Co-op Grocers to Pilot Organic Fraud Protection Program

IOWA CITY, Iowa -- The National Cooperative Grocers Association (NCGA) said yesterday it was teaming with New Hampshire-based Hanover Co-op Food Stores, PCC Natural Markets in Seattle, and Unified Grocers, which provides food and services to independent grocers in the western United States, on a pilot program to investigate the introduction of what it calls the organic industry's first systemwide, retailer-based organic fraud detection and prevention program.

As part of this initiative, NCGA has contracted with the International Organic Accreditation Service (IOAS), a nonprofit organization that bestows accreditation on organic certification bodies worldwide, to determine appropriate methods retailers can undertake to limit the incidence of fraudulently traded organic products and to increase the chances of early detection when it takes place within the retail supply chain.

IOAS will soon conduct testing with NCGA grocers and suppliers. Based on the results of the pilot, NCGA and IOAS plan to develop a recommended retailer-based fraud prevention program, which they will provide not just to NCGA members, but also all organic retailers nationwide and around the world as soon as mid-2008.

"The organic market has grown, and so has the temptation for organic fraud," noted NCGA c.e.o. Robynn Shrader. "This may be the result of legitimate suppliers struggling to satisfy the needs of their customers or of other parties becoming aware of the opportunity for fraudulent financial gain. Our program will not change how organic products are certified. Rather, we're seeking to add a very critical safety checkpoint in the supply chain that will empower retailers and provide peace of mind for organic customers."

Added Ken Commins, executive director of IOAS' U.S. offices: "Safety measures our pilot program will explore can include elements such as unannounced visits to suppliers and residue testing on sample organic products. The idea is that such a program would be strong and effective without creating bureaucracy or incurring significant costs."

The pilot study will identify the most suitable auditing criteria to detect fraud, identify the party or parties most suitable to implement these measures, establish the nature of a system to oversee and ensure implementation at all levels, establish the costs of implementation and determine which parties incur the costs, determine how the program might allow all retailers to take part, and identify any other needs to ensure maximum fraud protection in the retail sector.

"Food co-ops have been leaders in the organic industry for decades; through education as well as providing shoppers with great-tasting organic food," said Shrader. "We value our consumer-owner's trust and will voluntarily put added measures in place to be sure we are providing the goods they believe they are buying."

NCGA is a business services cooperative for 110 consumer-owned food co-ops located throughout the United States.
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