Avendra has been dedicating an increasing amount of attention to the issue of seafood fraud. Seafood fraud can take many forms, but one of the most rampant issues is mislabeling. Currently, only 2% of seafood imports in the United States and only 5% of Canadian imported seafood undergoes inspection before it's sent off to distributors. The high level of consequences, spanning from economic pitfalls to those centering around the health and safety of consumers, has prompted Avendra to take proactive measures to ensure that the seafood that reaches its customers is safe and correctly labeled.
Currently, Avendra contracts with approximately 40 regional seafood distributors across North America. We are committed to ensuring that our customers receive the best possible value, and that means ensuring they're getting the right product. We asked Cory Dellinger, our strategic contracting manager for seafood, for his insight pertaining to seafood fraud as well as some information on the steps we are taking to address the problem.
Q: What is seafood fraud?
A: Seafood fraud can occur in many different forms, but the big issue in the seafood industry today is a term called "bait and switch." Bait and switch is a practice where seafood is intentionally mislabeled. Basically, a processor or a distributor will substitute a cheaper, more available species for a more expensive one. A good example of this is wild salmon versus farmed Atlantic salmon - these two products look alike, but the cost differences can be quite substantial - sometimes as much as 65% per pound.
Q: Why is "bait and switch" an issue?
A: There are several reasons why this can be an issue. First is simply that the customer ends up paying for something they did not order. In addition, restaurants and chefs could be promoting sustainable or natural items such as wild salmon, but when bait and switch occurs, the products they end up with are not in line with their sustainable objectives. Another hazard relates to health concerns such as allergies. When a customer orders a certain species from a menu and gets another species in its place, it presents a very real opportunity for a dangerous situation that could potentially harm the consumer.
Q: What are some examples of commonly mislabeled seafood?
A: Apart from the Atlantic salmon example, grouper is another high-demand fish that is often mislabeled and substituted with either catfish, tilapia, pollock or ocean perch. The differences in cost can be significant - sometimes as much as 65% per pound. Another common bait and switch example, particularly with fresh seafood, is Atlantic cod, which is often substituted with other species such as pollock or escolar - the cost difference can be up to 35% per pound.
Q: How often does this mislabeling occur?
A: Recent studies indicate that as much as one-third of all seafood in the United States is currently being mislabeled, and this includes both fresh and frozen cuts. If you look at the historical profit margins on seafood, they're not that high. There's a lot of temptation there for the processors and distributors, and at the end of the day, there's really no system of checks and balances in place to regulate seafood.
Q: What is the government doing to regulate the seafood industry?
A: Unfortunately, the government has its hands full. As much as 80% of seafood consumed in the U.S. is imported, and only about 2% is inspected by any sort of regulatory agency.
Unlike the regulations around beef, which is inspected by the USDA, seafood doesn't have a single agency responsible for regulation. The FDA checks the safety and ensures proper handling of the seafood, but the practice of falsely labeling seafood doesn't fall neatly into the FDA's jurisdiction. U.S. Customs scans all seafood entering the country, but their main concern centers around radiation or other unsafe materials, not the accuracy of the labels. That's part of what prompted Avendra to be proactive about testing our suppliers' seafood.
Q: What is Avendra doing to protect customers?
A: Avendra’s goal is to provide procurement solutions that not only reduce costs, but also improve safety and transparency within the supply chain. To address seafood safety, we talk directly to our distributors to find out where the seafood is coming from and we perform surprise audits to ensure products are correctly labeled. We're raising the bar on our contracted suppliers and distributors.
Our proactive approach starts with our Quality Assurance (QA) team, who regularly visit the distributors to examine ways in which seafood is coming into distribution. They document things such as receiving logs and product tags to ensure that the fish coming in is legal and safe. More recently, we've started enacting DNA testing in order to ensure that seafood purchased by Avendra customers is accurately represented. Our QA team collects 1-ounce random samples from the orders that come into our customer units and sends them to an independent lab for analysis. The lab performs DNA tests on the samples and reports the results. All in all, this makes sure that the seafood being delivered to our customers' matches what they've ordered and been invoiced for.
Seafood is traded on a world market, and there are currently 1,700 different species available for sale in the United States. Currently, DNA testing is the only way to know for sure that customers are getting the right products. Through our Quality Assurance initiative and comprehensive auditing programs, Avendra continues to take steps to ensure that our customers are getting the high-quality products they expect.
Find out more about what Avendra can do for you. Fill out an information request form today.