Food safety incidents in China have received increased international media scrutiny following the reform and opening of the country, and its joining the World Trade Organization. Urban areas have become more aware of food safety as their incomes rise. Food safety agencies in China have overlapping duties. The 2008 Chinese milk scandal received the most attention among food safety incidents.
The Australian operation of Alibaba Group is exploring new ways to address food fraud risk by using the technology behind bitcoin to track the product life cycle of food products.
Alibaba Australia on Friday teamed up with several partners, including PricewaterhouseCoopers and Blackmores, the Australian manufacturer of nutritional supplements, to establish a food trust framework to curb the spread of counterfeit food online.
The project is designed to enhance traceability models and introduce new technologies to mitigate the risk of counterfeit and fraudulent 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,” Alibaba, which owns the South China Morning Post, said in a statement on Friday.
Blockchain technologies are used to track the transactions of bitcoin and other cryptocurrencies.
Ant Financial, the online finance major controlled by Alibaba’s billionaire founder Jack Ma, has since last year been using blockchain technology to record transactions of charitable donations in China in a bid to improve accountability of the country’s philanthropic organisations.
Alibaba envisages that the Australian pilot run of the food trust framework will form the basis of a global supply chain model that can be applied across all of Alibaba Group’s e-commerce markets.
“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,” Maggie Zhou, managing director of Alibaba Group Australia and New Zealand, said in a statement.
Research conducted by Michigan State University found that fraud costs the global food industry an estimated US$40 billion each year.
A study by PwC found that 39 per cent of food companies globally said it was easy to fake their food products and 42 per cent believe there is no method for detecting fraud beyond standard food checks.