Alibaba (Australia), a member of Alibaba Group, announced today that it will work to build better trust in the supply chain of food products in Australia, New Zealand and China; a memorandum of understanding was signed today setting out Alibaba’s intentions and the involvement of  Australia Post and Blackmores.

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.

Alibaba’s desire is to develop a framework to address food fraud risk and provide the basis for improvement in food trust practices and integrity. It is envisaged that this framework will be piloted in Australia and form the basis of a global supply chain model that can be applied across all of Alibaba Group’s e-commerce markets.

The project will 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.

Blockchain technologies, often referred to as the “internet of trust”, were known to be originally developed to publicly and irrefutably track the transfer of Bitcoin and other cryptocurrencies. These technologies are designed to authenticate, verify, permanently record and provide ongoing reporting in relation to the transfer of ownership and providence of goods, and are now finding much wider application in many different industries. 

Speaking at the signing of the ceremony, Maggie Zhou, Managing Director of Alibaba Group Australia and New Zealand, said: “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.” 

Research conducted by Michigan State University shows fraud costs the global food industry an estimated US $40billion each year. Furthermore, PwC research shows 39 percent of food companies say it is easy to fake their food products and 42 percent believe there is no method for detecting fraud, beyond standard food checks.  

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

Bob Black, Chief Executive Officer, StarTrack (a business of Australia Post) said: “Australia Post and StarTrack’s fast, secure and reliable logistics framework will support this innovative program to safeguard the transport of high-quality, genuine Australian products into the hands of customers.  We play an important role facilitating and growing trade between Australian and Chinese businesses and consumers.”

Speaking at the signing ceremony Blackmores Chief Executive Officer, Christine Holgate said: “We are humbled that our consumers continue to recognise us as a most trusted brand, and at the heart of trust is quality.  Every one of our products passes more than 30 quality checks and tests before being released for sale. This initiative with Alibaba Group, PwC and Australia Post will provide even greater confidence for consumers purchasing our products through e-commerce channels. We look forward to making this process and our supply chain more visible and transparent to our consumers in China as part of this project.”

Australia Post’s general manager parcels and StarTrack CEO, Bob Black, said the project would help guarantee genuine products arrive safely into the hands of Chinese consumers. “We are delighted Alibaba has invited us to create an innovative platform, which will track food from paddock to plate, strengthening the supply chain.”

“The initiative will leverage our secure, reliable and fast service to support the authentication of Australian products bound for the Chinese market. Our food producers have a global reputation as being a clean, green and safe provider of food and we are pleased to help deliver a solution to enhance the integrity of their produce.”

The project will explore new technologies, including blockchain technology, a decentralised and highly available database, which could obtain crucial details from suppliers about where and how their food was grown and map its journey across the supply chain. The technology has the potential to enable up-to-date audits, increasing transparency between producers and consumers.

Food fraud is known to be one of the biggest issues facing the global food industry, considering the potential health risks associated with adulteration and loss of trust from consumers and governments. In recent years counterfeiters have targeted popular Australian products such as health supplements, beer and wine, honey and cherries.

Australia Post’s relationship with Alibaba has already enabled Australian businesses to sell their products across Alibaba’s key platforms since 2014, including Tmall Global, Taobao Global and 1688.com.

The latest partnership comes after Australia Post and Alibaba signed an agreement last month to extend Australia Post online storefronts beyond China to Malaysia, Singapore and Indonesia. The storefronts will operate on South-East Asia’s leading eCommerce network Lazada, which Alibaba has a majority stake, creating a powerful online platform for Australian businesses to sell products to the millions of consumers across the region.