Australia’s export beef brands command impressive price tags of up to $120 a kilogram in the booming Chinese marketplace, but just half the Aussie-branded beef on offer actually originates from Australia.
In fact, chances are it may not even be beef, despite what the clever labelling says on the retail pack.
Rat meat, dog, horse and camel are some of the substitutes reportedly likely to sell as beef or sheepmeat in China.
The quality, tasty and safely-produced Australian branded agricultural goods which health conscious Chinese shoppers eagerly seek out and pay premium prices for have spawned a thriving trade in counterfeit Australian food.
Professional business services firm PricewaterhouseCoopers (PwC) estimates retail sales of fraudulent “Australian” branded beef alone are worth about $2 billion a year.
The turnover of fake branded product is about equal to retail sales of real Aussie beef in China.
Australian beef currently averages about $38/kg in China – there’s no reason why you could not expect $42/kg
Local or cheaply imported beef cuts which may normally retail for about $4 a kilogram in China are turned into Australian-labelled product potentially selling for anywhere from $38 to $120/kg.
The problem extends well beyond beef, with non-Australian wine often labelled as part of our $1b annual export market in China, and the premium-priced Penfolds brand being a repeat target for the sophisticated counterfeit industry.
About half the imported wine sold in China is considered unlikely to be from the countries referenced on the label.
Australian dairy products are also vulnerable to fraud, largely because significant money and effort has gone into developing their brand reputation and quality credentials, particularly in China where consumers are suspicious of the safety and origination of many local foods.
Aside from food, PwC quotes estimates of about 200,000 more Chinese Volkswagen vehicles sold annually than the car company actually makes for the China market.
Counterfeit food is everywhere
Worldwide, food fraud costs at least $65b a year and is evident even in Australia, according to PwC agribusiness advisory partner, Greg Quinn.
PwC’s close interest in food fraud has seen it spend 18 months developing a “food trust” product traceability initiative which will allow overseas customers to scan Australian beef (not just the packaging) to confirm its authenticity.
We have some of the smartest and hardest working farmers supplying the cleanest, safest quality meat ... we have a keen role to play making sure that reputation doesn’t just stop with us
The process effectively sprays the meat with a natural, and edible fingerprint, similar to traceability signatures already used to guarantee the authenticity of pharmaceutical products.
Mr Quinn told a forum at last week’s Beef Australia how branded meat substitutes were regularly a problem in western markets such as the US, particularly in the food service and restaurant sectors, as opportunists found ways to “add value”.
Counterfeit rice branding is also a notable issue in the US as greater globalisation and complexity of food supply and value chains make popular market brands more vulnerable than ever.
“Counterfeiting is a big business, and it’s not just about CDs and handbags,” he said.
Australia’s agri-food industry faced a particularly big problem in China because its brands and their clean and safe reputation were widely respected, and it was fairly easy to substitute branded meat for alternatives where consumers were not fully aware how quality Wagyu should taste.
As well, much of the packaging on Australian-branded retail beef lines originated from China, making it vulnerable to imitation.
Losing trust costs dearly
Fellow member of PwC Australia’s food trust team, Al Jawhari, warned the counterfeit sector was no “fly by night” operation, but one of the world’s top 10 biggest industries.
Quality brands and goodwill took years and huge amounts of money to create, but could be killed overnight if hijacked by fraudsters, only to become the focus of a public health scandal.
Tackling the threat with an initiative such as PwC’s Food Trust Platform would not just protect Australian branded beef from counterfeiters but would make their brands more attractive to shoppers who would be comfortable paying a premium for their confidence in the product.
“Australian beef currently averages about $38/kg in China – there’s no reason why you could not expect $42/kg if you give a full guarantee of its providence,” said PwC’s head of innovation and ventures, Trent Lund.
Producers also stood to get more price reward from the supply chain, which currently tended to direct most return on price premiums paid by shoppers back to processors and marketers because they shouldered most of the risk in developing brands with Asian consumers.
Tiny edible fingerprint
The PwC technology uses nano-scale silicon dioxide particles sprayed onto meat as it is packed in Australia.
It is subsequently scanned at the point of sale overseas to confirm the product’s Australian authenticity and supply chain history, right back to the National Livestock Identification System tag number on the animal in the paddock.
Silicon dioxide is already widely used in the food industry as an anti-caking ingredient, including in health supplement powders and medicines.
The fingerprint remains in tact in temperature extremes from minus 20 degrees Celsius to 400C, which means meat’s authenticity can even be checked as it is served up in a restaurant.
Packaging, also embedded with identification, would be scanned, too, to confirm a match with the product inside and providing the assurance it had not been tampered with.
PwC’s platform, built in partnership with tech giants Google and Japan’s Nitto Denko, is set to go live with some high-end Chinese retailers after mid-year, promising the world’s “most advanced and holistic anti-counterfeit technology.
US retail and food service applications are also likely in the relatively near future.
Closer to consumers
Mr Lund said the Food Trust technology would ultimately bring consumers much closer to producers, bolstering the relationship and trust shoppers have with those supplying Australia’s relatively scarce but much-respected beef products.
Information gleaned from a scan in a Chinese supermarket could also direct consumers with optimum cooking advice and fresh meal option recommendations.
He said the technology not only provided the chance to dramatically improve food brand security, but also develop a new specialist, technology-rich packing industry in Australia, controlled by the local food industry.
Principal of elite Sydney’s butchery, Victor Churchill, Anthony Puharich, has been one of many food supply chain participants in PwC’s trials.
“Beyond doubt, we have some of the smartest and hardest working farmers supplying the cleanest, safest quality meat, and as butchers our industry has a keen role to play in making sure that reputation doesn’t just stop with us,” he said.
“We want to ensure the beef and brands developed here continue to reap the credibility and returns they deserve in markets around the world.”
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