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.
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 guidelines
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.
Cracking the Sarpong Code
After digging through a maze of email conversations by top management of Fareast Mercantile to unravel how cartons of an almost one-year-old expired biscuits were sold during the Christmas festivities in 2021, DUBAWA’s attention was turned to Edward Sarpong, one of the kingpins, with a reputation for buying and selling expired products, mostly non-consumables. On March 17, 2022, we had information which suggested he was at the Fareast warehouse (non-food section) and was likely to purchase some expired products. We quickly made our way to the warehouse to begin our surveillance and tracking activities. A day before that though, we intercepted what had become a normal routine – the curious e-mails. Only this time, no specific reference was made in the mail to suggest the goods had expired, except the person to whom they were to sell the stocks to, gave the plot away.
The trail of email conversations started by the head of Finance at Fareast, Aney Mate, on March 16, 2022 was sent to Saurabh Sharma, the Logistics and Supply Chain Manager; and copied to the General Manager for Sales (Non-food), Raja Mohammed. The mail was essentially to communicate the processes of documentation and prices covering a stock, suspected to be expired goods meant for the market.
Before going to the warehouse on March 17, we had these e-mail-listed products in mind. Our objective was to find out if the products Sarpong had come to buy and was about to load into his truck had any similarity to those detailed in the mail the day before and whether or not any of those products had expired. The results were all too striking. Just as was detailed in the mail, our cameras captured some of the products which included Airwick FM Refill LAV & CAM 6*1, Harpic Gel Citrus, 725 ML X 12, Airwick FM Complete LAV & CAM 4EA*1, Harpic Gel Lavender-450MLX12, Airwick Cedar and Oranger Anti Tobacco 300MLX12 under “cash sales.” Some of those products had expired in September 2021.
Around 3:30 pm, Sarpong was done loading his truck with the goods. Skilled at what they do, they would pack the expired products first into the truck and then later cover them with cartons of wholesome Dettol.
After documentation, Sarpong’s truck set off from Fareast Mercantile’s warehouse which is almost opposite the Coca Cola company at Spintex. Right from the Spintex to Accra CMB, a traffic laden 13.7 km journey, DUBAWA tracked the truckload of products to be sure of the final destination and monitored how the products were offloaded by strong men and head potters (kaya yei) into mini-shops located within the heart of CMB.
‘The Bogger dealer’
On March 29, 2022, DUBAWA again mounted another surveillance at the Fareast Warehouse and monitored how another dealer, known only as ‘Bogger,’ bought margarines and biscuits suspected to have expired from Fareast warehouse. He is known for dealing in expired consumables such as margarines, biscuits, soft drinks and is believed to have recruited a number of dealers some of whom have since cut ties with him to go solo. On March 29 when many Ghanaians had a final crucial world cup qualifying play-off to think about against Nigeria, Bogger was thinking business. He got to the warehouse around 2:00pm and loaded the goods into the same truck used by Sarpong and transported them into the heart of CMB. DUBAWA, as usual, followed the truck right from the warehouse at Spintex roundabout to its final destination – just about four-five minutes walk away from where Sarpong had previously offloaded his. The products were here also offloaded into mini-shops and warehouses at the CMB.
ARREST OF SARPONG
On March 30, an email was sent by Mate to Sharma, and other leaders of the company with the subject “Cash sales” indicating another transaction was afoot. This time, the expiry date of the product was clearly indicated.
Raja Mohammed, the General Manager for Sales (Non-food) and the contact person for Unilever at Fareast Mercantile, who was copied in the mail, replied with prices of the goods. His reply was only copied to Aney, Head of Finance.
CID INVOLVEMENT
Having understood the modus operandi of the expired goods dealers together with their enabler, Fareast Mercantile (Imperial Logistics), and having gathered enough evidence, DUBAWA engaged the police Criminal Investigations Department of the Ghana Police Service (CID), briefed them and requested their assistance in apprehending the suspects. This would happen on March 31 when DUBAWA, together with the CID, mounted an operation to have Sarpong arrested, his truck impounded and officials of Fareast interrogated.
Sarpong had returned to the warehouse on March 31, a day after the curious e-mail conversation, to purchase the same quantity of expired Glade mini gel (which stock expired on March 22, exactly as was detailed in the email conversation). As usual, the expired Glade mini gel products were loaded first into the KIA truck by Sarpong and his men and covered by cartons of wholesome Dettol.
Sarpong, who was driving a dark Toyota saloon car was trailed from the Fareast Mercantile office to CMB and arrested together with the KIA Truck which had also arrived at CMB and was just about to be offloaded. A preliminary search conducted by the Police on the truck revealed boxes of expired Glade Mini Gel buried under a heap of wholesome cartons of Dettol.
The driver and Sarpong were held in custody and the truck impounded, pending a thorough investigation by the FDA.
The Return to Fareast Mercantile
The DUBAWA team together with an officer from the FDA, Patrick Osei, as well as police officers, returned to the Fareast Company to hear from the company and to conduct further investigations at the various warehouses. Due to traffic, the combined team got to the warehouse after 6:00 pm, but the Police said they could not conduct a search after that hour as per the policing rules. The warehouses were therefore sealed and locked by the FDA to allow for a thorough search to be conducted the following day. An official of Fareast who introduced herself as the Corporate Affairs head, Nafisa Quainoo, with a warm beautiful smile, denied management’s knowledge of the sale of expired products and requested that the case be settled amicably, but the police insisted on the search.
On the morning of April 1, the DUBAWA team returned to the warehouse and met a busload of FDA officials numbering about 12, together with the CID officials who conducted the operation the day before, present for a thorough search.
After almost three hours of searching through eight warehouses (food and non-food divisions) belonging to the Fareast Mercantile, the FDA officials found expired products in both warehouses. In the food warehouse, margarine and biscuits that expired in September 2021 were still in the warehouse, almost seven clear months after expiry. Quainoo could not provide a definite answer to the FDA official’s questions regarding the last time the company had approached the FDA for the destruction of the expired products as required by the guideline.
The expired products were neatly separated from the wholesome products which ordinarily was the right thing to do. But what gave the company away was the fact that the expired Glade mini gel found in the warehouse was the same expired product found in Sarpong’s truck which, but for the operation by DUBAWA and the police CID, would have ended up on table tops and on the bare floor at CMB and in homes of consumers.
Upon the return of the FDA officials to the Police HQ, the detained suspects were asked to offload all the content of the impounded truck for inspection. It turned out that 7,778 pieces of Glade mini Gel from SC Johnson had expired. Few cartons of the Glade Mini Gel were, however, found to be wholesome. The FDA took custody of the expired cartons to be used as exhibit if it becomes necessary to prosecute. Eddy Sarpong and the driver are on bail pending the final investigation by the FDA.
Confession?
In a casual conversation in the Akan language at the police CID, which was recorded by DUBAWA, Sarpong confessed to selling expired products of about three months and that he had been doing this business for at least “eight years.”
According to him, his products are mainly sold by the market women at “donkomi” (give away) prices.
What next?
The police tell DUBAWA they have handed over evidence to the experts – the FDA – for further investigation and counsel, and would take further action when the CID receives additional directive.
DUBAWA also presented its evidence to the Head of Legal at the FDA, for the FDA to act swiftly in the interest of the public.
The FDA has begun its own investigation but is yet to take a decision on what to do with officials of Fareast Mercantile. Under Public Health Act 2012 Act 851, and depending on the seriousness of the breaches, the FDA has powers to fine and prosecute persons who breach any part of its guidelines.
Before the publication of the first part of this investigation, attempts to get an official response from the Head of Corporate Affairs at Fareast, Nafisa Quainoo, failed. She did not respond to Dubawa’s calls or messages. Dubawa then went ahead to publish the first part, hoping, if the company found it necessary to respond, the response would be included in the second part. Later, a lawyer for Fareast called to answer the questions DUBAWA had wanted to put to the company. The questions have been sent to him and are awaiting their response which will be incorporated in our next publication.
