New Food Magazine

References: https://doi.org/10.1016/j.jeconc.2026.100230