Fake Liquor, Original bottle: Solving for Counterfeiting using Crypto codes

Has your favorite liquor ever tasted different than usual?  Daily news is flooded with articles around counterfeiting in various industries across cosmetics, nutrition to alcohol – counterfeiting is a major threat impacting each and every one of us.

During the COVID-19 lockdown, the problem of counterfeit further aggravated due to a gap in demand and supply. In the last one month alone, almost every day a seizure had been reported in India related to smuggled or illicit liquor. Consumers rely on purchasing liquor from a trusted or authorized seller that is rechecking the packaging and security seal. It is no longer possible to trust in the retailers supply chain given the alarming growth witnessed in counterfeiting. 

Alcohol counterfeiting in particular has become pervasive, fueled by the sudden explosion of ecommerce sites over the past decade or so. It is estimated that a third of all alcohol production worldwide is illicit, and that number rises to a half in places such as Africa and China. This means billions of people worldwide are put at massive risk of health complications whenever they choose to have an alcoholic drink. Brands therefore need to take serious action in product authentication technologies available to protect their brands.

Counterfeiters have taken note of the profits to be had by taking genuine bottles and re-filling them with either their cheaply-made, dangerous swill, or with lower-quality alcohol and passing them off as authentic products to unsuspecting consumers. Worse still, counterfeiters are also re-making original looking bottles and filling it with counterfeit alcohol, which goes undetected by even the brand protection teams at global alcohol companies. 

So how are counterfeiters getting their hands on authentic bottles? They primarily use the internet, of course. A few minutes of searching on ecommerce sites found bottles available for Bacardi, Grey Goose, Absolut, Johnny Walker and many, many more brands.

In addition, offline networks are still very much involved in this process. Re-acquiring a legitimate bottle after it’s been sold and finished can become a second income for many people. In some cases, bar staff who sell full bottles to customers within the premises wait until the bottle has been finished to collect the now-empty bottle. Vendors will offer to sell high-end drinks to venues at a discount, so long as the venue is willing to return the bottles after they’ve been sold to consumers.

Less-sophisticated networks of alcohol counterfeiting, especially for those making fake versions of more low-end drinks, tend to acquire the bottles they use from bins, which are then quickly re-labeled, filled with the bootleg drink and resold. Brand protection teams can rarely take action against such issues because they are not able to detect the difference between genuine and fake products. Therefore smart packaging solutions are rapidly gaining in popularity within the Wine and Beverages segment. 

Brands have been trying to tackle this issue of repackaging and counterfeit by introducing stringent checks and balances over the manufacturing and supply chain to make sure they get back the original bottles, complicated seals and special markings to identify the originals, etc. So far, these have not proven to control the counterfeit levels in market.

In Delhi, India government excise department verifies the genuineness of the Liquor purchased in the past month where the consumers can use “mLiquorSaleCheck” app to scan or type the 28-digit barcode number for product authentication. This tamper proof label carrying the details are affixed on bottle caps which ensure visible tampering evidence.

Although a great step by the Delhi excise department, as the QR code on packaging leads to the same website and the barcode number is already in the system, it becomes easy for the counterfeiter to replicate such labels and simply replace the original with a look alike.

So, What Can the Brands Do for Brand Protection?

Smart packaging technology has come a long way since the age of holograms and labels. In fact, smart packaging has also improved from the simple QR code on packaging. Thanks to tools such as anti-theft labels, NFC tags, machine vision, and AI, customized smart packaging solutions are enabling manufacturers and consumers to enjoy a significant control over their liquors origin, manufacturing and supply chain.

Supply Chain Traceability and Visibility with Cryptocodes

Digitization has brought with it the ability to map out the journey of each unit of product in your supply chain providing you as a brand owner the ability to not just verify the product but also if it was made on your production line. Crypto codes can also help in understand the raw materials associated with the product, inventory management, product recalls, reverse logistics, protect from product diversions and improve supply chain efficiency. 

Liquor brands with complaints of “estimated sales are more than bottles manufactured” can easily map out infiltration channels in their own supply chain and give the consumers ability to choose where their product comes from and pay for the real deal.

E-fingerprinting Using Machine Vision and AI

The new E-fingerprinting technology based on machine vision and Artificial Intelligence is a means to detect counterfeiting circulating in the market without alarming consumers. This technology simply generates a unique e-fingerprint against each unit of product manufactured on your production line and matches the data against every future scan made by investigators. This technology needs no additional label applications such as RFID tags or QR codes on packaging and relies on the current packaging that brands already have and hence can easily be implemented even with the stringent laws governing liquor labels.

In order to understand more about these ground breaking technologies and how to use them to your advantage, connect with Sepio Solutions by emailing on [email protected]