Seafood fraud: A fishy business that's on the rise

Americans are increasingly concerned about where and how their food is grown and harvested. Yet many may not be aware that one type of food carries a high rate of fraud: seafood.

One in five of more than 25,000 seafood samples tested in studies across the globe have been found to be mislabeled, according to a report from the ocean conservation group Oceana. In most cases, the mislabeling involved a cheaper fish passed off as a more expensive type, which means consumers are overpaying in stores and restaurants.

The problem of mislabeling is serious on a number of fronts, Oceana said. Aside from the loss to consumers’ wallets, mislabeling can lead to serious health problems. Almost six in 10 of the mislabeled samples were fish that posed species-specific health risks to consumers, including toxins and environmental chemicals such as mercury.

“Safe food choices absolutely depend on accurate fish labeling that says what fish it was and where it was caught,” said Kimberly Warner, one of the authors of the report and senior scientist at Oceana. While some perpetrators go to jail or are fined, “there are plenty that don’t get caught,” she added.

The scope of mislabeling can be quite large, such as in the case of the “Codfather,” or New England fishing fleet owner Carlos Rafael. He was  indicted earlier this year by federal prosecutors for allegedly lying about the amounts and kinds of fish he caught, such as labeling dabs, a type of flatfish, as haddock. Rafael owns 40 fishing boats in New England.

While the Oceana report doesn’t estimate the cost to consumers, other groups have. The Grocery Manufacturers Association puts the tab at as much as $15 billion annually. Its 2010 report noted that consumers are more focused on food safety even as fraud becomes more widespread. Profiteering and a low risk of getting caught may prompt bad actors to mislabel or adulterate food products.

“No good comes from mislabeling, none,” said Colles Stowell, the founder of One Fish Foundation, a nonprofit that focuses on educating consumers and students about sustainable seafood. “Mislabeling inherently is going to create confusion in the consumer.”

Stowell noted that he urges consumers to become “seafood smart,” by which he means gaining familiarity with the seafood industry, such as understanding when certain fish are in season or the difference between aquaculture across the world. Chilean farmed salmon, for instance, is raised with record levels of antibiotics, compared with antibiotic-free Norwegian salmon.

“When you’re at a restaurant, you really are blinded by that extra layer of not seeing an item before it’s prepared,” he said. He recommends patronizing restaurants that source their food locally or to check out community-sponsored fishing shares, such as Cape Ann Fresh Catch. 

Oceana’s study is misleading, according to the National Fisheries Institute, the country’s largest seafood trade association. 

“Any suggestion that Oceana’s study finds 20 percent of all seafood is mislabeled globally is incorrect,” the NFI told CBS MoneyWatch in a statement. “Twenty percent of the seafood they looked at, which includes the most commonly mislabeled species, were mislabeled.”

Mislabeling is happening at every part of the seafood industry: Seafood can be slapped with a different name anywhere from the processing plant to restaurants, Oceana found. The group based its report on more than 200 peer-reviewed journal articles, public documents and media reports.

The most common substitutes are Asian catfish, hake and escolar, which is also called oilfish. Farmed Asian catfish was sold as 18 different types of more expensive fish, ranging from cod to red snapper, and its use in mislabeling appears to be on the rise, the study found.

Other types of mislabeling include haddock being sold as cod and caviar that didn’t even include any animal DNA. It wasn’t clear what the caviar was made of, the report noted.

Health issues can arise from mislabeling. Escolar, which is one of the fish most frequently mislabeled as a more expensive type of seafood, includes a natural toxin called gempylotoxin, which can cause bowel distress in consumers. Nicknamed “the ex-lax fish,” escolar is sometimes mislabeled as “white tuna” in sushi restaurants.

Properly labeling escolar is important because consumers need to understand their risks before eating a food that could cause a reaction, Oceana’s Warner noted. “You don’t want to gamble on something that has caused outbreaks worldwide,” she said.

Oceana released the report shortly before recommendations are expected from President Obama’s Task Force on Combating Illegal, Unreported and Unregulated Fishing and Seafood Fraud, Warner added. “We’re trying to advocate for strong seafood traceability and labeling with legislation,” she said, noting that efforts in the European Union to improve traceability and labeling have resulted in lower fraud rates.

The National Fisheries Institute said its members “are at the forefront of getting rid of fish fraud,” and added that the seafood industry doesn’t need more regulation, but enforcement. “The laws, rules and regulations we need are already on the books.”

More regulation may face opposition from fishermen if they feel the burden falls on them, Stowell said. “Any regulatory approach aimed at creating more transparency in the seafood distribution system would be welcome and successful only if that program has buy-in from the fisherman,” he said. “As scrutiny increases, the fishermen feel they get squeezed.”