How can companies exporting to China ensure that only their product sells under their own brand in the market, and not lesser quality rip-offs?
China is not only one of the world’s biggest markets but it is also one of the world’s counterfeiting “superpowers”, according to the UN Office and Drugs and Crime, which estimates that almost 70% of all counterfeits seized globally originate in the country.
Counterfeiting is clearly a big problem and one from which meat exporters are not immune. Last year leading Australian Wagyu producer David Blackmore pulled his high-end, premium product from China after discovering counterfeit products were being passed off as his beef, and fearing the damage it would do to his brand reputation in the market.
However, potential solutions appear to be emerging.
Beef Central recently reported on the product developed by Chinese-based technology company YPB which involves embedding invisible and safe trace elements into imported products. With a simple wave of an electronic scanner, the integrity of the product can be verified at any point throughout the supply chain.
Another company offering a solution to combatting the counterfeifters was highlighted to delegates at last week’s Ag in the Asian Century conference in Toowoomba.
“Authenticateit” is a cloud-based serialisation and track and trace platform designed to help brand owners and manufacturers – from big corporates to small SMEs – protect their brand in the market while giving consumers confidence that the product they are buying is the real deal, not a lookalike, inferior quality rip-off.
Company founder and CEO Gennady Volchek explained how it works to Beef Central.
“At production when you label your packaging, you add a GS1 Datametrics code, which uniquely identifies your product,” he said.
“It gives it an identity.
“Then as that product moves through the supply chain and is sold to a distributor and another distributor and then to point of sale, all those transactions are recorded in the cloud track and trace system, so we know where it was made and we will know where it ends up.
“And then the consumer, before they make a purchase, they can scan this Datametrics code (using a free App on their smart phones) and confirm it is the genuine product.
“So basically they have complete visibility of where it has come from. If it has been substituted somewhere, obviously the link will be broken and the consumer will not get the confirmation.”
Implementation of serialisation and traceability also speeds up border clearance for brands due to the integration Authenticateit has with World Customs Organisation and relationships with CIQ China.
Authenticateit was in development from 2011 and became available for brands in different industry sectors from 2014. Mr Volchek said there are now 20 Australian and international brands using the company to protect the integrity of their brands globally, including beef exporters Sanger and Bindaree.
The bigger and more successful the brand, the more likely it was that counterfeiters would attempt to copy it, Mr Volchek said.
“That is obviously a big problem, you can spend a lot of money developing a brand, so it is important to ensure you retain the ownership and that others don’t take advantage of your investment.”
Not only does it make commercial sense to protect your brand in Asia, it would also soon become a legal requirement to do so, Mr Volchek said.
From the start of October – which is today – it is now mandatory for food producers in China to use track and trace systems on their product.
“If you are exporter, they expect that next year they will make it mandatory,” Mr Volchek said.
“So there are too sides to it – it is a compliance issue, and secondly you want consumers to know what they buy.”
Finding ways to protect the integrity of brands in China was a hot topic of discussion during panel sessions at last week’s conference.
Dirk Pretorius, the CEO of iconic Australian dairy brand Frosty Boy, told the conference that the company has had to remain extremely vigilant to protect its brand in China.
“We are registering the Chinese name for Frosty Boy, but that doesn’t mean you aren’t going to see your brand get used somewhere.
“We have had an experience where a frosty boy factory that opened up in China under the same brand and even approached customers as the local representative factory. You have just got to act and make sure you get them closed down.”