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Blackmores on board as Alibaba tests blockchain in Australian fake food clampdown

Published: 28/04/2018

Australian vitamins group Blackmores and New Zealand dairy group Fonterra have started selling goods to China via a new supply chain network, using blockchain technology designed to stamp out the sale of fake products.

China's biggest e-commerce company Alibaba this week launched a trial of its new network in Australia and New Zealand. If successful, it will be deployed globally as part of founder Jack Ma's push to tackle the sale of fake products on his vast e-commerce platforms in the world's fastest-growing consumer market.

Alibaba, which announced plans a year ago to create the trial network with Australian companies, this week launched pilot orders though the Food Trust Framework.

The pilot program uses the distributed ledger technology most commonly associated with cryptocurrency trading, to better track and monitor goods imported into China. The system will tag products with unique QR codes. 

Blackmores' odourless fish oil and Fonterra's Anchor dairy products are the first goods trialled on the framework. Alibaba is working with Australia Post and New Zealand Post on the program.

In New Zealand to launch the program, the head of Alibaba's Tmall Import & Export business Alvin Liu said food fraud cost the global food industry $US40 billion ($53 billion) a year.

"Food fraud is a significant global challenge, particularly with the growing complexity of supply chains."

Hard to detect

PwC, which has been advising Alibaba on the project, estimated 40 per cent of food companies find food fraud difficult to detect with current methods, and 39 per cent believed their products were easy to counterfeit. 

The sale of counterfeit foods has been a headache for Australian exporters such as Treasury Wine Estates. Police in China last month seized 50,000 bottles of fake Penfolds wine.

Blackmores chief executive Richard Henfrey said while the company's products went through 30 tests before they were released for sale, it needed to give consumers buying its products on e-commerce networks confidence they were getting the real thing.

Christina Zhu, Fonterra's president for Greater China, said consumers in China wanted to trace the products they bought online.

Mr Ma, one of China's best-known billionaires, last year called on legislators to crack down on the sale of counterfeit goods in China, where vast e-commerce platforms are notorious for selling fakes. He blamed relatively light penalties for the sale of fake goods, including copies of Australian brands.

Alibaba has been on the US government's "notorious markets" list over counterfeit goods sales, with authorities saying its online platform Taobao was being used to sell large amounts of fake items. The rise of China's technology firms and intellectual property abuses are at the centre of US President Donald Trump's threat of a trade war against China.

 

Alibaba's financial arm Ant Financial has embraced block technology for a wide range of applications.

It reportedly has more blockchain patents than any company in the world. Other Chinese technology giants Baidu and Tencent are also using the distributed ledger technology. However, cryptocurrency trading – the most common activity associated with blockchain – is banned in China.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

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