Fighting counterfeit products with tamper-proof tech

Food fraud alone is a multi-billion dollar problem worldwide. According to the latest statistics, we lose $50 billion a year on all kinds of food fraud, with counterfeit food alone costing up to $30 billion. On top of the negative economic impact, the damage and even deadly cost to our health makes it a pressing issue due to contaminated or mislabeled food causing hundreds of deaths and hospitalizations. But despite relevant legislation and worldwide police crackdown operations on substandard and fake food products — counterfeiters still manage to slip their products into the mass market.

The uncertainty in food supply chains

Trade in general has become more complex with globalization — the exchange of goods isn’t as simple as a direct exchange anymore. Food goes through an extensive process: growth, cultivation and harvest of raw ingredients; cleaning and processing of these ingredients; packaging, labeling and identification of possible allergens; transportation, import and export of food products; food preparation practices; to delivery and storage before the final products go on retail. Add the fact that the same raw ingredients for a single product can come from different sources, and you have a complex supply chain to track.

There are a myriad ways food can be contaminated, tampered with or become substandard down the supply chain. Illegal imports, mislabeled ingredients, even something as simple as lying about where a raw ingredient came from could have multiple repercussions.

Just how bad is food fraud worldwide? The World Health Organization (WHO) reports that an estimated 600 million people — that’s 1 in 10 getting sick after eating contaminated or substandard food, with ~420,000 dying due to some form of food fraud each year.

From food to medical supply chains

According to a 2018 pharmaceutical market report, the pharmaceutical industry is approximately worth $341 billion in North America alone — the biggest pharmaceutical market, holding 36.5% lof the global pharmaceutical market. Asia comes in second, holding 21.5% of the global market. A market this big attracts counterfeiters looking to profit.

The WHO reports that 1 in 10 medicines in poor countries are counterfeit medicines, and that $30 billion is spent worldwide buying these fake medication. This has led to the deaths of hundreds of thousands of children all over the world; for instance, between 72,000 and 169,000 children are or could be dying after taking counterfeit pneumonia medication. Counterfeit medicines include substandard and falsified medication.

Enable traceability to determine authenticity

With these challenges to food and medicine manufacturers and equally troubling fraud statistics — there is a need to come up with a solution that enables and delivers full product transparency. Consumers should be able to purchase a product, drill down and track its journey back along the manufacturing and supply chain.

This traceable history solution needs to start as far back as possible, starting with the raw ingredient suppliers all the way up to when the finished product reaches grocery shelves — and lands on our tables. To do this, we can build on distributed digital ledger technology to deliver product quality, transparency and safety.

A tamper-proof record

While distributed digital ledger technology may be more readily associated with finance because of its strong ties with cryptocurrencies, its purpose isn’t limited to the creation of new digital currencies. distributed digital ledger technology serves as a decentralized ledger, allowing multiple sources to add blocks of information in a tamper-resistant way. Unlike Enterprise Resource Planning (ERP) software, which gives users limited view of the supply chain, distributed digital ledger lets users access all the blocks of information stored within the chain, providing the transparency needed to avoid fraud across all levels of the supply chain.

What makes distributed digital ledger technology more secure and more reliable as a verification source is decentralization. Before a supplier can add information (a block), there has to be a consensus from the other participants in the system.

Every time suppliers exchange goods, the transaction can be recorded on the system as a block. As raw ingredients make their way down the supply chain, all changes and exchanges are recorded as new blocks that consumers can trace back to later on. The information recorded is permanent — ideally, no one can tamper with a block that has already been written. With this system, it is easier to track where errors in production may happen or where standards may not be met, making food and healthcare products safer for the mass consumers.

This is what SparX aims to do: use distributed digital ledger technology to track the food and medicine supply chain — standing tall as an independent organization providing businesses and the public with the means to enable transparency, traceability, safety and accountability to keep everyone safe.

Through the use of a distributed digital ledger, we created a decentralized application, SparX, to bridge communication gaps between manufacturers, distributors, retailers, and consumers. Aside from using this technology, we’re also involving consumers and users to make our applications and information more accurate and independent as possible.

To know more, visit SparXchain.io today.

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