Is that expensive “sea bass” in the restaurant, or that you buy as “Category Manager – Fish” for a frozen food manufacturer – really sea bass? Or is it a cheaper product? Or even something that should not be sold at all, an endangered fish species perhaps. What about those electrical components? Are they genuine, made by the reliable firm whose name is on the case, or are they counterfeit, bad quality products from an obscure plant in an obscure country?
There is a whole category of procurement-related fraud that is based on buyers not getting what they thought they were paying for, and you won’t be surprised to know that a chapter in my forthcoming book “Bad Buying: How Organisations Waste Billions Through Failures, Frauds and F**k-ups” covers that very topic.
There are some pretty surprising cases too. Even bulk oil shipments can lead to issues, as there was a court case some years back based on a very large firm shipping oil that was apparently lower grade than the specification agreed with the buyer. So as in that case (or indeed the sea bass example), it can be very difficult to know if you are getting something genuine. Understanding the provenance of what you are buying is key – but not always easy.
However, a story this week from Moldova made even my jaw drop. The “counterfeit” goods in this case are … helicopters! Balkan Insight website reported this.
“The Moldovan Prosecutor’s Office for Combating Organised Crime and Special Cases and investigators from the Police General Inspectorate closed a clandestine factory in the Criuleni area near the Dniester river in the east of the country on Tuesday that was producing copies of Kamov KA-26 Soviet-type helicopters”.
The helicopters were destined to be illegally exported to other ex-soviet countries, and were “produced without the necessary permits and documents of origin for the parts and equipment used.”
It is not clear whether the buyers knew they were getting unauthorised machines (but presumably at a lower price than the “real thing”) or whether they though the items were genuine. It also raises questions of safety of course. Were they actually made to the right specification, but the manufacturer was acting without the right permissions, or might the helicopters have proved dangerous as well as dodgy?
Anyway, this certainly qualifies as a prime case of Bad Buying, and one of the more interesting cases of what we might call “provenance fraud”. It also has confirmed my personal vow never to step into a helicopter again. I did once, from the centre of New York out to the airport, and while it was an “interesting” experience, it was also a “never again” moment!