two-chains
Software & Web Development

Could blockchain help fight the counterfeit goods racket?

The spectre of fake goods raised it head again at the end of 2016, emerging surreptitiously from the holly and the tinsel. While Black Friday and Cyber Monday ratcheted up the Christmas shopping pressure on retailers and consumers, the prospect of buying counterfeit goods is never far away.

Aziz Rahman, senior partner at serious and corporate crime defence specialist Rahman Ravelli, warned traders that they could be the biggest victims of the growing counterfeiting problem.

“There are more counterfeiting seizures being carried out, which means more people are likely to face prosecution,” Ravelli said. “A sales day such as Black Friday intensifies the desire for a bargain and, therefore, creates a demand that can be filled by people supplying counterfeit goods. It can be the case that people accused of selling counterfeit goods genuinely do not know that what they are selling is fake.”

The global trade in fake goods is worth around half a trillion dollars a year, at least according to a report from the Organisation for Economic Cooperation and Development (OECD) and EU’s Intellectual Property Office (EUIPO). It’s a huge problem and is not really going to go away despite the best efforts of many retailers.

According to Bloomberg, Amazon is now getting serious about counterfeit goods in its Marketplace and is looking for brands to register with the firm and for sellers to prove they have permission to sell those brands. A register is one way to do it perhaps, but it seems unwieldy and it would rely on each manufacturer to register and maintain product lists. Not impossible but certainly that would leave room for error.

Supply chain provenance has long been a bit of a golden chalice due largely to the sheer size and geographical reach of so many chains. Creating traceability has usually meant suppliers have to produce their own transparent records, which is a huge ask and raises the question of reliability. Although being an open and trusted brand makes sense, it is not always practical and does not always fit with smaller suppliers across a range of different cultures. Where are the checks and balances and who is providing them? How good is the data on which product provenance can be built?

Businesses such as Ecodesk, EcoVadis and Sedex offer variations on the supply chain sustainability theme but it’s all a bit fragmented and proprietary. They generally use vendors at the top of the chain to put pressure on the suppliers below, which works to an extent but it can be time consuming  and expensive. Again, how good is the data? Are the sources audited?

 

Fishy

London-based Provenance has an interesting approach offering free tools and listings but perhaps its most innovative offering is that it’s based on blockchain technology. The intention is not necessarily to reduce counterfeit but surely it will, if retailers can access product records online and read a provenance that cannot be tampered with? As the blockchain creates a chronological ledger of data, its provenance is already set in the underlying technology, making records traceable and accountable.

In September Provenance apparently used its blockchain technology to track the sustainability of two types of tuna fished in Indonesia. Tuna supply chains have traditionally been a little shady but demands from supermarkets in particular for sustainable sourcing records has meant that changes are needed. Earlier this year Tesco had a run-in with tuna supplier John West over its fishing practices. The pressure clearly has to come from the top of the food chain.

It is this traceability feature of the technology that is attracting the banking industry and creating disruption, as Deloitte revealed in its report earlier this year, Beyond bitcoin: Blockchain is coming to disrupt your industry. The wider adoption of blockchain to underpin trade and not just finance is intriguing though. In October it was reported that Australian-based cotton trader Brighann Cotton Marketing, Commonwealth Bank of Australia and Wells Fargo & Co completed the first cross-border transaction using blockchain applications. More will undoubtedly follow but if the technology is to reduce counterfeiting it has a long way to go as it needs more comprehensive adoption. Unfortunately no one yet has really grasped this nettle fully but certainly blockchain will play a major role in making it happen.

PREVIOUS ARTICLE

« How will Trump affect tech lobbying in the US?

NEXT ARTICLE

Twitter and the scourge of cyberbullying »
Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

  • Mail

Poll

Do you think your smartphone is making you a workaholic?