Alibaba Introduces Blockchain System for Food Trade
Alibaba and four Australian and New Zealand companies introduced a food-tracing system based on blockchain technology on Friday.
The consortium, which includes two New Zealand-based companies dairy-exporter Fonterra and New Zealand Post, as well as Australia’s natural health company Blackmores and Australia Post, is called the Food Trust Framework. It will use an immutable central ledger to provide end-to-end supply-chain traceability and transparency designed to enhance consumer confidence and build a trusted platform for cross-border trade.
Alibaba’s cross-border marketplace Tmall Global now incorporates controls to manage the supply-chain process including blockchain technology and product tagging with unique QR codes. Blockchain is a public digital ledger shared among users, and information entered cannot be doctored or altered. In the context of food safety, the technology can ensure that each stage of the farm-to-table journey is recorded and open to scrutiny.
For food producers, the use of blockchain means that any unwanted actions, such as using fake ingredients, will be detected much faster. In the event of food contamination, such as the recent romaine lettuce scandal in the U.S., retailers can quickly retrace the supply chain and remove the specific batch instead of recalling the entire shipment.
The technology not only helps curb counterfeit food, it also gives consumers greater assurance that what they are consuming is exactly what’s stated on the package, say the companies.
The launch is a follow-up to Alibaba’s announcement last year what it would collaborate with PricewaterhouseCoopers (PwC) in Australia and New Zealand to help implement a framework to ensure product authenticity and provide a trusted marketplace for consumers.
“Food fraud is a significant global challenge, particularly with the growing complexity of supply chains,” said Alvin Liu, general manager of Tmall Import & Export. “In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both consumers and merchants.”
According to Michigan State University, fake food products drain $40 billion from the global food industry each year. An estimated 40 percent of the food companies find the traditional approach insufficient to counter fraudulent activities, and 39 percent say their items are easy targets for counterfeiters, said PwC.