ALIBABA PILOTS PRODUCT TRIAL ON BLOCKCHAIN TRACEABILITY SYSTEM

Blackmores and Fonterra have commenced a pilot to ship products to China in the first trial of Alibaba's Food Trust Framework, which uses blockchain technology to improve supply chain traceability and transparency. Piloted in Australia and New Zealand, the Framework could form the basis of a supply chain model applied across all of Alibaba Group's e-commerce marketplaces.

Taking place in Auckland, New Zealand, and hosted by CEO of Alibaba Group, Daniel Zhang, the pilot follows Alibaba’s announcement last year that it would engage PwC in Australia, New Zealand and China as a service provider to advise the company on the set up of a framework to protect product authenticity and provide a safe and trusted marketplace for consumers. Alibaba also signed a Memorandum of Understanding last year partnering with Blackmores, Australia Post, Fonterra and New Zealand Post in the Framework.

Blackmores and Fonterra are the first companies to trial the Food Trust Framework, shipping products from Australia and New Zealand to China. Blackmores is shipping Odorless Fish Oil while Fonterra is shipping Anchor dairy products to consumers who purchase them on Alibaba’s Tmall Global platform. Once the pilot is complete and if successful, the Framework could form the basis of a global supply chain model applied across all of Alibaba Group’s e-commerce markets.

The Framework aims to achieve end-to-end supply chain traceability and transparency to enhance consumer confidence and build a trusted environment for cross-border trade across Alibaba’s Tmall Global platform by incorporating a range of standards and controls to manage the supply chain process, including blockchain technology and product tagging with unique QR codes. These technologies are designed to authenticate, verify, record and provide ongoing reporting of the transfer of ownership and provision of products and goods.

Recognisng the significance and importance of an independent view as to the operation and application of the Framework, PwC plans to provide services to the participants. An independent assessment of the Framework aims to provide the visibility and transparency of the level of adherence to the Framework by participants in the supply chain, including consideration of existing reporting and practices.

The Framework represents the next step in Alibaba’s vision to build the future infrastructure of commerce and will help give confidence to producers, merchants, logistics providers and consumers alike.

Speaking at the launch in Auckland, Alibaba Group’s Alvin Liu, General Manager of Tmall Import & Export said: “Food fraud is a significant global challenge, particularly with the growing complexity of supply chains. 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 end consumers and merchants.”

Food fraud costs the global food industry an estimated US$40bn each year, according to research from the Michigan State University. PwC has also estimated that 40 percent of food companies find food fraud difficult to detect with current methods, and 39 percent think their products are easy to counterfeit.

“Blackmores goes to extraordinary lengths to have visibility over our supply chain and each of our products passes 30 tests and checks before it is released for sale.  So we’re exploring ways to leverage the technology and data that can provide our consumers with assurance that their trust in our products is well-placed,” said Richard Henfrey, Blackmores Chief Executive Officer.  “Our commitment to quality doesn’t end in our distribution centre and we need to give consumers confidence in the products they purchase on e-commerce platforms.”

“Fonterra delivers global best practice supply chain traceability through our existing technology. Given the potential of emerging tech, including blockchain, we want to be at the forefront of developing food quality and safety standards across the supply chain. In China and many other markets, we know consumers want to be able to trace the products they purchase online, so we welcome being a part of creating a globally respected framework that protects the reputation of food companies and gives greater value and consumer confidence," said Fonterra President Greater China, Christina Zhu.

Australia Post’s Group Chief Operating Officer, Bob Black said: “We safeguard the transport of high-quality, genuine products to our customers, which is why we’re so committed to developing the Food Trust Framework. Through our international logistics network, Australia Post delivers to more than 190 countries around the world. We’re continuously investing in technology and infrastructure, and building strong partnerships to guarantee our global ecosystem is world-class to exceed customer demands.”

“This authenticated platform will increase New Zealand’s already strong reputation of providing clean, green and safe products in China. NZ Post is delighted our trusted, reliable, and visible supply chain and network have been chosen to give confidence to Chinese consumers that they are getting authenticated and genuine Kiwi products. Consumers will be able to track their purchase from paddock to plate, with full and complete knowledge of its origin and journey with us," said David Walsh, CEO of NZ Post.