China is not new to counterfeit goods, but the trend now appears to be taking a more dangerous turn. Once confined to handbags and luxury goods, Chinese counterfeiters are now entering the food and drink market, in an attempt to take a piece of the action from popular brands.
Australian businessman John Houston, an expert in spotting counterfeit goods, saw this trend coming a decade ago. It was foreshadowed by the 2008 Chinese milk incident where melamine was substituted for protein in order to falsify food test results but has now spread to other industries. The knock offs are becoming so good that Houston, whose company specializes in detecting fake products, can’t even tell the difference.
The 2008 tainted milk scandal led to the hospitalization of thousands of children and Japanese and South Korean consumers were exposed to the same type of scam, except with melamine-laced egg products. A lax regulatory environment means many of the offenders originate in China yet thanks to globalized trade the tainted products reach developed countries like the United States with ease.
Houston recently gave the example of two bottles of tattoo ink, one the original product, the other a toxic Chinese imitation, which were identical down to the last detail. The toxic ink has been found in Australia and the United States under the names Intenze, Immortal, Starbrite, MOM’s, Kuro Sumi, and Skin Candy. Samples of the fake products have been found to contain heavy metals as well as dangerous levels of bacteria, warranting an FDA warning.
The risk posed by tainted and counterfeit goods entering the food chain is so great that an industry has been created in scientifically identifying knock offs before they reach consumers.
Houston’s firm YPB is a major player in the new space. It intends to defeat counterfeiters with a solution straight out of science fiction. Known as “Tracer,” it involves a nano-particle that can be embedded within the product, which can then be detected by a handheld scanner in order to verify its authenticity. Current clients include winemakers and tattoo ink companies, but a recent deal by YPB will now see Tracer being used by China’s largest table salt manufacturer.
With the value of counterfeit goods in the U.S. expected to reach $1.7 trillion this year, Houston’s business may have as many applications as there are Chinese counterfeiters.