Nano Tracer Aims to Consign Fake Goods to The Reject Pile

  • Date: 3rd December 2014
  • Category: Industry News
  • Origin: Sydney Morning Herald

Target Australia said the suspect cosmetics were bought from an official M.A.C wholesaler and shipped into Australia via parallel importing. Estee Lauder said it was suing over the fake goods. Photo: Jason Merritt

As law enforcement and retailers continue to fight against the lucrative international counterfeit industry, an Australian company is claiming its cheap tools will change how the industry will tackle fake goods from China.

Sydney-based YPB has purchased tracer patents developed by China’s Dalian Maritime University to pair with its own scanners and acquired Brand Reporter, a US-based start-up that developed a platform for companies to identify and track counterfeit products in the supply chain and at retail points.

“Only two people in the world know the tracer formula,” said John Houston, chief executive, YPB Group, highlighting the secrecy required in combatting counterfeiters.

Fittingly, YPB’s name translates in Chinese to “You Pin Bao” or “excellent brand protection”. Prior to launching YPB, Mr Houston spent 20 years in Asia as a telecommunications and IT entrepreneur. He said most counterfeit goods in circulation around the world originated from China.

“Counterfeiting is an enormous industry valued at $1.7 trillion, but you don’t hear about it that much because people aren’t that proud of it,” he said. “But it is a big issue.”

YPB’s nanotech tracer is invisible to the human eye but can be applied to a product during or after manufacture. The tracer is the unseen equivalent of an authenticity stamp that can only be read by a YPB-developed scanner that costs about $35, while inserting tracer material into a product costs less than 50¢.

While counterfeit goods are often associated with designer-label handbags and brand-name runners, they also include tobacco products, medicine, batteries, car parts, clothing and electronic goods.

“The tracer material can be put into fibres, plastics, inks and even be put into food. You can scan a product and detect the presence of the tracer material that tells you the product is authentic,” Mr Houston said.

Figures provided by the Australian Customs and Border Protection Service claim the government authority made 3427 seizures of suspected counterfeit goods during the past financial year (2013-2014) totalling almost 1 million items – nearly double the previous year’s haul.

A window exists for technology to assist with detection as the ACBPS revealed detecting counterfeit goods using standard examination techniques is “difficult”.

“It’s an accepted fact that as counterfeiting becomes more sophisticated, traditional detection methods are not always as effective,” an ACBPS spokesperson said.

“ACBPS regularly consults with brand owners about what technology is available to assist with identifying counterfeit goods, and in some circumstances discussing options for loaning such equipment for assisting in specific operations. A spectrometer is one such example of technology which can be used to assist in identifying counterfeit goods.”

Counterfeiters can achieve such high standards of imitation, according to ACBPS, that even manufacturers and brands have struggled to identify whether some goods were genuine. Forensic testing proved the only method that could correctly identify whether products were the real thing.

The issue is so widespread that retail giants Target and Walmart have previously been accused of selling fake high-end brand products – allegations denied by the retailers. Further complicating detection, counterfeit products are often mixed in with genuine articles during the distribution process.

The Australian Retailers Association said it welcomed any advancement in technology that could contribute to fighting blackmarket goods but the first step had to be made by brands and manufacturers to protect their own products.

“If they can get technology down to a mini bar code for avocados grown in Queensland, there is no reason they can’t get chip technology into products that can tell anybody that this product is or isn’t genuine,” Australian Retailers Association executive director Russell Zimmerman said.

“If it is as cheap as using a mobile phone and [the tracer] is cheap to fit into the product, then anything that can reduce counterfeiting in Australia or anywhere in the world would be helpful,” he said. “Once it is scanned, you know whether you have the genuine product.”