This report shows a literature review of the risk management in the Australian food industry and recognizes the important risk management methods utilized by the food industry. By taking the references of current cases of food contamination, safety of food becomes the vital for the food and drug association (FDA). Although various consultancy information available on the web regarding the managing food risks, but still there is restricted academic literature available regarding the managing these types of risks.Therefore, this reportaims to discover how food risks are controlled within the Australian food industry. This research paper also explores that how Australian food industry assess the risks and then manage and communicate these risks.In this report we will discuss the literature review about the risk assessment, risk management and risk communication.
Food industry is growing rapidly due to rising interest in food speciality. The food and grocery sector is one of Australia’s growth sectors of the future, value adding to Australia’s great strength in agricultural production and increasingly delivering exports into growth markets of Asia and beyond. In 2013-14 exports of food and beverage in Australia has increased by 13.5%. Every business has some risks. Risk analysis is most important part for every business. To establish any business in the market risk analysis should be done for the success of the business. Firstly, here we will discuss about what is risk analysis? Risk analysis is the process which is used to identify and evaluate issues that may risk the accomplishment of a project. The most common objective of risk analysis is to describe risk (Aven, 2015). By doing risk analysis one can set up a risk picture, effectively think about the choices and solutions in term of risk. It also determines the result of numerous measures on hazards. Risk analysis seeks to categorize the risks tackled by any business, comprehend how and when they arise, and estimate the impact of adverse results. However, Risk analysis can be of two types quantitative or qualitative (Vose, 2008). In Quantitative risk analysis, a challenge is made to mathematically define the probabilities of various events. On the other hand, Qualitative risk analysis, which is used more frequently, does not include mathematical probabilities or predictions of loss. Even this method involves defining the numerous threats, defining the extent of liabilities. Moreover, the main aim to analyse risks in the beginning to mitigate or hedge the risks. As a consequence, objectives and possibilities can be set at exact level or certain schemes can also be formed in advance. As well as risks can be accomplished and balanced on right time (Morgan & Henrion, 1992). Risk Analysis process has three main components: Risk assessment, Risk management and risk communication. Each element plays a crucial role in risk analysis process in any business. Risk assessment helps to progress teamwork by growing openness, honesty with the project team. The whole business will be more gainful when it is informed to risk assessment. Furthermore, risk management is the procedure in which organizations classifies, measure and treat risks that could possibly affect their business tasks. They also make better strategies to manage risk at the right time. Lastly, risk communication can be defined as interchange the information and view throughout the process of risk analysis regarding all factors which relates risks, e.g.: risk assessment, risk managers and risk assessors. The main purpose is to update people about possible jeopardies. All these three factors come under risk analysis process which will discuss further in depth. In food industry it involves various kind of risks. Some are as follow:
TYPES OF RISKS IN FOOD INDUSTRY
- ECONOMIC RISKS:
Economic risks are those risks which are related the economy. For example, due to the change in the government prices of raw material has increased. If the prices of raw material increased, organisations in food industry will automatically increase the prices of food and eventually actual income of consumers decreased and sales will reduce. Natural risks are also the part of economic risks. For example: fire occurs in the business premises. These natural risks can be managed with the help of insurance.
- Health risks
Health risk is a major risk in the food industry. Some kind of foods get contaminated very soon which is major cause of food poisoning. How the food industry can manage the risk of contamination we will discuss it in the literature review.
- Financial risks
In financial risk, return on investment is the different of return which is projected with the help of budgets is known as risk. This comprises the prospect of losing some or all of the initial investment. According to Novak“risk is a possibility of an undesirable event”.
All these kinds of risks would be discussed in detail in the literature review with help of academic journal articles.
Before discussing the review of literature about the risk analysis, assessment, management and communication we should know what is risk? In the introduction part we have discussed about the risk analysis, risk assessment, risk management and risk communication. Now we are discussing that what risk is. Any situation which involves the exposure of danger is known as risk. Now we will discuss the review of literature about the risk assessment, risk management and risk communication.
According to Aziza, Daudin, Jacques and Aleixandre (2014) in their journal “Risk-Based Approach for Microbiological Food Safety Management in the Dairy Industry” they assess the risk by the use of quantitative microbiological options which can beused by food machinists. In this journal, the case of risk assessment, Listeria monocytogenes is found in soft cheese when the workers prepared this soft cheese from pasteurized milk. The purpose of the author to write this article is tovirtually proof that how quantitative risk assessment can be applied to straightpossibleinvolvementpolicies at diverse food processing steps. To develop this research journal, the researcher sets hypothesis whichcalculates the risk of listeriosis at that time when a consumer actually consume this product and these are the potential sources which makes the food contaminated. All the process which undertakes from the level of pasteurization to last step which is consumption, the researcher assess that the risk of contamination has increased.Contaminated food can harm the consumers very badly. In this research, they tested it in the laboratory that there is a process of 180 days to manage this risk. Rutkow, Vernick, Edwards, Rodman and Barry (2015) have assessed the major risks involved in the food of restaurants which they have discussed in their journal “Legal Action against Health Claims on Foods and Beverages Marketed to Youth”. In this journal they (De Vocht, Jan2015, Vol. 18)discussed that the food for example chicken, meat, seafood and dairy foods needs to be cooked properly. If these foods are kept in the refrigerator more than 2 days it becomes contaminated and contaminated food is the biggest reason of food poisoning. In this research report they said these cases mostly happened in the restaurants. They cooked food and store it in the fridge for more than 2 days. In this research they assess the risk of contamination. As per the research of Lofstedt and Ragnar (2009) in their research journal, “Risk communication and the FSA: the food colourings case” they assess the risk of colourings and preservatives in the food which is the major cause of skin allergies and asthma. From the ancient times colourings and preservatives are used in the food to make them tasty and last longer. Herbs, spices, pepper and other normal flavours and preservatives are popular to these days. However as the world is changing and modern technologies are using, the food and drink industry is using the natural preservatives and colours in the food. So many tests has been done in the laboratories in so many nations, particularly the UK, they found that some of these artificial colours and preservatives are not safe for the public health and these are banned for the safety of public health. People can suffer with skin allergies and asthma to hyperactive children due to these colourings. Health diseases which occurs due to food, reflects the past and as well as present investment of funds in controlling food borne hazards. If an organisation fails to sustain these controls then they have to suffer a re-emergence of problems. The animal feed from Belgian was unintentionally contaminated with dioxin in polychlorinated biphenyls (PCBs) and it was spread to approximately 2,500 farms. Sarah (1999) In 2008–2009 during the winter season, US based organisation neglect their leaky roof which was the biggest reason of the sickness of more than 700 people by Salmonella infected peanut products in the U.S. (U.S. CDC 2009b).
Rutkow, Vernick, Edwards, Rodman and Barry (2015) have assessed the major risks involved in the food of restaurants and how to manage these risks which they have discussed in their journal “Legal Action against Health Claims on Foods and Beverages Marketed to Youth”. In this journal, the researchers sets the hypothesis and then with the help of survey they gave some recommendations that how to solve the problem of contamination in food. Food should be cooked properly. That food should not store in the cold storage more than 2 days. It should be reheated only once. It is significant to keep in mind that the same food handling practices are used to prevent all food poisoning diseases. International consumers are more worried about the food safety nowadays because of the scandals in food industries and these incidents are growing day by day. Governments are also taking the necessary steps to control these scandals and ensure the food safety. All the individuals and food supply chain is taking steps for the food safety. Van Dorp, Beulens, (2005). Then the researchers found an imperative tool to ensure the food safety which is known as HACCP (Hazard Analysis critical control point). This is the risk management based programme which is started in 2002. It is an organization that identifies, assesses and controls hazards that are important for the safety of food. HACCP can also be used to identify quality and regulatory hazards. Sperber (2005) In some of the countries food related risks can be manage by passing the government legislations. In 1996, the first important pesticide legislation was passed by the United States. This is the major reform in food industries over thirty years which involve assessment of increasing force of little dose exposure to several chemicals on the health of adults and children. In this legislation the standards to be set to protect children (NRC 1993; Hamilton and Crossly 2004). In this research paper, the researchers have given a review and assessment of various food-risk prioritization and the risk management methods of this prioritization which have been generated by governmental food-safety authorities, other regulatory agencies and non-governmental associations worldwide. This paper shows the need for a new science based system approach which will be helpful to reduce these kinds of risks. In this article, the researchers has done many experiments and read the previous studies regarding the risk prioritization but they were unable to find any solution. The major concentration of this risk prioritization study regarding food-risk analysis had on the human and public health regarding issues, where the most of the studies has used the disease burden concept. Even though it is extensively accepted that economic and market-level effects of microbial hazards and protective interference to reduce the risks of food-borne are essential to the concert of industries and markets, they are almost never accounted for in risk prioritization frameworks Steven, Shawn (2016). As we have discussed in the above section, types of risks about the natural or financial risks such as any happening in the business premises will be the major cause of financial loss. To cover these kinds of losses in the businesses they should adopt the risk management technique which is known as insurance. In this article, the researchers provides the advice for industry experts in food industry companies which will be helpful to recover their risk management hard work, whilst as per the regulations of Food Safety Modernization Act 2011 that gives the U.S. Food and Drug Administration (FDA) the authority to order recalls. As per the recommendations given by Leslie Krasny of Keller & Heckman LLP that this new law would also concentrate on hazard analysis and risk-based protective controls. They also recommend that the food industry companies should have the sufficient insurance coverage to manage the risks. During the crisis or anything happen in the premises insurance companies can cover their risk. (GEISEL, 2012)
Lofstedt and Ragnar (2009) have discussed in their research journal, “Risk communication and the FSA: the food colourings case” about the risk communication. in this research journal, authors found that how the UK Food Standards Agency (FSA) communicated the risk of food which includes the colours and preservatives, with the scientific findings of the Southampton study, which argued to express a connection among the consumption of a food contained the six artificial colours and hyperactivity in children. It was printed in September 2007 in “The Lancet” medical journal. Food standards agency has conducted the interviews with staff at the European Food Safety Authority (EFSA), and campaign groups. There main aim was to make the public aware about this risk. They communicate this risk to the FSA and FSA has banned the usage of these preservatives and colours in the food.
Aziza, Daudin, Jacques and Aleixandre (2014) have discussed about the risk model which will be helpful to reduce the risk of cross contamination in their journal “Risk-Based Approach for Microbiological Food Safety Management in the Dairy Industry”. The fresh cheese or the procedure atmosphere is replicated, over time, space, and between products, accounting for the impact of management options, such as hygienic operations and sampling plans. In this research, the researchers adopt the sensitivity analysis model. In this model they collect the data by giving the priority to the methods which will improve the validity of model. This model allowed the recognition of main constraints which contribute the risk of listeriosis and take defensive and remedial events.