Alibaba Group, PwC, Blackmores and Australia Post have signed a memorandum of understanding to explore blockchain technology to curb food fraud.

Alibaba is waging a war against fake products sold on its marketplaces which are hurting its reputation internationally. This battle extends to food products and is particularly relevant to Australian producers given the demand for Australian agricultural products in China.

Essentially Alibaba wants to develop a framework to address food fraud risk to provide more trust in the supply chain of food products. Consumers want to know the provenance of what they are buying and sellers don’t want their goods sold alongside impersonators.

It is envisaged that this framework will be piloted in Australia and form the basis of a global supply chain model that can be applied across all of Alibaba Group’s ecommerce markets.

The project will enhance traceability models and introduce new technologies to mitigate the risk of counterfeit and fake food products. This will include the development of a pilot blockchain technologies solution model for vendors to be utilised by participants across the supply chain.

Blockchain technologies, often referred to as the “internet of trust”, were known to be originally developed to publicly and irrefutably track the transfer of Bitcoin and other cryptocurrencies. These technologies are designed to authenticate, verify, permanently record and provide ongoing reporting in relation to the transfer of ownership and providence of goods, and are now finding much wider application in many different industries.

“Food fraud is a serious global issue that not only costs the food industry billions every year, but puts consumers’ health at risk,” said Maggie Zhou, Managing Director of Alibaba Group Australia and New Zealand.

“The signing of today’s agreement is the first step in creating a globally respected framework that protects the reputation of food merchants and gives consumers further confidence to purchase food online.”

“Given Australia and New Zealand’s exemplary regulatory environments, along with being home to some of the world’s most successful food and beverage exporters, it was a natural decision to pilot the program here. We see the Australian and New Zealand markets setting the tone for the rest of the world when it comes to integrity, safety and quality of food supply chains.”

PwC research shows 39 per cent of food companies say it is easy to fake their food products and 42 per cent believe there is no method for detecting fraud, beyond standard food checks.

“Trust is rapidly becoming the defining issue of our time. Building trust in our food supply chain is important at a time when public confidence in food producers, processes, vendors and even government regulators has been rocked by a number of scandals,” said PwC Australia CEO Luke Sayers.

Blackmores and Australia Post will be involved in the project by providing information and in-market testing across their respective supply chains.

The signing of the agreement was witnessed at a ceremony at Parliament House by The Hon Steven Ciobo MP, Minister for Trade, Tourism and Investment, on the sidelines of Chinese Premier Li Keqiang’s visit to Australia.

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