Alibaba to trial blockchain technology in food supply chains

Internet Retailing

24th Mar 2017

Alibaba Australia has announced it will work with PricewaterhouseCoopers to explore the use of blockchain technology in food supply chains, setting out its intentions in a memorandum of understanding today.

Blackmores and Australia Post are also involved in the pilot project, which aims to develop a framework to address food fraud risk and provide the basis for improvement in food trust practices and integrity.

The ultimate goal is to create a global supply chain model that can be applied across all of Alibaba’s e-commerce markets.

The project will enhance traceability models and introduce new technologies to mitigate the risk of counterfeit and fraudulent food products, including the development of a pilot solution model for vendors across the supply chain.

Originally developed to track the transfer of Bitcoin and other cryptocurrencies, blockchain technology is now finding wider application in many different industries.

Often referred to as the “internet of trust”, blockchain technology is designed authenticate, verify, permanently record and provide ongoing reporting in relation to the transfer of ownership and providence of goods.

Maggie Zhou, Alibaba’s managing director in ANZ, said the project puts Alibaba on the front lines of a serious global issue.

“Food fraud is a serious global issue that not only costs the food industry billions every year, but puts consumers’ health at risk.

“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,” she said.

Research conducted by Michigan State University shows fraud costs the global food industry an estimated US$40 billion each year.

Furthermore, 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,” PwC Australia CEO Luke Sayers said.

“Global consumers expect instant gratification and when it comes to food, that means any time, any place. As a result, food supply chains have gone global which creates added complexity and opacity. We envisage our services will assist Alibaba to explore ways it can address this important issue.”

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

Bob Black, StarTrack’s CEO, said Australia Post and StarTrack play an important role facilitating and growing trade between Australian and Chinese businesses and consumers,

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.