Pilot shows blockchain can secure wine supply chain

A bottle of wine has been fully tracked from South Australia to China using blockchain in one of the world's largest supply chain security trials.

Instigated by Australian blockchain firm TBSx3, the bottle of wine produced by Ius was successfully tracked and verified along its 8,100km journey with various handovers starting from Coonawarra in South Australia to the port of Qingdao in north-eastern China, The Australian reported.

Freight companies DP World Australia, DB Schenker and Hamburg Sud were involved in the trial, while consultancy KPMG provided advice and verified the handovers.

TBSx3 founder Mark Toohey said a "bits and pieces security mosaic" was no longer enough for the complex global supply chain where receiving genuine products was increasingly important in the face of a growing illicit counterfeit market.

"A 'whole of chain' global supply chain security environment that has a military precision and force, and that can constantly monitor product movements anywhere at any time, is an absolute necessity," he said.

TBSx3's blockchain-based verification system involves 44 alphanumeric character security cryptography as opposed to the more traditional six-digit public cryptography. This "military-grade security" uses a distributed blockchain ledger that increases transparency and manages each link along the supply chain and verifies the product at its final destination.

Toohey said the trial, which successfully secured the whole supply chain, represented a first step in combatting the trade of fake goods. Further trials to test the "robustness" of the system are due to take place.

Anthony Bertini, TBSx3 chairman, said: "In terms of the numbers of partners simultaneously involved and the challenges posed for resolution of integration with multiple existing proprietary security systems, we believe this can be developed to become a new security benchmark."

DP World Australia welcomed the technology. The firm's head Paul Scurrah told The Australian: "We operate under very safe security systems but we always need to stay one step ahead. We are keen to explore how we can avoid the trench warfare of centralised data systems with massive hacker attacks and equally massive static defences, which has characterised so much of online digitised security – up to now. The TBSx3 trial is an important step in testing how new technology may strengthen the security of cargo and we understand the scale and intricacy of the security challenge."

Blockchain – essentially a digital database of time-stamped records or events and is the tech underpinning the digital currency bitcoin – is increasingly being explored as a means to thwart counterfeiters' efforts at mimicking well-known brands and selling them to an unwitting public. Last year, blockchain was used to certify and secure the provenance of a 2001 bottle of Margaux fine wine, while business advisory firm EY along with tech start up EZLab has developed a separate blockchain authentication system for wine.

China e-commerce giant Alibaba has also jumped on the anti-counterfeiting blockchain bandwagon with plans to run a pilot scheme to fight food fraud on its platform.

Meanwhile, a project using the tech is being planned by the Hyperledger collaborative effort for the pharmaceutical industry.

A Goldman Sachs report at the start of last year noted that blockchain could be the "golden egg" as a verification technology for numerous industries fighting fakes.

In response to the TBSx3 trial, Australia's industry, innovation and science minister Arthur Sinodinos told Australasian Transport News that blockchain had "great potential" for all types of businesses.

"It promises to reduce costs, create new market opportunities and transform industries. Importantly, the technology provides a new opportunity for Australian exporters and their customers to verify the authenticity of their products, protecting the reputations and brands of both Australia and Australian business."