Alibaba (Australia) Company Pty. Ltd. will engage PwC firms in New Zealand, Australia and China to provide services and advice relating to Alibaba’s intention to build greater trust in food—right across the supply chain. A memorandum of understanding was signed today setting out Alibaba’s intentions and the involvement of Fonterra and NZ Post.

The signing of the agreement took place at a ceremony at PwC Tower in Auckland.

The aim of the partnership is to develop a framework to lead food quality and safety standards and provide the basis for improvement in food trust practices and integrity. It is envisaged that this framework will be piloted in Australia and New Zealand and form the basis of a global supply chain model that will be applied across all of Alibaba Group’s markets.

The project will enhance traceability models and introduce new technologies to stop the production of counterfeit and fraudulent food products. This will include the development of a pilot blockchain technologies solution model to be used by participants across the supply chain.

Blockchain technologies, often referred to as the “internet of trust”, were originally developed to publicly and irrefutably track the transfer of Bitcoin and other cryptocurrencies. These technologies 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 safety and quality 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 memorandum 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 New Zealand and Australia’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 New Zealand and Australian 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 USD40billion 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.

PwC NZ Partner and Global Food Trust leader, Craig Armitage says: “Food trust and integrity are among PwC’s global priorities and are of particular importance for PwC New Zealand because of our reliance on food export. We have a global team dedicated to developing world class solutions to minimizing the risks to supply chains and maintaining their integrity and we are very proud to be providing services to Alibaba that will help them to address this  important issue.

“Consumer safety and trust are non-negotiable when it comes to food fraud prevention,” says Mr Armitage. “This pilot project will access the latest crypto-technology to address the growing need of food consumers who want quality products delivered safely, securely and on time.”

Fonterra’s Chief Operating Officer Global Consumer and Foodservice, Jacqueline Chow, said the partnership would give Chinese consumers confidence in the products they are buying.

“We are pleased Alibaba has invited us to develop an innovative platform, which will strengthen the supply chain. Connecting our Co-operative with consumers and being able to reassure them about the quality and safety of our products is fundamental to being the most trusted source of dairy nutrition.

“The project will complement the world leading electronic product traceability work we introduced last year. It is all about providing consumers with the opportunity to have a personal connection with their food and let them know more about the source of their food, how it is produced and how it moves through the supply chain,” she said.

New Zealand Post chief executive Sir Brian Roche said the authentication platform would add extra value to the already strong reputation of New Zealand’s clean, green and safe products in China.

“NZ Post has worked closely with Alibaba over the past three years and we are delighted they have chosen our trusted, reliable and visible supply chain to give confidence to Chinese consumers that they are getting the genuine Kiwi article.”