Anti-Counterfeiting in the Alcobev Industry
Indian Alcobev Industry Overview
Over the decade ending 2016, India’s annual per capita spirits consumption more than doubled to 5.7 liter, according to a World Health Organization. Over the years, higher disposable incomes, change in attitudes towards alcohol consumption, and the proliferation of an eating-out culture have spurred demand.
The Problem: What exactly are we producing and drinking?
The growing popularity and rocketing value of brands enable – through smart marketing – to convert a rather simple and easy to produce designer item into an expensive object of desire – hence is also a golden opportunity for imitators (counterfeits) to exploit consumers’ wishes without having to pay a high price.
Thus, the question – “What exactly are we producing and drinking” – should be given top most priority by the Consumers, Government and Industry.
On an average, India reported 2,60,000 alcohol-related deaths annually caused by ailments and road accidents. 15 people die every day – or one every 96 minutes – from the effects of drinking alcohol, reveals an India Spend analysis of 2013 National Crime Records Bureau (NCRB) data, the latest available.
Companies end up competing not only with visible rivals but also have to face unfair competition from ‘unofficial’ contenders. They gradually lose sales, market share, revenue. Their brand risks losing value and even company reputation may suffer. In addition, companies may have to bear the cost of anti-counterfeiting measures or legal liability.
Government interests are hurt through the loss of job opportunities and tax revenue, lower GDP and investment. There is also increasing evidence that organized crime and terrorists have become involved in the production and distribution of counterfeit goods, which provides them with funds for their illicit activities and undermines state authority.
What can we do against Counterfeiting of Alcohol?
In the June 2018 report “Alcohol in the Shadow Economy’, International Alliance for Responsible Drinking (IARD) prescribed how various stake holders could take complimentary and independent actions to fight against the counterfeit liquors. While many of the action items will take time to see light of the day, here we will focus on the few items which are possible to implement quickly and will have a large impact:
- Technical innovation around authentication
- Public education about new advances in labelling and packaging
Technical innovation around authentication
In Alcobev industry, choosing the most appropriate anti-counterfeiting technology has been made enormously complex by claims of invulnerability (often proven wrong, though) of various competing technologies, lack of compatibility of statute in different geographies, divergent views between various industry associations in same product category etc.
Broadly, anti-counterfeiting technology is evolving to be more effective by meeting the following criteria:
- Easy to Use. Even a consumer or an inspecting person with minimal training and inexpensive gadget should be able to identify genuineness.
- Self-Destructive. The protection element must guarantee that any attempt of its removal and placing on another package will result in its irreversible destruction.
- Difficult to Clone. It is critical that counterfeiters are not able to create something similar. Meeting this requirement is difficult as explained above.
- Combination of Overt (Open to public) and Covert (Hidden elements) to enable the inspecting person to go deeper in case of suspicion.
- Off-line availability, in case digital technology which required tapping/ scanning the anti-counterfeit technology embedded in the bottle and the scanned information is passed on to a cloud server to complete the authentication process (e.g. QR Code, NFC Tag etc.)
- Real Time Track & Trace capability, to prevent supply chain leakage (e.g. mixing genuine products with counterfeits, faked returned goods etc.), quick counter measure after detection of grey market (product, location, time).
- Compliance to the local legislation on labelling, excise tax stamp and to international standards like NIST, ISO 22382 & 16678, GS1 and PCI-DSS (if applicable).