Amanda M. Naaum, Postdoctoral Fellow University of Guelph Biodiversity Institute of Ontario and Centre for Biodiversity Genomics, demonstrates the process for subsampling tissue commercially bought fish for DNA testing on July 11 2016. Fred Lum/The Globe and Mail

A few years ago, federal food inspectors were walking around the warehouses of the Ontario Food Terminal in Toronto – the nerve centre where much of the province's fresh produce is bought, re-packaged and sold – when they noticed something unusual.

In the "farmer's market" area, where only Ontario-grown produce is meant to be sold, the inspectors saw large cartons of greenhouse peppers with conflicting labels. The outside of the boxes had "Product of Canada" stickers, next to visible signs of damage on the cardboard – bits of paper and glue, as if another sticker had been peeled off. And stickers on the inside of the box read "Product of Mexico."

That discovery in January, 2012, led the Canadian Food Inspection Agency into a three-year investigation of the company behind the peppers, Mucci Farms – the largest such probe in the agency's history.

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After executing three search warrants at the company's headquarters in Kingsville, Ont., and poring over its computer records and internal e-mails, CFIA investigators pieced together evidence that, between late 2011 and early 2013, Mucci had been selling imported products as Canadian – putting hundreds of shipments of mislabelled produce worth more than $1.4-million onto Ontario grocery store shelves.

In one e-mail described in a court document and obtained by The Globe and Mail, one of the company's directors, Danny Mucci, responded to a message from an employee about a shortage of Canadian mini cucumbers by telling the worker: "you know what to do to fill…it's only 30 cases."

Mucci International Marketing Inc., Mucci Pac Ltd. and two of its directors (Mr. Mucci and Joseph Spano) pleaded guilty in June of this year to eight regulatory offences – including one count against the company for selling food in a "false, misleading or deceptive" manner – and were fined $1.5-million.

Mucci's lawyer, Patrick Ducharme, said in an interview that the mislabelling was not intentional, and that, given the volume of Mucci's 1,200-employee operation, the transactions made up "a very small part of what they do." He also emphasized that they pleaded guilty to regulatory offences, not criminal ones. Criminal charges against Mucci International and Mucci Pac and the two directors of defrauding the public, and defrauding Costco, Loblaw and Sobeys – to whom Mucci sold the produce – were withdrawn.

The case sent shockwaves through the country's agriculture industry, and the Ontario Greenhouse Vegetable Growers called it a "unique" precedent. "My hope is that it's an isolated case," the marketing board's manager, Rick Seguin, said in an interview.

By almost all accounts, it is not. Although just how widespread it is remains unclear.

For years, experts have been sounding the alarm on mislabelling and food fraud. Increasingly, they say, criminal organizations around the world are targeting the food system, intercepting supply chains and deliberately misrepresenting or adulterating products – and costing the food industry between $10-billion and $15-billion (U.S.) each year, according to the U.S.-based Grocery Manufacturers Association.

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And, according to conversations with experts in the Canadian food industry, scientists and regulators, the problem is widespread within our own borders.

For the food industry, fraud is the elephant in the room If you think Canadian food is immune to fraudulent labelling, think again says Sylvain Charlebois, a professor at the Food Institute at the University of Guelph

But even the CFIA does not seem to know just how widespread it is. Individual cases provide an incomplete picture. And the 74 cases of non-compliance with labelling laws from the past year published on the CFIA website – a number the agency say has held steady over the past five years – present only a portion of incidents where the agency has found companies breaking the rules. It includes only the cases in which the products were actually seized and detained or disposed of, but also includes technical infractions, like language or font size on packaging.

When asked how prevalent the problem is in Canada, the agency cited U.S. data that show fraud affects about 10 per cent of all food products globally. It also acknowledged it has not yet conducted a widespread survey of its own to understand its full impact within Canada.

Which raises the question: How do you fight a problem you don't yet understand?

The Centre for Biodiversity Genomics operates a lab where they’ve created a system of “barcoding” different species of fish. This gives scientists and regulators like the Canadian Food Inspection Agency a way of more easily determining what fish is being sold at grocery stores or restaurants are and for investigating possible cases of fraud. Fred Lum/The Globe and Mail

Action and reaction

In his years as a lawyer representing companies in intellectual property and anti-counterfeiting cases in Canada, Lorne Lipkus has seen cases of food fraud ranging from counterfeit basmati rice (knockoffs of a high-end brand) to fake ginseng.

"You'd think: 'How expensive is it to grow a bag of rice,'" he said. "But if someone's making something and making a profit out of it, somebody's counterfeiting it."

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The term "food fraud" can include simple mislabelling (inaccurate country of origin, a modified expiration date or false claims like "organic"), product substitutions (selling a cheaper species of meat or fish as a more expensive one), or counterfeits of brands. And, because food often goes through several hands and countries to reach grocery stores in Canada, retailers sometimes have no idea it is mislabelled.

10 The percentage of all commercially sold food products globally that have likely been subject of fraud. (Grocery Manufacturers Association) 300,000 The estimated number of children who were sickened from the melamine-tainted milk scandal in China in 2008 40 The average number of complaints the CFIA receives each year about possible misrepresentations of food (Canadian Food Inspection Agency) 1 Olive oil’s ranking on a European Parliament Top 10 list for food products most at risk for fraud. (European Parliament) 37 The percentage of frozen beef burgers in Ireland found to contain horse DNA in a 2013 study. (Food Safety Authority of Ireland)

Mr. Lipkus' interest is the counterfeits of brand-name products. And he said the response he has seen in Canada has lagged behind those of other countries.



"Everything we do in Canada is reactive," he said. "We have very poor laws, compared to other countries. And we haven't had any government involved in the longest time – I'm talking decades – willing to provide the resources to law enforcement to do anything about counterfeiting."

In EU countries, border officials have the authority to seize and destroy goods they believe are counterfeit. In Canada, customs officials can detain a product, but it is then incumbent on the complainant to undertake court action and to pay for the goods to remain in detention until the case is heard – which can cost in the tens of thousands of dollars.

Most alarming, he said, is that the scope of the problem is not understood because no agency is specifically looking for fraud.

On the issue of mislabelling, experts also point to policy initiatives abroad – such as a U.S. proposal to require companies to have food fraud prevention programs – as evidence others seem to take the issue more seriously.

Although the CFIA has not conducted a full survey of the issue in Canada, James Crawford, acting associate vice-president of operations with the federal agency, said CFIA receives about 40 complaints a year about possible food misrepresentation.

In an interview, Mr. Crawford said the agency takes food fraud seriously. He also said Canadians are generally safe from adulterated food – pointing to a Conference Board of Canada study in 2014 that ranked the country's food system as the safest of 17 OECD countries surveyed. On fraud, he said, "we're proactive and reactive."

He said CFIA staff conduct regular inspections of imported and domestic food – including daily inspections at meat processing plants. Still, he was not able to say what percentage of products undergoes such scrutiny for labelling.

"We can't inspect every … import or domestically produced food in Canada. It's impossible. That's why we have a risk-based plan. And it allows us to focus on where we think the high risks are." Some of the things the agency takes into account in prioritizing inspections include food type and likelihood for illness, and each company's track record of compliance.

Even countries with the most aggressive approaches faced the reality that food fraud is not easily confined by borders.

In March, Interpol and Europol announced the largest-ever seizure of fraudulent food.

The investigation, dubbed Operation Opson V, found almost nine tonnes of sugar laced with fertilizer in Sudan (counterfeit of a well-known brand), more than 85 tonnes of olives in Italy "painted" with a copper sulphate solution to enhance the colour, three factories in Greece each producing thousands of bottles of counterfeit brand-name alcohol, and in Zambia, "modified" expiration dates on cartons of diet powder drinks.

Since the tainted-milk scandal in 2008 in China that killed six babies, and the 2013 horse meat scandal in Europe, regulators and law enforcement agencies – particularly in Europe and the United States – have stepped up enforcement. Interpol is in its fifth year of working with Europol to co-ordinate such crackdowns, which have increased from just 10 countries in 2011 to nearly 60 this year.

To date, Canada has not participated in Opson (named for a category of food in Greek). And, unlike countries such as the U.K., Canada does not have a dedicated food crimes unit, through either the RCMP or CFIA.

"How is a consumer in Canada affected? They're affected like everyone else – by the globalization of this type of fraud," Michael Ellis, head of Interpol's Trafficking in Illicit Goods and Counterfeiting unit, said in an interview. As food supply chains become increasingly opaque and globalized, the risk of fraud increases.

"Once you look under the stone, you realize the food fraud is not – as with many of the crimes we deal with – they're not single-country issues," Mr. Ellis said.

One of the worst examples he has seen involved baby food being mixed with cement and chalk dust.

In Canada, much of the action on the issue has been industry-led. Large retailers in Canada like Loblaw or Costco have programs to safeguard against adulterations, requiring suppliers to subscribe to standardized food safety programs, and undergo annual audits.

Andrew Clarke, the director of food services at SGS Canada Inc. – which conducts audits for Costco – said his company provides this service for hundreds of firms in Canada, and that fraud is an area of growing concern for clients.

These programs are first and foremost focused on the safety of food products, he said, but increasingly look at quality. SGS, for example, will test the purity of olive oil on behalf of clients to make sure it is actually olive oil and not just green dye in some other type of oil.

"There's a lot more rigour and integrity checks going into food safety audits than ever before, and the demands are higher than ever before," he said.

In the meantime, Mr. Clarke said, consumers should educate themselves on which products are most frequently subject of fraud – foods like olive oil or manuka honey – and ask questions when buying them.

"I won't point the finger at certain products and say 'That's a risk, that's a risk,' Mr. Clarke said. "I'm saying you can consume it, but it might not be what you paid for."

Dr. Amanda Naaum, who is part of a team of researchers at Guelph University, uses tweezers to place pieces of a fish fillet into a tube to test the DNA and help identify the fish species. Fred Lum/The Globe and Mail

The DNA detectives

On the second floor of the University of Guelph's Centre for Biodiversity Genomics building, behind a door marked "lab for cryptic diversity," researchers are working to help ensure that people do get what they paid for.

One recent afternoon, Amanda Naaum wielded tweezers with one hand, and tiny scissors with the other. She carefully cut pieces of flesh about the size of a pencil tip off a fish fillet and placed them in clear plastic tubes.

Dr. Naaum is part of a team at Guelph of experts on DNA barcoding – an innovation developed in 2003 at the university to allow researchers to use DNA to identify species. Using the fish sample, Dr. Naaum will extract DNA, "read" its sequence and compare it to an existing database to determine what it is.

In recent years, researchers like Dr. Naaum have used the technology on seafood and other foods, like ground meat, in hopes of giving regulators and the food industry a powerful new tool against food fraud.

Robert Hanner, who runs Guelph's DNA barcoding program for fish, landed on the issue of fraud mostly by accident. Between 2006 and 2007, he was testing the DNA barcoding technology on dozens of filets of fish from restaurants and grocery stores in Toronto and New York, and finding almost one-quarter of the samples were mislabelled.

Over the next 10 years, Dr. Hanner performed similar tests with up to hundreds of samples of fish from across Canada, finding between 25 per cent and about 40 per cent mislabelled.

Among the most common substitutions were tilapia sold as red snapper, basa (a type of catfish) as cod, and farmed Atlantic salmon as wild Pacific. Such mislabelling can pose health risks, like when escolar (which can cause an orange, oily diarrhea if eaten in more than small quantities) is sold as white tuna. In the United States, people have been hospitalized after eating what they thought was monkfish, but turned out to be the toxic pufferfish.

Dr. Hanner said that if the substitutions were accidental, "once in a while we'd get the expensive stuff instead of the cheaper stuff," he said. "But the fact is, the overwhelming majority of the data are always in the other direction, suggesting it is economically motivated fraud."

In Europe, he said, regulators have had success combining stricter enforcement and consumer education. They have also made it mandatory for products to have their scientific names on the package to reduce confusion in cases where the same common name is used for more than one species (such as "sole," which can refer to 20-odd kinds of fish in Canada). All of this, he said, has reduced the rate of fraud for certain species from more than 20 per cent to just five.

In January, the CFIA announced a partnership with Guelph to invest more than $300,000 to help Dr. Hanner and his group develop tools that make it quicker and cheaper to identify species – the DNA sequencing currently takes several days and costs hundreds of dollars per sample.

As for Mucci, it is on a three-year probation during which CFIA inspectors will have free access to its premises and computer records. Mr. Ducharme says the company is doing everything it can to ensure accuracy of its labelling, including appointing a compliance officer and reviewing all of its processes.

He believes the CFIA targeted Mucci in part to set an example. "I don't think it's insignificant that the place that was targeted for the big investigation was the biggest in the industry," he said. "They know Mucci's the biggest. The best."

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