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Consuming trash: unravelling the multi-million cedi business in Ghana’s expired products business (Part 1)

Months of painstaking investigations by DUBAWA, a fact checking organisation in Ghana, have uncovered a business model involving one of Ghana’s biggest importers and wholesalers, Fareast Mercantile and a network of some ‘get-rich-quick’ business men who deal in expired products at a popular section of the Central Business District (CBD) in Accra called CMB.

The model, which is in flagrant violation of Ghana’s Food and Drug Authority (FDA) guidelines, as well as the United Nations Guidelines for Consumer Protection, has some businesses buying the expired products (consumables and non-consumables) at a beat down price from Fareast Mercantile and later selling them at CMB to unsuspecting buyers or others who care little about public health.

Stock at the warehouse ready for the next buyer

Pictures, videos, surveillance and email conversations taken and intercepted by DUBAWA points to a cultured and coordinated plot by top management members of the company in cahoots with some goods dealers to cash in on expired products fit only for the trash bin. All they need are willing buyers from CMB who will package and re-sell these items to unsuspecting consumers and this they have done for years.

But with the lead from DUBAWA and a swift surgical operation by officers from the Criminal Investigations Department (CID), one of the dealers, Edwin Sarpong, was arrested on March 31, 2022, with truck-full of expired products hidden under a few wholesome cartons of Dettol.

Another suspect, only known as ‘Bogger,’ is under police surveillance after he successfully chauffeured cartons of expired margarine, Colgate and Jacobs Cream Crackers from the food section of the Far East Mercantile warehouse to CMB.

Managers of Fareast Mercantile, represented by the Corporate Affairs head, Nafisa Quainoo, have since been invited for questioning by the Food and Drugs Authority (FDA) in connection with pending investigations and possible prosecution.

How it started

DUBAWA Ghana was contacted months ago about a thriving multi-million cedi business in expiry products in Ghana’s Central Business District. It did not take too long to know the source of the expired products – Fareast Mercantile, now owned by Imperial Logistics who are majority shareholders of the company after buying 51% of the shares in 2020. The company is by far one of the largest wholesale distributors in Ghana, with over 20 product supplies from reputable multinational companies including Unilever Ghana, Cadbury Ghana, Guinness Ghana Breweries, United Biscuits Ghana, SC Johnson and L’Oreal West Africa, Reckit Benckiser(GH).

The wholesale company was founded in Karachi India in 1860 and has offices in Lagos, Dubai, Mumbai, China, Singapore and the Canary Island. In Ghana, it was incorporated in 1997 and has four branches in Accra, Kumasi, Takoradi and Tamale. In 2018, Reckitt Benckiser, a consumer goods company producing health, hygiene, and home products awarded Fareast Mercantile with the Best Distributor Award. 

Managers of Fareast receiving the award in 2018

The company was again adjudged by Colgate the best Distribution Company in Ghana in 2019. The company’s profile online indicates that it has 400 workers and generates sales in excess of $47 million annually. It is entirely possible, from the investigation by DUBAWA, that part of this annual sales by the company are proceeds from the unlawful sale of expired products. Stocks which are meant to be disposed of under strict supervision from Ghana’s Food and Drugs Authority (FDA), find their way into the market and by extension into homes and stomachs of consumers, with dire public health implications.

The Public Health Act 851

It is important to understand the modus operandi of Fareast Mercantile and the buyers of expired products within the context of Ghana’s Public Health Act 2012. Section 100 of the Public Health Law Act 851 states in part: 

(3) A person commits an offence if that person sells or offers for sale a food that

(a) has in or on it a poisonous or harmful substance;

(b) is unwholesome or unfit for human or animal consumption;

(c) consists in whole or in part of a filthy, putrid, rotten, decomposed or diseased animal or vegetable substance;

(d) is adulterated;

(e) is injurious to health; or

(f) is not of the nature, substance, quality or prescribed 

Also the United Nations Guidelines for Consumer Protection charges businesses to ensure consumer protection which starts “with good business practices that meet the legitimate needs of consumers. In summary, the Guidelines state that businesses should achieve this by:

• Dealing fairly and honestly with consumers at all stages of their relationship;

• Avoiding practices that pose unnecessary risks or harm to consumers, particularly those who are vulnerable and disadvantaged;

• Giving consumers accurate information about goods and services, terms and conditions, fees and costs to enable them to make informed decisions.”

Fareast modus operandi and FDA Guidelines

Fareast Mercantile imports and takes stocks – consumables and non-consumables – from leading manufacturers in Ghana and other global companies for distribution into malls and other wholesale and retail outlets across the country. In its process of distribution, stocks get damaged or expired, making them unwholesome. Under regulations of the FDA, unwholesome products are: “products that do not meet regulatory requirements or when consumed/used can be injurious to the health of the consumer; Including Substandard / Falsified (SF) products.”

The FDA has on numerous occasions asked traders and wholesalers to desist from selling such products to unsuspecting consumers. There are countless stories of seizures, destructions and sanctions meted out to companies who violate the FDA guidelines. 

Checks by DUBAWA indicate an arrangement between Fareast Mercantile and its clients, which makes it possible for the clients to pay and return their expired stock to Fareast to be discarded under the strict FDA guidelines. 

Expired Stock and FDA’s guidlines

In March 2022 alone, products worth GH₵294,211 from the principal suppliers to Fareast Mercantile, were deemed to have been damaged and or expired.

The sum of expired products for March 2022

The FDA guidelines do not only prohibit the sale of expired products, they do not even allow companies to dispose of expired products by themselves.

For the avoidance of doubt, the FDA guidelines state;

“3.1.1 No person shall dispose of any unwholesome product without permission and supervision from the Food and Drugs Authority (FDA). 

3.1.2 Approval of application and safe disposal of any unwholesome product shall be sought from the FDA. 

3.1.3 The applicant shall pay a prescribed fee for destruction as specified in the fee schedule. 

3.1.4 The applicant shall arrange with the appropriate Waste Management Agency to assist in the destruction and also be responsible for conveyance of the unwholesome products to the site of destruction. 

3.1.5 Where necessary, representatives from the Environmental Protection Agency, Customs Excise and Preventive Services (CEPS), Audit Service and the Ghana Police Service shall be present as witnesses. 

Tracking the expired goods dealers at Fareast Merchantile

Having received information about the activities of Fareast and the expired goods dealers, DUBAWA began to monitor and track the movements of the products and other activities at Fareast to CMB.

The one-year-old expired biscuits

Early in the year 2022, a chain of email conversations at the highest level of management centred on what to do with a stock of expired digestive biscuits which had been in the warehouse for close to or a little more than a year. There was no word on inviting the FDA for the safe disposal of the unwholesome biscuits. Rather, the e-mail conversations focused on the pricing and sale of the biscuits.

On January 20, 2022, the e-mail conversation was triggered by the Acting General Manager (AGM) Sales- (Food), Rahul Kashyap, with the subject title “RE: LIQUIDATION OF TWIN PACK HOB AND DIGESTIVE JAN – FEB’21”.

On copy in the email were some top management members of the company including the head of finance; the Logistics and Supply Chain Manager, Saurabh Sharma; the Associate Manager, Supply Chain and Logistics, Swapnil Sakharkah; as well as MIS Executive, Abdul Habib.

Swapnil Sakharkah reminded Abdul on February 14, 2022, almost a month later, to act on the mail sent by the AGM. With a subtitle “Importance High” Swapnil directed Abdul to process the products “ASAP.”

On February 14, 2022, Habib responded by providing the product description, quantity, cost as well as the expiring dates. 

After Habib had provided details, Swapnil again directed Abdul to “expedite” action hinting of an expected stock audit.

The mail trail did not go further to explain what kind of action was to be taken by Abdul, but the answer to that has been clipped in the Gmail messages. A gentle click on “view entire message” button revealed details of how the expired biscuits, priced at GH₵5,380.00 by Abdul Habib, had been sold in December 2021 almost 10-11 months after expiry. 

Other similar stocks were also sold within the same period. The managers were only waiting to regularize the sold expired products, hence the January 20, 2022 mail sent by Kashyap.

On December 8, 2021, Kashyap issued the directive for the expired stocks to be released and sold. 

Emmanuel is one of the known dealers in expired products at CMB. The expired products supplied to him, as stated in this mail, were the same products said to have expired in January and February 2021. This can be verified by checking the product code, description and quantity. They are the same as the information provided by Abdul on February 14, 2022. For efficient warehouse management, it is highly irregular for different products to have the same code

Under the same subject “Liquidation of twin pack hob and digestive Jan-Feb’21” 800 cartons of expired biscuits originally sold to customers at 40 cedis each per carton, were discounted at a price of 25 cedis and sold. Another 930 cartons of expired biscuits were sold on December 8, 2021, biscuits that expired in Jan-February 2021.

Abdul provided the status of some 930 expired biscuits detailing their product code, description and date of expiry in the mail communication above. He would later on December 21, 2021, inform Mate and Kashyap the breakdown of how the 930 cartons were sold in the mail below;

A Warehouse Officer, Samuel Mensah, would later on January 19, 2022, provide details of the dates, the Manual Way Bill (MWB) numbers on which the expired stocks were sold. One of them included the stock sold to Emmauel with MWB number 16823.

After cashing in on the expired biscuits, this was Rahul’s decision on how to account for the money. 

DUBAWA has tons of emails from top management categorised as “damaged products” but which were sold under similar arrangements, contrary to the FDA Guidelines and the Public Health Act. We will serialize them in our subsequent publications.

Food poisoning and expired food

Consuming expired products, including biscuits, have dire public health implications, especially as far as food poisoning is concerned. Food poisoning is deemed to be one of the main problems in public health worldwide. The World Health Organisation (WHO) states that 600 million people around the world, or 1 out of 10 each year, become ill after consuming contaminated food. Out of this population 420,000 die, including 125,000 children under 5 years of age, due to their vulnerability to develop a diarrheal syndrome, about 43% of Food Borne Diseases (FBDs) occur in these patients. About 70% of FBDs result from food contaminated with a microorganism.

In Ghana, over 625,000 food poisoning incidents are recorded annually with over 297,104 people hospitalised annually, according to a Ministry of Food and Agriculture and World Bank 2007 report. Even though the data does not show how many of these incidents of food poisoning are as a direct result of eating expired food, a registered dietician in Ghana and a popular TV Show host, Nana Kofi Owusu, told DUBAWA  it is entirely possible for a person who consumes expired product to suffer food poisoning.

“Consuming expired food and biscuits may have negative health implications which may range from minor issues such tastelessness, reduction in quality of the product to severe cases of food poisoning which come with lots of diarrhoea and may lead to death especially in children,” he said. 

Part 2 of this investigation, to be published tomorrow, which will delve into the DUBAWA/CID operation, the arrest of Sarpong, a kingpin in expired products at CMB, his confession and the activities of the ‘Bogger’ dealer as well as the FDA intervention.

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