£300K fraud hits Neal’s Yard Dairy – what happened and how retailers can protect themselves?

As popular cheese company Neal’s Yard Dairy becomes a victim of fraud, John Hartley, Head of Business Crime and Regulation, has highlighted the pitfalls that led to the brand falling victim to the criminal offence – and how other retailers can make sure they don’t follow suit.

Neal’s Yard Dairy, a respected name in the cheese industry, recently fell victim to a sophisticated fraud scheme in which over 22 tonnes of premium cheddar, worth approximately £300,000, were supplied to a fake business. Reports suggest the cheese may have been quickly shipped out of the country, with scammers posing as agents for a French supermarket chain.

Only a week or so later, it was reported that an artisan smokehouse in Suffolk had fallen victim to an almost identical scam, losing £37,000 worth of stock – again to a business posing as an agent for a French supermarket.

John highlights how businesses within the luxury food product sector may be at an increased risk of such scams, and that proper due diligence of supplier relationships is more important than ever:

“Neal’s Yard Dairy’s case demonstrates that businesses, especially smaller ones, need to be vigilant, as those intent on committing fraud will expose any possible weakness. This is particularly true in industries that rely on goodwill and trusted relationships.

“With rising food prices and a potentially shrinking market for luxury food items, these kinds of elaborate scams are likely to increase as small businesses look to maximise their revenue.

“The tracing and recovery of luxury items is far harder than tracking funds in a bank account, and it may also be harder to claim a loss against an insurance policy if steps weren’t taken beforehand.

“Having in place a robust compliance and due diligence system, even for long established business relationships, can pay off in the long run – even if the business operates outside a regulated sector or compliance regime.

“Smaller businesses may hesitate to take these steps for fear of offending established customers, especially in the food industry, which is traditionally built on friendships and trust. However, in today’s climate, it may be worthwhile to take extra precautions to ensure your customer is who they claim to be.”

For more information about business regulation and fraud prevention best practices, contact John Hartley directly via john.hartley@primaslaw.co.uk