Security Matters forms JV for alcohol anti-counterfeiting

Australia’s Security Matters (SMX) has set up a joint venture with beverage manufacturer and distributor Global Bevco to complete the development of a technology to prevent alcohol counterfeiting and adulteration.

The 50:50 venture – called Security Matters Beverages – will license SMX’ patented supply chain integrity and asset tracking technology, which combines a physical marker system with a digital, blockchain-based system to allow goods to be followed securely from manufacturer to consumer.

SMX has been developing its platform for use in other industries like fast-movng consumer goods, electronics, and medical devices, but reckons setting up the JV will help it advance the platform for use to tackle counterfeit alcohol, a problem estimated to have a value of approximately $500bn a year.

The technology relies on a liquid chemical ‘barcoding’ system based on a molecule sequence marking method that it claims is unhackable and can be implemented on the production line. The codes are identified using a dedicated, proprietary reader.

Work is already underway at the JV to develop global standards for applying tech platform to alcoholic products, particularly wine, and to test its performance in this application.

Global Bevco director Peter Yates said that the sale of counterfeit wine is “a significant threat to the industry that occurs at all price points and is particularly prevalent in China.”

It is also “a social problem that deprives communities of the value they have created, especially growers of premium product,” he added.

China is a key target market for Global Bevco, and the third largest wine importing country in the world, having risen up the rankings in recent years thanks to rising incomes, increased consumption and an appetite for overseas brands which are viewed as prestige products.

The rising popularity has however given rise to persistent fraud and – for importing countries like France, Italy and Australia – fake wines steal market share and can damage brand reputation.