Kosher and Halal Certification Fraud: An Emerging Litigation Risk
At least three empirical examples demonstrate the real-world class action litigation risks for companies that allegedly improperly represent their products’ Kosher/Halal certifications. The manufacturer of Hebrew National allegedly falsely represented the Kosher status of its deli meats. Chipotle allegedly did not disclose the pork in its pinto beans. Nature Made supplements allegedly failed to identify the presence of pork or other animal products.
Food companies face huge risks from this litigation due to the enormous size of the potential plaintiffs’ classes. In the U.S., Halal-certified foods are a $20 billion market. Kosher consumers buy $12.5 billion in food annually, and the broader market for Kosher ingredients exceeds $300 billion. (Many non-Kosher consumers choose to buy Kosher foods due to their perceived higher quality, and Kosher is the “hottest word on food labels.”)
In addition to civil liability, fraudfeasors also face risks of criminal prosecution and conviction in the court of public opinion.
To manage some of these risks in the CPG market, some researchers are exploring the use of RFID technology to trace Halal-certified foods throughout the supply chain. Food companies in related market segments should consider developing plans to manage their risks of this emerging and costly litigation.