Research Reportocvp.org/HQRS2/Saad Haddi.pdf · 2017. 9. 5. · main act is called the Somaliland Quality Control Standardization Act, 68/2014. This act has been passed into law

Research Report

TITLE:

Understanding the factors which support the import of counterfeit foods

into Somaliland

Sa’ad Mohamoud Haddi

High Quality Research Support, Cohort 2 August, 2017 2

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Table of Contents

Introduction .................................................................................................................................................. 3

Research Methods ........................................................................................................................................ 5

Research Findings ......................................................................................................................................... 6

Academic Experts ...................................................................................................................................... 6

Food Importers Interview ......................................................................................................................... 9

Recommendations ...................................................................................................................................... 10

Acknowledgement ...................................................................................................................................... 11

Bibliography ................................................................................................................................................ 12

Appendix 1: Questionnaire ......................................................................................................................... 13


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Introduction

This research study explores the factors and motivations supporting the import of counterfeit foods into

Somaliland. Somaliland has poor local food production and it is heavily reliant on the import of

food items from abroad. Local companies import food items with minimum regulatory control,

there is an absence of national standards and a lack of enforcement of bills passed by the

Parliament of Somaliland. These factors have led to the lower quality of imported foodstuffs.

Since Somaliland was declared a de facto state, it has imported and sold thousands of tonnes of

counterfeit foods. The table below shows the import of dry food into Somaliland between2010-

2014

Yearly import of food items through Berbera port 2010-14 (Tonnes)

Sugar Rice W/Flour Wheat O.Beans C/Oil Pasta

2010 135,500 60,270 71,650 56,052 53,409 17,949 28,589

20 2011 94,956 86,827 71,511 20,500 4,506 17,656 34,998

2012 118,440 83,846 75,925 64,767 5,674 19,888 34,401

201 2013 115,929 79,822 82,519 11,656 1,997 13,125 28,717

201 2014 181,227 94,296 111,579 4,985 8,534 28,101 45,054 ,

Source: Somaliland in figures 2010-14, Ministry of National Planning and Development

The United Nations believes (TOCTA Report, 2010) that the massive growth of Chinese

manufacturing has been one of the key drivers of the twenty-first century global economy. The

manufacturing companies and the designers of the products live on different continents and

this, the report states, has fostered the growth of food counterfeiting.

Abel and Macarenhas (2016) argue that there is an increase in the frequency of counterfeit

goods in the marketplace and that counterfeiters are becoming more sophisticated in

committing fraud due to a number of factors including consumer complicity and weak national


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and international enforcement. It is likely that both of these factors contribute to the thousands

of tonnes of counterfeit foodstuffs which are imported into Somaliland each year.

According to the Organization for Economic Co-ordination and Development (OECD), (Vithlani,

1998) counterfeit foods not only affect the producers of genuine items, but they also involve

social costs and the victims are the consumers who receive poor-quality goods at an excessive

price and who are sometimes exposed to health and safety dangers. Furthermore,

Governments lose out on unpaid tax. The same OECD report estimates that trade in counterfeit

goods is now worth more than 5 per cent of world trade.

Between November 2015 and February 2016, Operation Opson V (Europol, 2016) seized more

than 10,000 tonnes and one million litres of hazardous fake food and drink in operations across

57 countries. It was a co-ordinated initiative by INTERPOL-Europol to protect public health and

safety. “It resulted in seizures ranging from nearly nine tonnes of counterfeit sugar

contaminated with fertilizer in Khartoum, Sudan to Italian officers recovering more than 85

tonnes of olives which had been ‘painted’ with copper sulphate solutions to enhance their

colour.”

The Somaliland public, then, are at risk of suffering health problems that can be caused by the

consumption of poor quality counterfeit foods. There are factors which are known to be

associated with counterfeit foods elsewhere in the world but it is not an area that has been

researched in Somaliland. There are no reliable statistics in Somaliland which show how many

people fall ill or die because of the consumption counterfeit foods.

This research seeks to begin to address the current gap in knowledge by identifying the laws

and regulations prohibiting the import of counterfeit foodstuffs into Somaliland, identifying the

economic factors which support the import of counterfeit foodstuffs in to Somaliland and to

better understand the motivations of those involved in failing to tackle the problem. It is hoped

that any new knowledge will help to change the regulations in the public interest.

.


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Research Methods

Methodology: this research used qualitative research methods. The respondents were selected

from companies involved in food imports, food science professors, and Government institutions

mandated to safeguard Somaliland public namely, the Somaliland Quality Control Commission,

Ministry of Commerce and Ministry of Health.

Methods of data collection: 10 semi-structured interviews were conducted. Four of the semi-

structured interviews were with food importers, three with food science professors and three

interviews were conducted with representatives from the three Government institutions. The

questions varied slightly according to the target group to take account of their different roles,

involvement and expertise.

No Interviewed Organization Number of interviews

1 University of Hargeisa 3

2 Food Importers 4

3 Somaliland Quality Control Commission 1

4 Ministry of Commerce 1

5 Ministry of Health 1

Total Interviews 10

All interviewees gave consent for their contributions to be used, including any direct quotes

and the researcher followed ‘do no harm’ principles. This research is not intended to be a

comprehensive study. It is limited to a very small sample and was conducted in a short

timescale with limited resources. It is intended to provide the basis for further research.


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Research Findings

The findings from the interviews are as follows:

Academic Experts

All of the Food Science lecturers at the University of Hargeisa believe that fake food is imported

into Somaliland and that it comes through any of the established entry points such as Berbera

port, Hargeisa international airport and any of the customs situated on the borderlines

between Somaliland, Ethiopia and Djibouti.

Whilst the University teaches a number of food-related topics across its courses, such as food

microbiology, food processing and preservation, food packaging technology, food technology

and food quality assurance, it does not specifically deal with the issue of counterfeit foods.

“Consumers may not be aware of the invisible threat which counterfeiting poses to their

personal safety, to society and to the economy.” (Risk, Nexus Counterfeit products: new risks in

global value chains, 2014)

Mohamed Bullo, Food Science lecturer of the University of Hargeisa, believes strongly that fake

foods cause human health risks such as cancer, diabetes, diarrhea, allergic reactions and can

even sometimes cause sudden death to consumers. There is evidence to support that this is

possible. For example, melamine-contaminated baby formula was identified as the cause of

sickness in an estimated 300,000 Chinese children, killing a reported 6 infants. Evidence now

suggests that safety risks associated with melamine-tainted feed date back to 2003, and that

melamine was first reported to be added to artificially increase protein content in feed as far

back as 1982. (Renée Johnson, 2014). Infant formula milk from China is amongst the imports

into Somaliland.

All of the Food Science lecturers agreed that a great number of business people are involved in

importing and merchandizing counterfeited foodstuffs and raised some their concerns:

Some business people do not report to Government institutions when their commodities expire.

They take commodities to a secret warehouse, then they change the manufacturing and expiry

date written on the containers. After that they remarket these fake commodities to the market.

(Ahmed Du’ale, Lecturer)


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Mohamed Yusuf from SQCC said:

When goods expire, business people must report to the Somaliland Quality Control Commission.

The Somaliland Quality Control commission has a Quality Assurance Office, which is responsible

for the collection and destruction of expired goods. QA officers take expired commodities to the

dump site, where they are burned and buried properly.

He was explained that many people to not follow this procedure.

Furthermore, the food science lecturers believe that little is known about the manufacturer of

the food items that the people of Somaliland consume.

This demonstrates that there is a very real concern about the risks of counterfeit foodstuffs

amongst food science experts. Equally there is agreement that more needs to be done to

properly dispose of expired foods and to tackle the root causes of the imports.

Government Interviews

Interviewed officers from the Somaliland Quality Control Commission, Ministry of Health and

Ministry of Trade believe that the sale of counterfeit foods is on a huge scale throughout

markets in Somaliland.

The Chief of Inspection of the Somaliland Quality Control Commission, Mohamed Yusuf said:

It is difficult to differentiate authentic foods from fake foods because the counterfeiters have

great experience in pretending that they are producing genuine products. Only manufacturers of

genuine product can recognize their products.

Mohamed Yusuf said:

When the Somaliland Quality Control Commission seizes fake food or even an expired

consignment, there are two options: 1. Destruction of the fake and/expired food; 2. Export the

fake and/or expired food to where it was imported.

With either option the bearer of commodity must pay all the costs associated with the

destruction or the costs to export the consignment to where it came from.

In practice, the NGO, business people or whoever is responsible normally agrees to pay for the

costs of destruction. The issue of re-export never normally happens although in theory it is an

open option to the bearers.

Institutions in charge of Quality Control do not have a food testing facility. One reason is that

the Government of Somaliland does not have the necessary budget to invest in consumer


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safeguarding projects such as QC testing facilities. A test facility is not attractive to private

investors because of the low returns.

Only the Somaliland Quality Control Commission has laws related to food counterfeits. This

main act is called the Somaliland Quality Control Standardization Act, 68/2014. This act has

been passed into law. It has two articles (38 and 39) which are concerned with counterfeiting

and penalties respectively. Article 38 says:

Counterfeit products are prohibited; it shall be an offence to produce and trade in counterfeit

goods and products. For the purpose of this act, patents, trademarks and copyrights recognized

by any foreign law shall enjoy protection notwithstanding the fact that they are not registered

in the country.

The second article state:

Any person who manufactures, trades, distributes, sells, supplies or imports a product that is

within the scope of a Somaliland Standard into the Republic of Somaliland, not complying with

the requirements of the Compulsory Standard shall be guilty of an offence and liable to a

fine and/or imprisonment to be determined by court of law.

The Government believes that two factors drive the high demand for counterfeit foods.

Counterfeit foods are lower priced relative to the genuine foods in the cities; therefore this

makes them attractive and affordable for the urban dwellers to buy even if they know they are

counterfeit. In rural areas, price is also a factor but there is less awareness that foods can be

faked or artificial ingredient can be added to foods that they normally buy and consume.

Government institutions know that food shortages exist in remote areas in the country and

believe it is worsening the level of consumption of fake foods in Somaliland. The desk review of

this research found that most companies that market their products internationally have

experienced some problems with counterfeiting and have formulated systematic anti-

counterfeiting policies. (The Economic Impact of Counterfeiting, Organisation for Economic Co-

operation and Development, 1998)

In Somaliland however there are no separate policies or manuals to deal with counterfeits, only

the one act passed by the parliament of Somaliland, which only refers to the issue in a couple of

clauses.

This research revealed that government institutions who are in charge of safeguarding

consumers from hazardous foodstuffs do not have testing facilities such as laboratories,

although there is standardization law monitored by the SQCC. Furthermore it is difficult to

differentiate fake foods from authentic foods unless sophisticated laboratory equipment is


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used. Technologies are increasingly employed in other parts of the world to protect and

authenticate products but they are very expensive.

Food Importers Interview

Food importers of Somaliland believe that only the biggest companies in Somaliland import

foodstuffs from genuine suppliers. Most companies import many different versions of specific

brands.

This research found that the companies which import foodstuffs into Somaliland do not insist

on internationally required certificates such as food safety certificates and food sanitary

certificates from the manufacturers of foodstuffs. Likewise government institutions do not ask

food importers to produce these important certificates. This situation is making it difficult to

differentiate counterfeited foods from real foods and allows the food importers to continue the

practice.

Some interviewees said that food importers in Somaliland take these certificates when they

want to take foods in to Ethiopia. Ethiopia has a strong standardization body called Quality and

Standards Authority of Ethiopia, which will not tolerate making any compromise to food

importers. It is compulsory to have all necessary certificates for foods, medicines and drinks.

This could show that it is possible for the Somaliland importers to adhere to these standards.

On the other hand, it may also mean that the counterfeit producers may have of the ability to

pass themselves of as legitimate businesses and use the proper channels of commerce to

distribute their products. (United Nations Office of Drugs and Crime, 2008)

Furthermore, interviewed food importers believe that there are many companies who falsify

food brands. These companies take authentic foods to china and within a couple of months the

counterfeited food brands arrive at any entry point into Somaliland. After one week these

falsified food brands are available to be consumed by the Somaliland public. The media are

starting to challenge the amount of counterfeit foods and are publishing stories such as ‘plastic

rice on sale’. It is difficult to know which stories are true, which are exaggerated and which are

not true. Either way, fake foods can be found in Somaliland market places and the problem of

fake foods is of growing public interest. What is also certain according to the food importers is

that the most expensive food comes from the US and Europe whilst the cheapest comes from

China.


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Conclusion

The objective this research was to identify the laws and regulations prohibiting the import of

counterfeit foodstuffs into Somaliland, to identify the economic factors which support the

import of counterfeit foodstuffs in to Somaliland and to assess the knowledge of the importers,

Government Ministries and academics about the concerns over counterfeit foods. The research

confirmed that Somaliland business people are involved in importing and merchandizing

counterfeit foodstuffs, though little is known about the food manufacturers abroad. The

research also found that as well as counterfeiting brands, some business people in Somaliland

counterfeit manufacture and expiry dates written on food labels extending their life beyond

what is considered safe. The prices of the same foodstuffs have different prices dependent on

which country produced it. The cheapest is from China and consumers prefer to buy the lowest

price foodstuffs.

Somaliland Quality Control Standardization act 68/2014 states that Counterfeit products are

prohibited yet little is being done to enforce it.

Government institutions are aware that food shortages which exists in remote areas can

increase consumption of fake foods in Somaliland but do not have the resources to address the

problem. Academics strongly believe that fake foods can cause health risks and food importers

are concerned that some companies are actively falsifying brands.

Recommendations

Each interview group was asked what should be done to address the problem of counterfeit

foods in Somaliland. All agreed that action was necessary. The food importers and the

government respondents both agreed that the current controls should be strengthened starting

at the point of entry into Somaliland where there should be much tighter checks.

Technologies are increasingly employed to protect and authenticate products. In the past, this

field was somewhat neglected partly because of the limited availability of suitable technologies

as well as the perception that the implementation of the technologies would not be cost-

effective. (The Economic Impact of Counterfeiting, Organisation for Economic Co-operation and

Development, 1998)

Food Science lecturers and food importer respondents agreed that Quality Control

Infrastructure must be invested by both Government and businesses, even if the technology is


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expensive. Equally, there is a need to develop the capacity of the SQCC which is currently very

weak. Competence and professional levels of SQCC staff must be increased.

Government Agencies and Ministries recommended launching an awareness campaign aimed

at the public to inform them of the health risks of some counterfeit foods. This, they say, would

also improve confidence between Government Institutions and the Somaliland public.

Food Science lecturers recommended that government institutions should develop national or

international standards, codes of practices and testing methods, in order to improve the quality

of consumer goods in general and foodstuffs in particular.

Finally, this research recommends that the problem of counterfeit foods in Somaliland must to

be researched further so that policy decisions to address this problem can be made.

Acknowledgement

I would like to extent my sincere thanks and appreciations to my Great Mentor; Sandra

Mcneil, for her supervision, Guidance, Teaching and Commitment. I would not produce this

research paper without my Great Mentor.

Also I would like to thank to HQRS Cohort 2 supporting Organizations such as University of

Bristol, OCVP and Transparency Solutions in general.


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Bibliography Abel, S. and Mascarenhas, E. Counterfeit Foods, Illegally Labelled and Grey Market Goods: is

your brand protected?, [Online] Available from: http://globalfoodsafetyresource.com/grey-markets-products/ [Accessed: 1st August 2017]

Counterfeit Products (No date). [Online] Available from: www.unodc.org/documents/data-and-analysis/tocta/8.Counterfeit_products.pdf [Accessed: 1st August 2017]

Europol and Eurojust, 2016. Counterfeiting of foodstuffs, beverages and agricultural products,

Executive Summery, European Intellectual Property Office. [Online] Available from:

https://euipo.europa.eu/tunnel-web/secure/.../Counterfeiting_of_foodstuff_en.pdf

[Accessed: 1st August 2017]

Europol, 2016 Largest-ever seizures of fake food and drink in INTERPOL-Europol operation, (March 2016). Press Release Europol. [Online] Available from: www.europol.europa.eu/newsroom/news/largest-ever-seizures-of-fake-food-and-drink-in-interpol-europol-operation [Accessed: 1st August 2017]

Johnson, R. 2014. Food Fraud and “Economically Motivated Adulteration” of Food and Food Ingredients [Online] Available from: https://fas.org/sgp/crs/misc/R43358.pdf [Accessed: 1st August 2017]

Ministry for Economic Development, Department for Enterprise and Internationalisation, The counterfeiting in the food sector, Consumer Guide, (No Date). General Anti-Counterfeiting Directorate. [Online] Available from: www.uibm.gov.it/attachments/no_to_fake_food.pdf [Accessed: 1st August 2017]

Ministry of National Planning and Development, Somaliland in figures 2010-14.

OECD 2016. Trade in Counterfeit and Pirated Goods, mapping the economic impact. [Online] Available from: www.oecd.org/gov/risk/trade-in-counterfeit-and-pirated-goods-9789264252653-en.htm [Accessed: 1st August 2017]

Quality and Standards Authority of Ethiopia, [Online] Available from: www.ethiomarket.com/qsae/ [Accessed: 1st August 2017]

Somaliland Quality Control Standardization Act, 68/2014. UN. 2017. Outlook for developing country economies highly dependent on agricultural trade,

Food and Agriculture Divisions of the United Nations. [Online] Available from: www.fao.org/docrep/v6800e/V6800E05.htm# [Accessed: 1st August 2017]

Vithlani, H. 1998. The Economic Impact of Counterfeiting, Organisation for Economic Co-

operation and Development [Online] Available from:

www.oecd.org/industry/ind/2090589.pdf [Accessed: 1st August 2017]

Vithlani, H. The Economic Impact of Counterfeiting, The ICC Counterfeiting Intelligence Bureau, OECD. pp, 4. [Online] Available from: http://hadhwanaagnews.ca/detail.aspx?id=204581 [Accessed: 1st August 2017]

http://globalfoodsafetyresource.com/grey-markets-products/http://www.unodc.org/documents/data-and-analysis/tocta/8.Counterfeit_products.pdfhttp://www.unodc.org/documents/data-and-analysis/tocta/8.Counterfeit_products.pdfhttps://fas.org/sgp/crs/misc/R43358.pdfhttp://www.oecd.org/gov/risk/trade-in-counterfeit-and-pirated-goods-9789264252653-en.htmhttp://www.oecd.org/gov/risk/trade-in-counterfeit-and-pirated-goods-9789264252653-en.htmhttp://www.ethiomarket.com/qsae/http://www.fao.org/docrep/v6800e/V6800E05.htmhttp://hadhwanaagnews.ca/detail.aspx?id=204581


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Appendix 1: Questionnaire

Understanding the factors which support the import of counterfeit foods into

Somaliland?

These questions will be used for primary data collection of this research. This research is

conducting 10 key informant interviews on different target groups. 4 interviews on food

importers, 3 interview on food science professors and 3 interviews on concern

Government ministries and/or agencies.

Questions for Food Importers

1. Do you import the foodstuff your company sells?

2. When you are buying these foodstuffs from the abroad, do you purchase foodstuffs

from the

a) Wholesalers/producing company

b) Distributors

c) Retailers

d) Other ….(Specify)

3. When you are importing foodstuffs, do you obtain the required certificates such as

food safety certificate, Sanitary Certificate etc?

4. Do you have specific foodstuff brands only your company imports?

5. If yes, have you ever seen your specific foodstuff brands being counterfeited by

other companies or competitors?

6. If your brands have been counterfeited, how did you react?

7. Do you think some business people are involving import of food counterfeits?

8. Can you tell me, some of specific food brands available markets of Somaliland, which

are counterfeits?

9. Do the prices of genuine food brands and fake food brands differ?

10. How do the lack of regulations or poor enforcement of laws motivate the import of

fake foods?

11. Do you have any solutions that can help to combat fake foods?

Question of Food Science lecturers


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1. Do you think that fake foods are imported into Somaliland?

2. Your university offers food science courses; do you offer particular courses

concerned with counterfeit foods?

3. Do you think the consumption of fake food can cause human health risks? Please

give examples

4. Do you think some business people are involving import of food counterfeits?

5. Do you have any solution that can combat fake foods?

Question of Government

1. To what extent do you think counterfeit foods are sold in markets in Somaliland?

2. Are there visual ways that you can differentiate fake foods from genuine foods?

3. Do you have testing facilities such as food laboratories?

4. If you meet or capture a consignment of fake foods in any entry point, what do you

do?

5. Does your Ministry/agency have laws or regulation prohibiting the import of

counterfeit foods into Somaliland?

6. Do you believe that counterfeit foods have local demand?

7. If yes, why do counterfeits foods have local demand?

8. Does your ministry/agency have any policies such as food policy or anti-counterfeit

policy for combating fake foods?

9. Do you have any solution to combat counterfeit foods?

Documents

Research Reportocvp.org/HQRS2/Saad Haddi.pdf · 2017. 9. 5. · main act is called the Somaliland Quality Control Standardization Act, 68/2014. This act has been passed into law