The changing economics of food fraud

Vansteenkiste says: “In former days, we had fake champagne, vodka, Johnnie Walker whisky. What we see now is day-to-day consumer goods, [things like] tomato juice and orange juice. You wouldn’t expect it for a low-priced item like tomato juice — for God’s sake, why would they fake it? The answer is people don’t expect it to be cheated, and the profit is very low, but people drink more tomato juice than champagne.”

Tomato juice is usually adulterated by diluting a famous brand name with a cheaper product. Chocolate, coffee and cookies are also targets, says Vansteenkiste.

That is from an excellent Natalie Whittle feature article at the FT.

Comments

Anyone else noticing a growing trend to linking to paywalled sites here?

And please don't discuss how to get around them - I know, and this site seems incredibly disturbed by even the hint of the idea that information wants to be free.

(This citation being from a site where information is free - 'The iconic phrase is attributed to Stewart Brand,[1] who, in the late 1960s, founded the Whole Earth Catalog and argued that technology could be liberating rather than oppressing.[2] The earliest recorded occurrence of the expression was at the first Hackers Conference in 1984. Brand told Steve Wozniak:[3]

On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.[4]

Brand's conference remarks are transcribed in the Whole Earth Review (May 1985, p. 49) and a later form appears in his The Media Lab: Inventing the Future at MIT:[5]

Information Wants To Be Free. Information also wants to be expensive. ...That tension will not go away.[4]

According to historian Adrian Johns, the slogan expresses a view that had already been articulated in the mid-20th century by Norbert Wiener, Michael Polanyi and Arnold Plant, who advocated for the free communication of scientific knowledge, and specifically criticized the patent system.[6]

At the 2008 RSA Conference, Brand's original slogan was complemented by a pessimistic expectation of bug infestation in programming:

Information wants to be free, and code wants to be wrong.' https://en.wikipedia.org/wiki/Information_wants_to_be_free

Some serious discussions are possible, but calling free-with-registration a "paywall" might neglect some subtlety.

On the main topic, yes I am surprised that technology is being used to fake cheap things.

FT has a $0 subscription: limited articles per month but full access to blogs and Alphaville.

"growing trend to linking to paywalled sites here?"

'Growing Trend'? It's the financial times, a standard paper for anyone interested in economics, and this blog has been linking to articles from them for years.

The trend is that more outletes are establishing paywalls.

Probably right.

"If information were wealth, librarians would be the richest people on the planet", said by an unremembered futurist on BookTV years ago. A Consumers Reports is needed for many more aspects of living today. I concluded in the 1980s that "All life is risk management". As consumers, we're crash test dummies. Economists don't account for fraud, deception, false advertising, market manipulation, lying, theft and cons. They can't differentiate between wealth, credit worthiness, and debt repayment as renewal of credit rather than money destruction, and the wealth effect of easy credit, asset bubbles and busts. Borrowing that doesn't sustain or build wealth.

My girlfriend bought her son a $299 cotton hoodie. We started a serious discussion of care for such a crazy purchase, how often to wash, etc. when I read the care tag inside the thing. It said "do not wash. do not dry clean."

Our world.

Change girlfriends.

It is interesting from the Behavioral Economics angle. The kid gets into the cool "street wear," quotes a lot of high prices, and then an "anchoring effect" takes place. Suddenly $199 sneakers are the cheap ones.

The kid has learned that reselling isn't easy. His $299 shoes which "were worth" $650 hung at the consignment store too long. It became an educational lesson about his money being tied up in inventory. And that quoted market prices do not imply liquidity.

I agree. People with no money and/or no desire to give anything to others make for the best relationships.

I have actually never heard from anyone defending this point of view before. It's all "a spendthrift wife can carry more out the back door than her husband can carry in the front door". I guess it's good that there are men these women can marry without pissing them off.

Noumenon, first let's be clear about what happened here. Dearieme wrote something silly and I wrote something silly in return. There's not much to it beyond that.

But your reply seems to assume that husbands earn while wives spend, and I can't say that's my assumption. I come from a culture where it is generally assumed the romantic partners of men will have their own income and are free to spend it on dumb things such as $300 cotton hoodies. And coming from this culture has its advantages. For one thing I've never had to buy a date dinner here. And sure, fiscal recklessness is one reason to end a relationship with somebody, but we've only heard of one instance of fiscal idiocy in anon's case, and if one instance is reason enough to break up with someone then I'd be dumped the first time a date saw my car.

To a large extent, it's the brands themselves that do the countfeiting. They take a formerly good product and cheapen it, riding on the reputation of the old product. Campbell's Cream of . . . soups are a good example. I used to use their condensed Cream of Chicken soup to make a very simple creamed spinach recipe. It came out very well. But about 10 years ago they reformulated all of their Cream of . . . soups to replace most of the cream with vegetable oils. That crap doesn't work at all for my recipe. If I want to make it again, I have to look for a generic or store brand Cream of Chicken soup, because they are copies of the old Campbell's formula. My recipe works fine with them.

Another example would be the formerly American-made kitchen appliances now made in China under the same brand names. That was one of the strategies followed by Warren Buffet's companies -- buy up a brand with a good reputation, then close the U.S. plants and outsource to China.

"about 10 years ago they reformulated all of their Cream of . . . soups to replace most of the cream with vegetable oils. ... I have to look for a generic or store brand Cream of Chicken soup, because they are copies of the old Campbell’s formula." Thank you for that: my wife and I have taken note.

Maybe because food prices are high and they make this type of stuff profitable.

Everything else is being counterfeited, certification stamps on fittings, pipe, bolts, etc. Why not food?

Here in Southeast Asia, the land of counterfeit, they make fine distinctions between the different quality of counterfeit goods. There's "high quality" and "low quality" counterfeit, and you pay for the difference. The difference in quality is pretty noticeable, and what else is interesting is that the poor will bid up the price of the 'low quality' counterfeit a bit too high for my tastes. In other words, the difference in quality between low and high counterfeit is pretty noticeable, but the difference in price is not that extreme. Explanation: the poor, to save a peso or two, are willing to put up with really crappy counterfeit goods.

Like the Chinese saying goes (not heeded by the poor): buy expensive, cry once. Buy cheap, cry every day.

I can't believe what passes for juice in some quarters. Like, I'm amazed that more dont' get chased down for misleading advertising. Yes, if you check the fineprint, you find that there's 10-30% juice (really? 10-30%? like, they are so inconsistent that sometimes it's 10% and sometimes 30%?).

And then people give it to their kids thinking that juice is healthy, but it's mostly packed with glucose fructose and artificial sweeteners.

I had to visit several local grocery stores (China) before I could find one with 100% juice, although only in small bottles. I cleared them out of their stock that day. It took them over a month to respond, but there's now a whole selection of 100% juices, from grape, apple, pear, mango and organge, in addition to some high juice content berry juices. When I was asking staff "where's the juice", they would point me to stuff that wasn't juice - I'd say "that's not juice. I'm looking for juice. Do you have any 100% juice?" The staff wasn't even aware of such a concept. I wonder whether the store itself was not even aware that what they were selling as "juice" was not actually juice. The brand that they chose has the words "100%" larger than even the brand name on the packaging.

Nathan - if real juice is so important to you why don't you make your own? It's really easy and quick and much better than even the best bottled stuff which has to be pasteurised.

Even better just eat the fruit itself and drink water. Then you get all the benefits and the sugar absorption is much more gradual.

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