To complete a vulnerability assessment as part of BRC 7 there is a requirement to take into account economic factors which may make adulteration or substitution more attractive.
At first this can seem challenging, but your internal colleagues may already have access to useful information.
First stop should be your purchasing department to ask the following questions:
Are there any raw materials which have risen substantially in price recently?
If there are raw materials which have increased in price substantially you need to find out why. There may be benign reasons such as the price returning to a normal level after a slump in prices.
But other reasons to watch out for include:
- Poor harvests in the producing country that you source from where your raw material specifications and finished product specifications lists the country of origin.
- A large country such as China or India importing large volumes of the ingredient resulting in shortages.
- A large exporting country suspending exports due to local shortages or for political reasons.
Are there raw materials that suppliers are expressing concern about supply shortages?
Shortages may be a reality already or suppliers are suggesting that shortages may be on the horizon. Reasons could include:
- Reduced harvests in key producing areas
- Shift in supply and demand which is often finely balanced
- Weather conditions impacting growing conditions resulting in harvests that are better or worse than usual resulting in an imbalance in the availability of specific grades or specification of material
Are there geopolitical or economic risks in key producing regions for ingredients that you source?
Remember that we are looking for potential risks of adulteration or substitution so you need to go beyond the large volume and strategic ingredients that are often the primary consideration. Adulteration or substitution on a small volume non strategic ingredient could still present brand protection risks.
At the worst point in the Greek crisis could there have been risks of adulteration or substitution of greek raw materials either by greek suppliers desperate to stay afloat or by criminals looking to take advantage?
How could the current crisis in Syria and its neighbouring countries affect raw materials that are sourced from these regions or are transported through these regions?
To conclude, a detailed conversation with your purchasing colleagues over a cup of coffee could give you a vast amount of intelligence to inform your vulnerability assessment.