Friday Rant: From the Annals of Supply Chain Risk — A Case of Bait and Switch

Spend Matters welcomes a guest post from long-time contributor, Sherry R. Gordon.

Some excellent investigative reporting by The Boston Globe recently unveiled a new supply chain risk. The fish that Massachusetts residents have been eating is often not what it is supposed to be -- a real case of bait and switch. Apparently, some local restaurants have been serving what diners thought was local, fresh-caught cod turned that out to be frozen Pacific cod. Other restaurants were serving, for example, escolar billed as white tuna; farmed tilapia, ocean perch and sea bream for red snapper; and farmed white bass for wild striped bass. Among the violators were many sushi restaurants, including highly regarded and expensive ones.

This report made me glad that I decided to cough up the bucks to pay for the Boston Globe's new online newspaper that helps support such investigative reporting, but also gave me pause that fish fraud could hit so close to home in an area known for its excellent local fish. The Globe had DNA testing done in order to be certain of the exact species of fish being sold. All of the fraudulent fish being substituted for more desirable species were significantly cheaper. The case of escolar being substituted for white tuna is the most troubling, since escolar causes severe gastrointestinal distress in some people.

Guess who took the blame for the fraud? Many of the restaurant owners, when questioned, blamed their suppliers -- current suppliers, former suppliers, and sushi outsourcing companies. Some fessed up and blamed clerical errors. Yet, there were still many restaurants and supermarkets (including WalMart and Whole Foods) who had correctly labeled their seafood. On the one hand, one wonders why so many establishments were not savvier about the fish they were buying. Tilapia, for example, is white and looks nothing like the much darker red snapper. Many just trusted their suppliers. How many of the establishments were complicit in this deception is hard to know. But half the fish that was tested for this investigation was not the species it was supposed to be. The mislabeled fish in this study was traced to just a few distributors. And according to the restaurateurs and restaurant employees, some distributors overtly encourage the misrepresentation. They suggest cheaper alternatives to expensive species and even suggested what to call them on the menu to make them appealing.

Short of bringing your own DNA testing kit to dinner, what can a consumer do? Most current seafood testing is focused on food safety, not on economic fraud. Very few states test fish to make sure that it is exactly the species it's supposed to be. Florida does, and levies fines to restaurants selling mislabeled species. But according to the Globe, 86% of the seafood that most Americans consume is imported. Of that fish, the FDA examines about 2% of it, but not for economic fraud.

Now that this information has come to light, Massachusetts consumers can question restaurants about suspected menu items or not patronize the restaurants and stores caught switching fish. But actually preventing the fraud in an international distribution chain is more challenging. It leaves authorities with the job of more inspections rather than a preventive approach. And the resources to do that on an effective scale are not available.

One organization, Trace and Trust, has been trying to help verify fish caught through a system of photos from the boat and QR codes with IDs that diners can scan at the restaurant to see the exact fish species they are eating and when and where it was caught. Other restaurateurs try to buy fish as close to the fishing boat as possible.

As in many foods in our global supply chain, casting your net for local sources may be more verifiable than from an international food supply chain. But even then, as shown by many local restaurants and stores caught up in this fraud, buying local is no guarantee. Even the restaurants you thought you trusted may be involved in this problem.

- Sherry R. Gordon

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