U. S. Food and Drug Administration
FDA Consumer
March - April 1999

Fake Food Fight

When it comes to fraudulent food in the marketplace, Lincoln's sage observation has certainly rung true. In the Food and Drug Administration's experience, when hucksters try to cheat Americans out of millions of dollars of genuine foods, their schemes are ultimately exposed--by a sharp-eyed consumer, a competitive industry, or FDA itself.

Known as economic adulteration of food, this practice involves using inferior, cheaper ingredients to cheat consumers and undercut the competition. And even though the 1938 Federal Food, Drug, and Cosmetic Act specifically bans it, economic adulteration persists, challenging FDA's resourcefulness to remain vigilant against it.

In recent years, FDA has sought and won convictions against companies and individuals engaged in making and selling bogus orange juice, apple juice, maple syrup, honey, cream, olive oil, and seafood.

According to Martin Stutsman, a consumer safety officer in FDA's Center for Food Safety and Applied Nutrition, FDA relies heavily on industry and consumers to help identify instances of economic fraud.

In addition, he says, FDA is helping to develop sophisticated laboratory tests and compiling computerized pictorial databases to help industry and consumers determine whether the products they buy are authentic.

Stutsman explains that while the agency has fewer resources to monitor the sale of fraudulent food products, it is working with states and local governments and industry and responding to consumer complaints to weed out such practices.

"It's not a major problem," says Allen Matthys, Ph.D., vice president of regulatory affairs for the National Food Processors Association, "but it is a problem. It's one of those things that keeps bothering you."

Economic food fraud involves substituting something of lesser value for something of higher value and then passing off the product as one of higher value--for example, adding coloring to trout and falsely calling it salmon (a more expensive product) or substituting corn syrup for orange juice concentrate (a more expensive ingredient) to make what will be falsely labeled 100-percent pure orange juice.

One of the earliest adulterants was water. "That's one reason FDA exists," says Ben Canas, a food adulterant chemist in FDA's Center for Food Safety and Applied Nutrition, alluding to the 1938 federal law, which was enacted partly in response to public concerns about use of water to adulterate such foods as milk.

Rarely do the adulterants present a health hazard. "This is an economic issue," Stutsman says, explaining that the practice cheats consumers out of their money.

"No one wants to pay for something they're not getting," says Robert Reeves, president of the Institute of Shortening and Edible Oils.

Also, cheaper adulterated products labeled as authentic undercut legitimate industry's prices, making it difficult for honest companies to compete in the marketplace and recoup the expenses they've incurred.

The primary motive in selling a fraudulent food is "greed," says Sandra Williams, a compliance officer in FDA's Detroit district office. "If you sell a product of a lesser value at a higher price, you'll make money."

According to FDA investigations, some companies and individuals have made hundreds of thousands, even millions, of dollars off of their fraudulent foods. The agency estimated that in one fraud case, a Midwestern orange juice manufacturer defrauded consumers of more than $45 million during an estimated 20-year period. Another orange juice company and its president netted $2 million in two years by substituting invert beet sugar for frozen orange juice concentrate. Still another orange juice manufacturer saw its earnings rise from zero in the company's second year of operation to $57 million in its fifth year before being convicted and sentenced for adulterating orange juice concentrate with liquid beet sugar. A family owned honey- and syrup-making business netted nearly $500,000 from its bogus products between 1993 and 1995.

FDA learns about most cases of economic food adulteration from industry members, who become suspicious of products being offered at prices below fair market value. Many companies also test incoming food ingredients in a laboratory to make sure they're getting what they ordered. When they're not, according to Reeves, word quickly gets around to other industry people and FDA.

In 1996, for example, manufacturers of apple juice products informed FDA of reports that an apple juice concentrate imported from Europe and widely used in the U.S. industry contained hydrolyzed inulin syrup in place of some of the apple juice concentrate. While the product, a high-fructose syrup, was not considered a health hazard, FDA, with industry, began random sampling of apple juice products nationwide to determine whether any products labeled as apple juice on the U.S. market contained hydrolyzed inulin syrup. FDA also tested hydrolyzed inulin syrup and pure apple juice to help verify the accuracy of laboratory tests developed for detecting this high-fructose syrup. According to FDA's Stutsman, these efforts facilitated the quick identification and voluntary removal of adulterated products from U.S. grocery shelves.

"It's the competitiveness of the industry," Reeves says. "Companies [that buy these foods from manufacturers] want to avoid [fraudulent] products. They don't want to lose their customers because once they do, they'll never get them back."

Savvy consumers occasionally alert FDA to possible food adulteration. A lengthy investigation of a Mississippi business selling phony pure honey and pure syrups stemmed in part from complaints FDA received from consumers about the products not tasting like the real thing.

Much of the work of identifying potential adulterants takes place in government and industry laboratories, where chemists use sophisticated tests like gas chromatography and mass spectrometry to identify unique markers that distinguish one substance from another--for example, to distinguish inulin syrup from natural apple sugars. Once a method for detecting an adulterant is verified by several other laboratories, it is published and made available to industry for in-house use. Occasionally, adulterants are identified microscopically.

Even with the tests, detecting an adulterant can be difficult because adulterators develop unique ways to concoct mixtures that closely resemble the real thing; for example, they might add chemicals that when tested, give the product the desired chemical profile of the natural product.

FDA's detective work also takes place in suspect companies' manufacturing facilities, where FDA investigators observe food production, storage and distribution practices for incongruities. For example, in one bogus orange juice case, an FDA investigator observed a company employee adding pulp wash, the residual orange pulp left after squeezing oranges to get juice, to a product that was to be labeled orange juice from concentrate. Pulp wash isn't permitted to be added to make orange juice.

In another inspection of a syrup company's operations, an FDA investigator identified a supply of "pure maple syrup" labels on the premises, even though he could not spot any raw maple syrup ingredients.

One orange juice company went so far as to hide its supply of an adulterant--liquid beet sugar--in a secret room and used pipes hidden in the ceiling to transport the sugar to the production area. The setup was so well hidden that FDA investigators were able to find it only after receiving explicit directions from a former-employee-turned-informant.

In some cases, FDA investigators have had to go undercover to document evidence of adulteration--for example, secretly observing the nighttime delivery of suspect adulterants.

FDA's efforts to stop a documented case of economic adulteration of food can range from issuing warning letters to seeking full-scale criminal prosecutions.

Evidence collected by FDA has enabled federal prosecutors to obtain hefty sentences for individuals and companies found guilty of food adulteration. For example:

• A $100,000 fine and five-year prison sentence for the former president and chief executive officer of an orange juice company that put more than 40 million gallons of adulterated orange juice on the U.S. market over 11 years.
• Fines and forfeitures totaling $120,000 for a seafood company and two of its principals for adding water to scallops to increase their net weight and thus net profit since scallops are priced according to weight.
• Fines of $20,000 each and prison terms of 19 months and 30 months for two Mississippi brothers for adulterating pure honey and pure maple, cane and sorghum syrups that they sold in old-fashioned tins at farmers' markets and produce stands around the country.
• A $2.18-million fine for an established baby food manufacturer for selling a product labeled "100 percent" apple juice but which actually contained only sugar, water and flavoring.
• While FDA hopes these kinds of sentences may discourage others from following suit, the agency is taking other steps to prevent and stop economic adulteration of food. Recognizing that products on the emerging herbal market may be prone to economic adulteration, FDA has begun compiling an authentic botanical database and teaching courses on identifying botanical substances. And because seafood is susceptible to species substitution, the agency is expanding its authentic seafood list, which contains pictures of various fish that can be used to identify authentic species. That list is available on FDA's Website at www.cfsan.fda.gov/~frf/rfe0.html.

FDA also is working with Canada and other foreign governments to prevent imported adulterated food denied entry in one country from being shipped to another. And the agency continues to work with industry to develop tests for identifying new adulterants because, as FDA's Canas says, "People are coming up with adulterants every day."

"It's not always easy," FDA's Stutsman says about detecting economic adulteration. "But it's FDA's job. We want to promote honesty and fair dealing in the interest of consumers--and industry."

Some Early Cases of Economic Adulteration

These earlier cases helped lead to passage of the 1938 Federal Food, Drug, and Cosmetic Act, which, among other things, specifically bars economic adulteration of food.

The Bureau of Chemistry in the U.S. Department of Agriculture--FDA's precursor--investigated reports that various makers of Eskimo Pie coatings were illegally substituting coconut oil and cottonseed sterine for the required cocoa butter and milk fat. One report claimed that the imitation coating, unlike the real coating, did not snap off when bitten into but instead would break in such a way that it allowed melting ice cream to leak out.

Two businesses dealing in adulterated olive oil were convicted and fined $300 and $200 in Federal Court of the Southern District of New York. It was the second conviction for one of the companies, which was fined $500 in 1922 for selling so-called pure olive oil adulterated with peanut oil.

Chicago police arrested two Chicago men following a complaint from New York bakers that the two men were making and selling a butter substitute for genuine butter. Their product was made by melting low-grade butter and lard and churning with buttermilk. The federal government seized 32 tubs of the product, and the case was turned over to the Internal Revenue Bureau of the U.S. Treasury Department.

The Bureau of Chemistry recorded the seizure of three shipments of ice cream cones sweetened with saccharin instead of sugar.

A San Francisco man was fined $40 for adulterating dried egg yolks with artificial color and skim milk powder. He imported the dried egg yolks from China, unpacked them and added the adulterants, and then repacked them in containers closely matching those in which they were imported.

An Atlanta company was fined $50 for selling so-called vanilla extract that contained insufficient vanilla but was artificially colored to make it look like real vanilla extract. It was sold to Army posts in Kansas, Nebraska and Oklahoma.

The now-named Food and Drug Administration recorded the seizure of 62 cases of sardines labeled as "packed in olive oil." This followed a factory inspection in which an inspector noted a number of drums of sesame oil but observed the sardine fillets going into containers labeled "Packed in olive oil." The inspector learned that the sardines were actually packed in a mixture of one-third sesame and two-thirds olive oil.

The Farmers' Equity Co-Operative Creamery Association Inc., of Nebraska pleaded guilty to shipping butter deficient in butterfat. This was the cooperative's second offense. The court imposed a $300 fine.

A complaint from the assistant to the quartermaster supply officer at Fort Sam Houston in Texas led to the seizure of more than 500 bottles of a product labeled "Vanilla Extract" but which contained artificial color and little, if any, true vanilla. FDA noted that "fortunately, [the product] had not been paid for."

Under the supervision of a state inspector, 60 cases of a product labeled tomato catsup were poured down a sewer after the catsup was found to consist chiefly of water, starch and cochineal (a red dye made from the dried bodies of female cochineal insects).