Anti-Counterfeiting – When do we start to move into the right direction?

The Product Authentication & Brand Security Conference 2012, which takes place this year on September 10-11 in Chicago, is branded by its organiser AWA as offering the latest trends and solutions in Anti-Counterfeiting. This year, speakers will address in particular fraud activity in foods and wines, the imaging supplies industry, and premium sports shoes.

Brand owners interested in learning more about the challenges and solutions of protecting their products from counterfeiting and diversion are invited to attend the conference without charge.

I wonder whether the anti-counterfeiting industry with all its hi-tech solutions finally has accepted or will accept and  incorporate the one and only ingredient, they always have left out, neglected if you want, and as such never solved or will solve the problem. That ingredient, crucial for success, is the consumer.
I have argued before that the consumer is the number one person who really has an interest in detecting counterfeited products the moment he wants to buy.

Many products targeted by counterfeiters are very easy to copy due to their simple-to-copy packaging. That’s not the case with perfumes and up-scale alcohol beverages, where designers have all the freedom to create the most fantastic and sometimes exclusive bottles.

But we are talking about the consumer goods of quality brands, ordinary consumer goods of high quality, every consumer finds in the up-scale supermarkets and department stores.
The danger of being illegally copied is not only the undifferentiated simple-to-copy packaging, but also confusion.

In 2009 (the most recent data I have), worldwide 274,273 new products were introduced. This is 22,856 packages per month, 761 per day or 32 per hour.
This wave of new products for ordinary consumer products creates consumer confusion as a wide variety of high-quality brand products are constantly changing their image or are re-introduced to attract the potential buyer. Marketing slogans as New Recipe, Improved Packaging, etc., are the order of the day.

Confusion, a strong ally of the counterfeiter, occurs when the consumer is confronted with many different, ever-changing versions of the packaging. How is the consumer to know when a new product packaging isn’t legitimate? Just do a Google search for some upscale brand to discover how many different bottles and packages the brand is carrying, and with what frequency new ones are introduced.
Look at the supermarket shelves, wait 4 months and look again. There is a completely different appearance of obviously the same products.

Let’s be clear, counterfeiting isn’t restricted to the high-end consumer products and not even to the pharmaceutical and medical area. The problem is already signalled with ordinary consumer products from well-known brands. What is simpler? I create a simple low-quality soup, label it as Campbell’s or Heinz, and all the profit is mine.

And the consumer? He has nothing other in his hands to qualify a product as genuine, than his confidence in the retailer. As counterfeit products are unstoppably turning up on shop shelves with fakes simply being knock-offs, relabelled sister products, a mix of fake and genuine product, or a refill masquerading as a virgin product, the consumer may become victim of a do-it-yourself counterfeiter or of a vertically integrated international operating counterfeiting organization. The consumer’s trusted store could be an unsuspecting conduit or complicit in the crime.
One thing is clear: the problem is getting worse.

For a counterfeiter, success is having every non-complicit person handling the product downstream to accept the fakes as legitimate products. The products do not need to be exact copies, only good enough to fool those handling or buying the goods.

To this problem the industry answers with a most fantastic, mouth-watering technological and intellectual tour-de-force, entirely forgetting, what the real goal is in its battle against counterfeiting. The goal should be the consumer and not exposing the counterfeiter. A common misconception is that a counterfeiter will quit the practice if he gets caught ……..

I once read an interview in which a vice-president of operations argued why he wanted to incorporate a batch code into the diversion-tracking code.
[and I quote]
“Removing a diversion-tracking code so that product can be diverted is not illegal, but defacing a batch code is. That takes it out of civil court and puts it into the criminal court system. That’s huge, because in criminal court, the identity of the distributor who is doing the diverting will be revealed. That doesn’t happen in civil court cases”.
[end of quote]

And that is exactly what happens with the ‘war against drugs’. Catch a guy, get him convicted, turn around and discover that he is replaced by ten others. Counterfeiting doesn’t go away by putting the tugs in prison.

All hi-tech solutions, as inks, authentication, tracking and tracing are useless. You can only track and trace your own genuine products, not the counterfeited ones as you don’t have their codes. So, what happens? You discover a non-coded fake. What does it give you? In the meantime consumers have bought a fake and are disappointed by the quality, taste, fragrance and never buy your brand again.

The industry has to go back to the basics. And the basics are its consumers. When starts the industry to realize that the solution to counterfeiting is the consumer. That means that the industry, suffering under counterfeiting attacks, has to supply a tool to the consumer. A way the consumer can easily verify whether the product is genuine or false. All covert security measures are useless and are only of interest to the company itself, the consumer needs an overt system which enables him to check the authenticity of the product.

Back to the basics implies a simple, but secure tool the consumer can handle and always has available.

So what is the answer?
Why don’t I leave it to the smartphone and scanning-apps? Several reasons.

First: Consumers are often let down when scanning barcodes. A study of CapGemini showed that 91% of mobile barcode scans returned incorrect product descriptions and 75% returned no data, while 40% of the processed requests through a trustworthy application could not be authoritatively connected to a product. In this situation the study found that 38% of consumers will not purchase a product if they don’t trust the information they get and 35% may stop using an app if they get the wrong information.

Second: 2D barcodes, QR and AR codes, as well as anti-counterfeiting codes can easily be faked and if the consumer has to use his smartphone to scan a code, the downloaded app might direct him to a fake company website, being the website of the counterfeiter confirming the authenticity of the product.

So what to do, when the smartphone isn’t the trustworthy tool to supply the correct information and apps can be made and offered by anybody, including the counterfeiter.

We all are acquainted with the barcode reader, strategically positioned in supermarkets and department stores, to tell the consumer the price of a certain product. Now, imagine one, but this time with a screen, not as simple as the barcode reader has, but technically a full computer screen. We shall baptize this device, Info-Dome.

The Info-Dome is connected to an outside secure central computer, in which only renowned suppliers can store their basic data and through which the correct company website is securely linked.
This system allows for an effective authentication verification as the info request can’t be diverted to a fake website. It is even possible to read a covert authentication code, without showing the code on the screen, as the consumer only wants to know, whether the product is genuine or not.
Is the authentication code for exclusive products and medicines complicated, for high-end brands of consumer products the system can be much simpler.

I am not saying that this is the solution. And I certainly will not abandon either the use of the smartphones and apps, or the implementation of secure printing technologies. But an Info-Dome is, in my opinion, the direction in which the consumer goods companies in their battle against counterfeiting should move.
It is worth a serious discussion.

Note: There is much more to the Info-Dome in regard to labelling, but that’s for a following article.

5 responses to “Anti-Counterfeiting – When do we start to move into the right direction?

  1. ScoringAg has this technology since 2004. By using non repeatable SSI-EID Codes counterfeiting is stopped. The problem of counterfeited products is not only the end product it’s also the ingredients in that end product as we could see in the Melamine scandal. ScoringAg’s database has multiple layers of stopping counterfeiting from field-to-fork and all other commodities, like cigarettes and shoes.
    Many articles can be found in the internet like this:

    • Brunhilde, you miss the point. It is the consumer who should be incorporated into any attempt or new technology of anti-counterfeiting. All high-tech is useless as long as the consumer can’t easily and independently identify the originality of the product.

      • With ScoringAg’s SSI-EID code entered in the consumer is able to check on the product, as there are many steps of verification. Here is a code to check on: SSI_B50CDE62E2

  2. Anton, a very good critique of the weaknesses of various ‘solutions’, but as a manager looking after many Asian countries (and I can imagine same would be in Eastern Europe, Africa, South America), the ability to use a retail-based database connection is limiting.

    I think you are right that a key part of the solution must be consumers, but a smartphone solution (yes, smartphones are / are becoming commonplace in most of Asia) or something similar is probably the key, and we need to think of a way to guarantee that the app used is genuine. I think once a genuine app is on a phone, it is useful ongoing. A safe app site for major brands?

    Look forward to your ongoing reviews of ACF solutions.

    • Chris, thank you for the comment. Finally somebody with some sense about this issue. Your statement of course is right, but (I don’t think I will see it in my lifetime) a general app for this purpose will never ever be developed. How many apps are there in the market. Look at the hypocritical behaviour of Apple. I my opinion there only is one answer. Create a save website where companies can post their bar codes and anti-counterfeiting codes. The website safely can be reached by ANY simple app, from ANY mobile, by ANY barcode/RFID reader, by ANY laptop or PC. Safe apps don’t exist, but approaching a safe websites from a reader in a supermarket/shop/retailer is easily set up. Counterfeiters don’t have access, so it is the best solution. Look at companies as Google, MicroSoft, Yahoo etc, that is a lot of cash in the pipeline for them.
      Thank again, and the issue of counterfeiting is still ongoing.

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