FSA News Item, 22 September 2009
Northamptonshire County Council Trading Standards, with the support of the Food Standards Agency, has successfully prosecuted One Foods Limited – the company behind an organic food scam worth more than half a million pounds.
The home delivery and wholesale business supplied a range of products falsely described as organic to consumers and businesses across the UK. The fraud took place over a five year period.
One Food Limited Director Neil Stansfield has received a 27 month prison sentence, while Company Secretary Kate Stansfield and Operations Manager Russell Hudson, both received suspended sentences and 150 hours of community work. All three pleaded guilty to selling conventionally grown food as organic.
Sarah Appleby, Head of Enforcement at the FSA, said: 'I am delighted that justice has been done. The FSA takes all food fraud very seriously and this is a perfect example of the FSA working closely with local authorities to stamp it out.'
The FSA has a range of resources available to help local authorities that suspect, or uncover, food fraud. These include the National Food Fraud Database and the Food Fraud Advisory Unit, which includes local enforcement officers with specific experience in tackling food fraud. One of Northamptonshire County Council’s Trading Standards Officers involved in this investigation is a member of the Food Fraud Advisory Unit. The Agency also has a ‘fighting fund’ that can be used, as in this investigation, to provide financial support to local authorities.
Northamptonshire County Council Press Release, 22 September 2009
The people behind a business responsible for a £500,000 organic food scam have been successfully prosecuted by Northamptonshire County Council trading standards today (Tuesday 22nd September).
The five-year scam saw various products that were falsely described as organic being supplied by One Food Limited to consumers and businesses across the UK.
At Northampton Crown Court today (22nd September), the following sentences were passed in relation to the defendants:
(All three defendants had pleaded guilty at an earlier hearing to knowingly being party to the carrying on of the business One Food Limited for a fraudulent purpose, namely purporting to sell organic products that in fact contained non organic ingredients - contrary to Section 993(1) of the Companies Act 2006.)
Councillor Andre Gonzalez de Savage, county council cabinet member for customers and communities said: "It is deeply ironic that the initials of this company - ONE - stood for organic, natural and ethical, when clearly the foods being supplied were anything but.
"The people behind ONE Food Limited have been responsible for ripping off both consumers and businesses alike and I am very pleased that trading standards have pursued this lengthy and often complicated investigation to achieve today’s result.
"People make a deliberate decision to choose organic food and have a right to know where their food has come from and what it's made of. The county council and trading standards are 100% committed to protecting consumers and businesses in Northamptonshire and will take action wherever possible to ensure that rogue trading of this type does not continue."
Background
The scam first came to light in autumn 2007, when trading standards received information that One Food Limited (OFL) in Daventry had been receiving regular deliveries of what were suspected to be non-organic ingredients.
Trading standards followed this up by purchasing items from OFL via the 'Swaddles Organic' website.
The website stated:
Welcome to Swaddles Organic! An extensive range of Organic, Natural and Ethical meat, produce and grocery items. Swaddles food is without compromise.
The business only sold organic food apart from game and sea fresh fish, both of which are not permitted to be described as organic. The business also ran a home delivery business called 'Swaddles Organic' (which they had acquired in 2006).
The test purchases included organic salmon which, following scientific testing, was shown to contain synthetic astaxanthin - an additive that is used in feed for farmed salmon to achieve a pink flesh colour and which should not be found in true organic salmon.
In December 2007 officers from trading standards and Northamptonshire Police visited the premises and seized OFL’s computers and large amounts of paperwork including numerous invoices which showed purchases of non-organic ingredients.
During the investigation carried out by trading standards, former employees of OFL stated that they were aware that the company directors were making regular purchases of non-organic ingredients from Tesco and Waitrose stores in Daventry.
They also stated that they were asked to remove non-organic ingredients, including Atora suet, from their original packaging and re-bag it in clear bags for use in products being made by OFL. This was done to prevent the original non-organic packaging being in the premises if an organic certification body or trading standards visited.
The investigation also found that non-organic chicken was logged against a code which would be recognised by OFL’s computer system as game. Game can never be categorised as organic so by doing this, it would make it highly unlikely that any ingredient classified as game would be more closely scrutinised by organic assessors.
Similarly, up to 50% of supplies were classified as non-stock items so that they were able to bypass the computer system without any record of the stock being moved in or out, effectively eliminating the paper trail in case of any inspection.
Following examination of the company's financial records by a forensic accountant, it has been calculated that in the final financial year of trading (to September 2007) at least 41% of the ingredients purchased by OFL to manufacture its so-called organic products was non-organic.
Examination of the company’s computers found that 28 fictitious invoices had been created to show a far higher amount of organic chicken being purchased than was actually the case.
Over the period of offending, approximately 28% of the ingredients purchased by the business were not organic. This equates to the business selling over £500,000 of product mis-described as organic, when the average profit margin is added.
The company went into liquidation on 11th March 2008.
Ends
Note to editors
About organic food accreditation
The word organic is one that is strictly defined by law, and may only be used by producers and manufacturers who are registered with a recognised organic accreditation organisation. In order to become registered, members must:
Organic certification mainly applies to food products at present. There are several organic certification bodies within the UK, all of which conform to the standards laid down by the EU
Note: Food Certification (Scotland) Ltd provides organic certification for farmed salmon in the UK. While UK regulations permit local certification, EC regulations do not yet address organic fish farming.