Fighting the fakes
IT took a bad batch of dodgy baby formula to convince Gold Coaster John Houston that there was a way to battle counterfeit products.
Mr Houston, who has a background heading telecommunications companies across Asia, heads listed company YPB, which battles for the integrity of brands from counterfeiters.
The company launched in 2011 (listing on the ASX in 2014) and now has offices around the world.
It was seeing the tragic fallout from counterfeiting in China that inspired his move.
“The level of counterfeiting in China and other places can be amazing,” he said.
“But probably the most shocking one was the 2008 baby formula scandal were a company artificially increased the protein counts in its formula by adding melamine, which is highly toxic, and 300,000 babies were hospitalised.”
But perhaps moist amazing to the former telecommunications executive was that despite two people being handed the death penalty and executed over the scandal, in 2010 another company did the same thing.
He said YPB had set to use a range of strategies to help companies to prevent similar counterfeiting harming their international images.
“We operate in China, Pakistan, the USA and across South East Asia,” he said,
“We have about 50 clients and, particularly in China, we have a large number of clients who have the potential to grow. “We have started to break into multinationals, particularly Australian companies in clothing and beauty products.”
Mr Houston said the company was looking at using a range of methods, from infrared tracers in hot-stamping on passports, microchips that were readable by some smartphones to QR codes.
“We are encouraging exporters to serialise their product so it can be tracked through the supply chain — paddock to pay point essentially — which importantly gives the end-consumer an easy way to verify that their package is legitimate,” he said.
“We have the ability to protect that QR code so the consumer can read it with smart phone and know it hasn’t been copied which is great but it also creates a connection between the brand and consumer.”
He said the world changed in the ways things were sold.
“It has become much more difficult and one reason for this is the onset of e-commerce.
“Brands, particularly those exporting to China, don’t know where their end customer is.
“Most Australian brands want to crack that China market with its 350 million middle-class consumers. had that
“But first thing that happens if you are successful is that you get counterfeited.
“There are wine brands that have discovered they seem to be selling more wine in China than they manufacture in a year.”
YPB’s latest client is one of the western world’s growth industries that is ripe for counterfeiting, medical marijuana.
The group has teamed up with Namaste Technology, a company who have suppliers shipping 50,000 packets of medical marijuana a day.
“So this will be a huge area and a huge opportunity for counterfeiters who can supply substandard products,” he said.
“But a med marijuana company that’s done all the right things doesn’t want to be caught selling to someone in a place that it’s illegal.”
(THE) FIRST THING THAT HAPPENS IF YOU ARE SUCCESSFUL IS THAT YOU GET COUNTERFEITED JOHN HOUSTON, FOUNDER OF YPB