The Dark Arts of Counterfeiting

     |     

Part 2 of the ABC’s of Brand Protection series by Authentix focusing on the global scope of the counterfeiting epidemic and how to take action against it to protect your brand, your customers and your revenue.

By Franco Diaz, Brand Protection Director, Authentix

Brands are working harder than ever to provide transparency into their business practices. The customer trust and loyalty that this creates is invaluable and the holy grail of marketing departments. A sure-fire way to destroy that trust is to be subjected to counterfeit controversy – product falsification, consumer harm, or news of legal action against a brand can prove toxic to any popular brand.

Organized criminal enterprises have developed sophisticated networks of willing players throughout the global supply chain in practically every industry to cause such destruction. Some of their tactics include:

  • Counterfeiting
  • Diversion
  • Tampering/Reuse
  • Adulteration

Today, companies expand their operating and delivery efficiencies at lower costs with high-quality manufacturing available around the world. However, that innovation comes at a cost by enabling undetectable counterfeit goods to make their way into the supply chain. Buzzworthy brands with growing demand, celebrity clout and premium price points are most-targeted. The resulting inferior quality and/or faulty parts lead to consumer dissatisfaction, recalls, and major safety concerns.

It’s not just back alley transactions and big city flea markets that you need to worry about anymore. The rise of digital marketplaces such as Amazon, eBay, and Etsy (plus countless others that emerge each year) enable and accelerate sales of knockoff goods not only to willing buyers, but unsuspecting ones as well. In fact, according to a 2018 study by the U.S. Government Accountability Office, about 40 percent of a sample of goods bought on popular eCommerce websites were fake. Data collected by the U.S. Customs and Border Patrol between 2000 and 2018 shows that seizures of counterfeit and pirated goods at U.S. borders, much of destined for e-commerce channels, has increased ten-fold.

It is forecast that by 2022, the negative impact of counterfeiting and piracy will drain US $4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk. This impact cuts a wide swath across many industries and businesses including:


  • Pharmaceuticals and OTC Medicines: At least one million people die each year after consuming counterfeit medicines.

  • Tobacco: If the global illicit trade in tobacco was eliminated, governments would gain at least US $31 billion in additional taxation revenue. Curbing this illicit trade could save over 160,000 lives annually by 2030 and beyond.

  • Spirits and Premium Drinks: Counterfeit or illegal alcohol, recognized as “unrecorded” alcohol, is not monitored for quality or taxation. The WHO estimates that 25 percent of the alcohol consumed worldwide is unrecorded.

  • AgroChem: The WHO estimated that counterfeit and adulterated pesticides poison over three million people7 annually and result in over 200,000 deaths mainly in developing countries due to unregulated trade enforcement.

  • Health & Beauty: According to the FBI, counterfeit cosmetics have contained adulterants such as paint thinner, which irritates the eyes, nose, and throat in addition to being flammable and poisonous.

 

In this climate, many companies are thinking more broadly about how to implement coordinated anti-counterfeiting and anti-diversion strategies across their brands and throughout different regions of the world. Just as tamper-evident seals on bottles of pills and liquid formulations became more common after a tampering scare in the 1980s, attitudes toward anti-counterfeiting technologies are beginning to evolve.

For more brand protection basics – why it is necessary, how it works, who is vulnerable, how to implement an effective program, what to look for in a technology partner, and which emerging technologies will help protect your brands in the future – read the The ABC’s of Brand Protection.

Download the eBook

The ABCs of a Successful Brand Protection Program

     |     

Part 1 of the ABC’s of Brand Protection series by Authentix focusing on the global scope of the counterfeiting epidemic and how to take action against it to protect your brand, your customers and your revenue.

By Franco Diaz, Brand Protection Director, Authentix

The negative impact of counterfeiting and piracy is projected to drain U.S. $4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk by 2022.1 Are your products protected? They need to be.

If anyone of us were to think about the purchases we made over the years, we’ve probably purchased a counterfeit good. It’s estimated that more than 80 percent2  of all global consumers have unwittingly purchased falsified products. This concept is proliferated by the ever-growing global supply chain and all its complexities that foster an environment lacking required ingredients, quality control, or government oversight. To get ahead of the counterfeiters, brand owners need a brand protection program to shield what matters most to your business – customers, brand, and revenue.

The gaps in the system are magnified even more during a pandemic. In the same week COVID-19 was declared a pandemic, a fake and dangerous rendition of a popular potential therapeutic drug with a street value of more than $14 million was seized by Interpol4 . It’s time to sound the alarm. No one industry is immune to such calculated nefarious acts. Brand owners from health and beauty, food and beverage, pharmaceutical, to apparel experience financial losses and more importantly, added risks to consumer health and safety.

The good news is that today’s anti-counterfeiting solutions to detect and deter fraud are growing more sophisticated, affordable, and accessible. The benefits of a strong brand protection program are three-fold:

  1. Protection of the brand owner’s livelihood – namely its reputation and investments into market-leading proprietary products.
  2. Consumer protection – no brand owner wants their name associated with health hazards or calamities resulting from brand compromise.
  3. Corporate citizenship – proactive companies that deploy product protection programs and are serious about a no-compromise climate are more responsible corporate citizens. This leadership and transparency can contribute exponentially to customer loyalty as it humanizes the brand.

CONSIDER THIS: The global economic value of counterfeiting and piracy could reach U.S. $2.3 trillion by 2022.3

Do you have a strategy in place, with policies and dedicated infrastructure to combat product fraud? Maybe you partner with a trusted third-party technology and solution provider. Maybe you don’t yet have a brand protection program in place. No matter your approach to the counterfeiting issues, knowledge is power.

Counterfeiting is real and impacts everyone in the supply chain. This article addresses a single layer of the importance of brand protection programs. We have more facts, figures and trends in our latest eBook, The ABC’s of Brand Protection. This eBook offers a crash course in how brand protection works, who is vulnerable, how to implement an effective program, what to look for in a technology partner, and which emerging technologies will make a difference.

Sources
1. https://iccwbo.org/media-wall/news-speeches/global-impacts-counterfeiting-piracy-reach-us4-2-trillion-2022/
2. https://www.dhs.gov/sites/default/files/publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf
3. https://iccwbo.org/media-wall/news-speeches/global-impacts-counterfeiting-piracy-reach-us4-2-trillion-2022/
4. https://www.bbc.com/news/health-52201077

Fuel Authentication & Traceability through the Supply Chain: Advancing Quality & Sustainability

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The Oil and Gas industry is facing increasing pressure to take urgent actions toward a low-carbon future. Some have responded already by setting bold Net Zero and other ambitious Sustainability targets by 2050. With the current geopolitical landscape, the industry continues to be challenged to innovate in navigating climate and environmental issues driven by constantly changing policy and regulations.

To emphasize the seriousness of the industry’s need to address climate issues, the Energy Institute recently focused on the energy transition as the key theme at IP Week 2020, held in London this February. As a key conference speaker on behalf of Authentix, I had the opportunity to share unique insights on how physical and digital fuel authentication technologies can help reduce emissions, protect the environment, and enable a more sustainable future, while also removing manipulation throughout the supply chain.

Fuel Adulteration’s Impact on the Environment

Fuel adulteration has proven to increase emissions of harmful pollutants from vehicles and worsen urban air pollution that lead to adverse impacts on human health. For example, kerosene, which when illegally added to a nation’s fuel supply, increases levels of carbon monoxide (CO) by as much as 50%. CO is one of the most common adverse by-products caused by adulterants often added to gasoline and diesel supplies to dilute taxable fuels with non-taxed or extremely low-cost materials.

To assess the level of impact of fuel adulteration on emissions, a study was conducted by the Journal of Civil Engineering and Environmental Technology in India, a country where this continues to be a significant and ongoing problem. The study concluded that gasoline adulterated with five percent kerosene was found to have a CO value of 16.4%, while gasoline with a 55% adulteration factor increased the CO value to 51.6%, an alarming increase.

In many countries, fuel adulteration using harmful by-products, waste oils, etc. can make up to 30% of the total volume of gasoline or diesel sold. It’s no secret that petroleum products present a lucrative opportunity for those who wish to deliberately manipulate fuel supplies for illicit monetary gain. Such activity is a huge environmental and financial problem for oil companies and governments alike. In fact, the annual worth of illicit fuel trade is estimated to be $133 billion and growing.

How Fuel Integrity Can be Compromised

Fuel manipulation can occur in multiple ways. If you consider the complex downstream supply chain, there are intentional or accidental vulnerabilities at many points that provide opportunities for fuel adulteration. These include:

  • Diversion
  • Dilution or substitution
  • Theft
  • Human error
  • Equipment malfunctions

When any of these factors occur, it can result in the wrong product used in the wrong application.  Without a traceability solution of some kind, it then becomes difficult to determine where and when the wrong product entered the supply chain.

Finding the Right Solution: Balancing Performance and Cost

To mitigate these challenges, oil companies and government agencies must be able to track and validate the quality and authenticity of their fuel at all points in the supply chain. This requires advanced technologies that can not only authenticate the fuel, but also identify and record meaningful data for product insights to be gained from terminal to retail station.

Marking fuel by inserting an extremely low dose (parts per billion) chemical marker into a petroleum product has become one of the most trusted solutions for enabling the detection of adulterants and to understand where this problem is happening. To provide the highest level of security and effectiveness, Authentix currently provides dozens of governments and branded fuel companies with proprietary and unique covert marker systems that vary in complexity and scope. Detection and measurement can occur in the field, in a laboratory, or both depending on the needs of the organization.

While fuel integrity programs are an effective way to combat adulteration, questions may remain about the quality and legitimacy of the fuel being refined or imported. To address this uncertainty, organizations and governments typically perform fuel quality assurance testing using ASTM standards via third-party laboratories. While ASTM testing is a longstanding and accepted method, it can be very expensive, and results are delayed as organizations struggle to find the balance between performance and cost.

For organizations looking for a more affordable and faster alternative to traditional lab-based ASTM testing, Authentix provides solutions for field use leveraging portable devices using sophisticated chemometric models, which can identify fuel composition and predict the overall quality and chemical properties. Applying this method, field enabled inspectors can simultaneously measure the density and the spectrum of fuel samples modeled to ASTM properties without the expensive and slower lab-based methods. These portable measurement devices can be used for a wide variety of fuels, including gasoline, diesel, jet, and other specialized fuels. In addition, IOT sensors can be installed in downstream locations for monitoring fuel volumes, which aid inspectors to audit consumption, shortages, and assist in demand forecasting.

In many cases, quality, volumetric, and usage data can complement a fuel integrity program with variable-time monitoring and actionable intelligence – enabling testing and visibility at any and all points in the supply chain.

Using Data Intelligence to Bring it Together

The magic bullet is not just the chemical marker itself nor the fuel quality testing method if used independently. But imagine the ability to collect, correlate, and analyse multiple data points from different sources that feed into a single data platform, providing a unique and actionable dashboard view into all elements of the fuel supply chain. As digital transformation continues to permeate the oil and gas industry, Authentix is accelerating its digital technology to provide this platform. The Authentix Information System, or AXIS®, is a cloud-based, integrated set of software applications designed to provide comprehensive and insightful data for our customers to make remediation and enforcement decisions, thereby giving them the ability to rapidly take preventative or corrective action.​

AXIS® report showing month-over-month view of failure results

 

 

AXIS® report showing geographical view of location of stations tested and pass/fail rates

Looking Ahead

The move to a more sustainable future, decarbonization, and lowering adverse impacts of climate change will no doubt take an incredible allocation of time, technology, and resources. By having full visibility and control over the fuel supply chain, our customers are able to deter illicit activity and reduce unauthorized fuels in the market. Therefore, implementing a fuel integrity program has shown to directly improve emissions, reduce pollutants, and improve overall consumer health and safety. In our view, this becomes an important piece of the solution and should become a key component of any Net Zero or Sustainability Plan going forward.

About Authentix

As the authority in authentication solutions, Authentix thrives in supply chain complexity. We provide advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact, and commercial products have robust market opportunities. Our partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.

To learn more, email info@authentix.com.

The Assurance of a Well-Designed, Secure Spirits Packaging Solution

     |     

The right brand protection solutions to protect your product.

 

In a recent article, produced for Beauty Packaging, we introduced the shift in implementing security features to protect your products. There has always been a struggle between brand owners and marketing on where to place a security feature: on-product/in-product or on-package/in-package. The article served as a reminder that today’s technology, combined with the
right domain experience in ink technologies and printing techniques, expands the concept of how to protect products against counterfeiters. It highlighted that different areas of the business, like the marketing team and packaging engineers,
can feel confident that selected security features will not interfere with the packaging aesthetics or production.

Our latest discussion focuses on what is readily available to you and what you can learn about your products to make better business decisions. Two questions you want to be able to answer:

  • Do the benefits of including security features create a positive ROI for the company?
  • Does anyone in the company know how to properly estimate the costs of product adulteration or fraud?

A risk assessment strategy will help answer the above questions by revealing critical data points associated with your high-value products. This assessment will lead to a brand protection solution that is right for you. With the right brand protection solution, you can really ascertain how much your bottom line is impacted by counterfeit activities.

Play defense by using a multilayered approach

At Authentix, we have discovered that the most effective way to protect your branded products is by utilizing a multilayered approach which provides a combination of security features (overt, covert, forensic, digital). This provides a masterful defense against counterfeiting efforts, as detection can be done quickly in the field and enforcement can be rapid—thus limiting the exposure and extent of a problem. Let’s review the various solutions by security feature.

Overt security – holograms, specialty inks, color-shifting inks—features you can see without devices. Well-known effects include:

  • Tamper-evident poly seals, shrink sleeves and induction seals
  • Secure holography with image shift on angular variables (OVD)
  • Security inks such as color-shifting inks—also known as optically variable inks (OVI)
  • Specialty substrates such as UV- or IR-emitting security fibers
  • Digital QR or other visible code
  • Substrate or ink tactile effects
  • Security graphics / overt complexity (print effects/varnish plate anomalies, etc.)

The global economic value of counterfeiting and piracy could reach US$2.3 trillion by 2022.
(Source: International Chamber of Commerce).

Covert security – Ultraviolet inks [UV], infrared [IR] inks, invisible taggants embedded in substrates, and inks with other specialized markers—features you can see only with proprietary devices. These features include:

  • Thermally or magnetically activated inks
  • Pantographs or anti-copy features
  • Visually discernable microtext
  • Scrambled indicia
  • Coin-reactive inks

Visible Digital Codes with hidden secure graphics covert solutions—features are invisible to the average person but detected upon inspection by a trained individual utilizing a specific device.

  • Invisible security inks activated by illumination in invisible spectral wavelengths
  • Hidden images or digital watermarks
  • Micro taggants (machine readable or visible on high magnification)
  • Hidden microtext or micro printing
  • Marks in die-cut profile
  • Deliberate mistakes in small printing fonts or other marks

Forensic – Molecular taggants, DNA, nanoparticle coatings—features only detectable with laboratory equipment.

  • Forensic markers
  • DNA-type inks for forensic examination
  • Spectrographic signature analysis

Digital – A host of solutions, which can include the above, relating to numeric values or digital symbology that enable users to look up related product authentication data either via the internet or through a proprietary localized database.

Most highly secure overt and covert inks available today are compatible with essentially all conventional or digital printing, and applicable on most substrates such as labels, seals, closures, etc. They are also customizable in a variety of colors and coating types.

A winning appearance

Today’s anti-counterfeiting and brand protection technology advancements embody the aesthetic qualities for which your brand is recognized. Beyond maintaining an attractive package on the shelf, it is important to understand what authentication features will satisfy the key stakeholders within your organization. And how will you be able to detect counterfeiting in the field and enforce the law when needed? All of these factors need to be considered and prioritized when working through the various options.

We understand the challenges you face and can help identify and rapidly implement the product security that makes sense. Our 25 years of experience have helped us to design our many technologies to seamlessly integrate within existing ecosystems, such as packaging, printing, manufacturing and other production partners, with the primary goal of limited disruption to existing processes. Contact us to get started.

Download the PDF

The Assurance of a Well-Designed, Secure Health & Beauty Packaging Solution

     |     

The right brand protection solutions to protect your product.

 

In a recent article produced for Beauty Packaging, we introduced the shift in implementing security features to protect your products. There has always been a struggle between brand owners and marketing on where to place a security feature: on-product/in-product or on-package/in-package. The article served as a reminder that today’s technology, combined with the
right domain experience in ink technologies and printing techniques, expands the concept of how to protect products against counterfeiters. It highlighted that different areas of the business, like the marketing team and packaging engineers,
can feel confident that selected security features will not interfere with the packaging aesthetics or production.

Our latest discussion focuses on what is readily available to you and what you can learn about your products to make better business decisions. Two questions you want to be able to answer:

  • Do the benefits of including security features create a positive ROI for the company?
  • Does anyone in the company know how to properly estimate the costs of product adulteration or fraud?

A risk assessment strategy will help answer the above questions by revealing critical data points associated with your high-value products. This assessment will lead to a brand protection solution that is right for you. With the right brand protection solution, you can really ascertain how much your bottom line is impacted by counterfeit activities.

Play defense by using a multilayered approach

At Authentix, we have discovered that the most effective way to protect your branded products is by utilizing a multilayered approach which provides a combination of security features (overt, covert, forensic, digital). This provides a masterful defense against counterfeiting efforts, as detection can be done quickly in the field and enforcement can be rapid—thus limiting the exposure and extent of a problem. Let’s review the various solutions by security feature.

Overt security – holograms, specialty inks, color-shifting inks—features you can see without devices. Well-known effects include:

  • Tamper-evident poly seals, shrink sleeves and induction seals
  • Secure holography with image shift on angular variables (OVD)
  • Security inks such as color-shifting inks—also known as optically variable inks (OVI)
  • Specialty substrates such as UV- or IR-emitting security fibers
  • Digital QR or other visible code
  • Substrate or ink tactile effects
  • Security graphics / overt complexity (print effects/varnish plate anomalies, etc.)

The global economic value of counterfeiting and piracy could reach US$2.3 trillion by 2022.
(Source: International Chamber of Commerce).

Covert security – Ultraviolet inks [UV], infrared [IR] inks, invisible taggants embedded in substrates, and inks with other specialized markers—features you can see only with proprietary devices. These features include:

  • Thermally or magnetically activated inks
  • Pantographs or anti-copy features
  • Visually discernable microtext
  • Scrambled indicia
  • Coin-reactive inks

Visible Digital Codes with hidden secure graphics covert solutions—features are invisible to the average person but detected upon inspection by a trained individual utilizing a specific device.

  • Invisible security inks activated by illumination in invisible spectral wavelengths
  • Hidden images or digital watermarks
  • Micro taggants (machine readable or visible on high magnification)
  • Hidden microtext or micro printing
  • Marks in die-cut profile
  • Deliberate mistakes in small printing fonts or other marks

Forensic – Molecular taggants, DNA, nanoparticle coatings—features only detectable with laboratory equipment.

  • Forensic markers
  • DNA-type inks for forensic examination
  • Spectrographic signature analysis

Digital – A host of solutions, which can include the above, relating to numeric values or digital symbology that enable users to look up related product authentication data either via the internet or through a proprietary localized database.

Most highly secure overt and covert inks available today are compatible with essentially all conventional or digital printing, and applicable on most substrates such as labels, seals, closures, etc. They are also customizable in a variety of colors and coating types.

A winning appearance

Today’s anti-counterfeiting and brand protection technology advancements embody the aesthetic qualities for which your brand is recognized. Beyond maintaining an attractive package on the shelf, it is important to understand what authentication features will satisfy the key stakeholders within your organization. And how will you be able to detect counterfeiting in the field and enforce the law when needed? All of these factors need to be considered and prioritized when working through the various options.

We understand the challenges you face and can help identify and rapidly implement the product security that makes sense. Our 25 years of experience have helped us to design our many technologies to seamlessly integrate within existing ecosystems, such as packaging, printing, manufacturing and other production partners, with the primary goal of limited disruption to existing processes. Contact us to get started.

Download the PDF

Beautiful and Secure Spirits Packaging

     |     

Brand protection solutions that allow design and security features to live in harmony.

For the brand manager, packaging designer or packaging engineer, there are many factors to consider when designing new artwork, graphics and security for product packaging. Incorporating higher security and brand protection features into product packaging is becoming more of a priority for many companies because of the  ongoing threat of counterfeiting.

However, it is challenging to mix effective brand protection, great branding and regulatory needs into one design. With different stakeholders involved, there are numerous factors affecting the perspective:

  • Ease of implementation into existing packaging and print lines
  • Regulatory compliance
  • Brand marketing preferences

Those same stakeholders can’t ignore that the resulting impact of consumer reaction can also be critical. How can brand owners navigate these challenges and satisfy multiple stakeholders, while enabling the necessary security features and maintaining the beautiful appearance desired? Today, implementing security or brand protection solutions is possible and the impact doesn’t have to be obtrusive to your packaging medium.

Why You Can’t Ignore the Need for Security

Counterfeit operations have evolved into large, well-funded, sophisticated organizations with their tentacles in multiple countries. They survive on easy access to technology and domain expertise to compete with legitimate and other counterfeit businesses.

Companies have learned (many the hard way) that not implementing product authentication solutions and monitoring for leakage adversely affects the bottom line and potentially the health and well-being of their loyal consumers. More specifically, brand owners have discovered that adding security features on packaging can greatly mitigate:

  • Lost revenue and declining market share
  • Patient or consumer safety and related liability
  • Recalls due to product adulteration and fraud
  • Long-term erosion of consumer confidence and brand value

Counterfeiting a branded product has become easier as the supply chain expands to a global model where product visibility decreases, resulting in more opportunities for illegal activities. For years, many consumers knew of counterfeiting in terms of fake designer handbags, clothing and jewelry. Now, more consumers are becoming aware of counterfeit beauty products such as makeup, hair products, sunscreen and more. Even ‘man’s best friend’ isn’t safe from counterfeit pet food, prescriptions and over-the-counter medicines. (Source: Fake goods are not fake news, Denver Business Journal, Oct. 2018)

Flexible Security Features in Today’s Market

Product security has shifted in the last 30-35 years. In the 1980’s, the first mass deployed authentication feature, in the form of secure holography, began to show up in the industry. Early adopters were major pharmaceutical, wine/spirits and consumer electronics firms. Today, brand protection is on the radar of any company with a significant investment in high-end branded products.

Brand protection begins with the understanding that it is a process and not a product. A product undergoes the product life cycle stages: introduction, growth, maturity and decline. Brand protection as a process is a series of actions, changes and functions all directed toward the pursuit of a return on investment (ROI).

Different levels of security, varying ink technologies, and numerous covert and overt physical features can be applied to all types of packaging to challenge counterfeiters and help you stand out against your competition.

The first step of any brand protection platform is a risk assessment strategy based on the three risk dimensions: product-specific, geographic and supply chain. This then leads to solutions that match the needs recognized by that assessment.

When thinking about a multilayered approach, there are several elements to consider, starting with the type of packaging being used. The types of packaging range from flexible, barrier and decorative to promotional, rigid or dispensing. Keep in mind that no matter the type of packaging, there is an appropriate security feature to apply.

One approach in a  multilayered solution is to utilize visible color-shifting inks with hidden machine-readable covert components within the ink blend (incorporate photo of our folding carton). The overt feature is a recognizable first line of defense, while the covert elements ensure evidence of authenticity. Even deeper, a molecular level marker can be added to create a forensic and court-defensible component. Most higher-security overt and covert inks are available in a wide variety of printing capabilities, including digital, offset, rotary and flexographic, and are hard to reproduce.  These solutions are applicable to most substrates and customization is available in a variety of colors and coating types.

Brand Protection with Good Design—All Stakeholders Benefit

Today’s brand owners have more security choices than ever before, and should realize there are effective ways to combine brand protection, great branding and regulatory needs into one design. With domain guidance and expertise, brand owners can leverage the right functional authentication feature combination that also satisfies key stakeholders within the organization. Some of the most common interests and outcomes sought by primary stakeholders are:

  • Brand Protection: Desire to protect a product (brand) against counterfeiters, diversion and illicit trade. The solutions that help detect, quantify and remediate through one or more enforceable actions create a positive return on investment for the company.
  • Packaging: Security solution that won’t slow down the production line or existing process. Be sure to consider the effects of implementation before selecting the solution, including graphic design, printing processes, manufacturing processes, and risk to production interruption or delays.
  • Marketing: Features that don’t take away from the aesthetics of the artwork or design. The marketing department has worked hard to come up with the preferred design, color schemes and budget considerations for packaging – therefore, it’s best to only make minimal changes when adding security features to the brand.

The challenge of incorporating effective brand protection with great branding has gotten easier with the flexibility of multilayered authentication solutions. These solutions won’t jeopardize the look of the packaging; in fact, they can add to the product appeal.

Download PDF Here

Beautifully Secure Packaging for Health & Beauty Products

     |     

Brand protection solutions that allow design and security features to live in harmony.

For the brand manager, packaging designer or packaging engineer, there are many factors to consider when designing new artwork, graphics and security for product packaging. Incorporating higher security and brand protection features into product packaging is becoming more of a priority for many companies because of the  ongoing threat of counterfeiting.

However, it is challenging to mix effective brand protection, great branding and regulatory needs into one design. With different stakeholders involved, there are numerous factors affecting the perspective:

  • Ease of implementation into existing packaging and print lines
  • Regulatory compliance
  • Brand marketing preferences

Those same stakeholders can’t ignore that the resulting impact of consumer reaction can also be critical. How can brand owners navigate these challenges and satisfy multiple stakeholders, while enabling the necessary security features and maintaining the beautiful appearance desired? Today, implementing security or brand protection solutions is possible and the impact doesn’t have to be obtrusive to your packaging medium.

Why You Can’t Ignore the Need for Security

Counterfeit operations have evolved into large, well-funded, sophisticated organizations with their tentacles in multiple countries. They survive on easy access to technology and domain expertise to compete with legitimate and other counterfeit businesses.

Companies have learned (many the hard way) that not implementing product authentication solutions and monitoring for leakage adversely affects the bottom line and potentially the health and well-being of their loyal consumers. More specifically, brand owners have discovered that adding security features on packaging can greatly mitigate:

  • Lost revenue and declining market share
  • Patient or consumer safety and related liability
  • Recalls due to product adulteration and fraud
  • Long-term erosion of consumer confidence and brand value

Counterfeiting a branded product has become easier as the supply chain expands to a global model where product visibility decreases, resulting in more opportunities for illegal activities. For years, many consumers knew of counterfeiting in terms of fake designer handbags, clothing and jewelry. Now, more consumers are becoming aware of counterfeit beauty products such as makeup, hair products, sunscreen and more. Even ‘man’s best friend’ isn’t safe from counterfeit pet food, prescriptions and over-the-counter medicines. (Source: Fake goods are not fake news, Denver Business Journal, Oct. 2018)

Flexible Security Features in Today’s Market

Product security has shifted in the last 30-35 years. In the 1980’s, the first mass deployed authentication feature, in the form of secure holography, began to show up in the industry. Early adopters were major pharmaceutical, wine/spirits and consumer electronics firms. Today, brand protection is on the radar of any company with a significant investment in high-end branded products.

Different levels of security, varying ink technologies, and numerous covert and overt physical features can be applied to all types of packaging to challenge counterfeiters and help you stand out against your competition.

Brand protection begins with the understanding that it is a process and not a product. A product undergoes the product life cycle stages: introduction, growth, maturity and decline. Brand protection as a process is a series of actions, changes and functions all directed toward the pursuit of a return on investment (ROI).

The first step of any brand protection platform is a risk assessment strategy based on the three risk dimensions: product-specific, geographic and supply chain. This then leads to solutions that match the needs recognized by that assessment.

When thinking about a multilayered approach, there are several elements to consider, starting with the type of packaging being used. The types of packaging range from flexible, barrier and decorative to promotional, rigid or dispensing. Keep in mind that no matter the type of packaging, there is an appropriate security feature to apply.

One approach in a  multilayered solution is to utilize visible color-shifting inks with hidden machine-readable covert components within the ink blend (incorporate photo of our folding carton). The overt feature is a recognizable first line of defense, while the covert elements ensure evidence of authenticity. Even deeper, a molecular level marker can be added to create a forensic and court-defensible component. Most higher-security overt and covert inks are available in a wide variety of printing capabilities, including digital, offset, rotary and flexographic, and are hard to reproduce.  These solutions are applicable to most substrates and customization is available in a variety of colors and coating types.

Brand Protection with Good Design—All Stakeholders Benefit

Today’s brand owners have more security choices than ever before, and should realize there are effective ways to combine brand protection, great branding and regulatory needs into one design. With domain guidance and expertise, brand owners can leverage the right functional authentication feature combination that also satisfies key stakeholders within the organization. Some of the most common interests and outcomes sought by primary stakeholders are:

  • Brand Protection: Desire to protect a product (brand) against counterfeiters, diversion and illicit trade. The solutions that help detect, quantify and remediate through one or more enforceable actions create a positive return on investment for the company.
  • Packaging: Security solution that won’t slow down the production line or existing process. Be sure to consider the effects of implementation before selecting the solution, including graphic design, printing processes, manufacturing processes, and risk to production interruption or delays.
  • Marketing: Features that don’t take away from the aesthetics of the artwork or design. The marketing department has worked hard to come up with the preferred design, color schemes and budget considerations for packaging – therefore, it’s best to only make minimal changes when adding security features to the brand.

The challenge of incorporating effective brand protection with great branding has gotten easier with the flexibility of multilayered authentication solutions. These solutions won’t jeopardize the look of the packaging; in fact, they can add to the product appeal.

Download PDF Here

Authentix® UK Named in This Year’s York Top 100 Business List

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ADDISON, Texas, November 14, 2019 — Authentix, the authority in authentication and information services is proud to be part of this year’s York Top 100 Business list. Moving up from 85 in 2018 to 50th position is a testament to the hard work and dedication of the York, UK based team and all those who support them in delivering advanced authentication solutions.

As a joint effort ofYork Business School at York St. John University, Make It York and The Press, the York Top 100 Business List has been in publication for three years. This year’s process involved a thorough framework that included defined search parameters and a public financial reporting database software platform for data collection containing information on more than 11 million companies in the UK and Ireland.

The search and review process included companies within the City of York Council boundary and some postal codes adjacent to the city boundary. York Business School looked at elements such as turnover, balance sheet and/or shareholder funds, profit levels, growth rate over the past two years, and headcount.

“We are honored to be a thriving part of the York business community. Being recognized in the York Top 100 Business List is a testament to the commitment of the entire Authentix York team, and all of our employees who are focused on our clients and the communities we serve,” said Kent Mansfield, chief sales and marketing officer. “With our new position this year and being part of the top 50 Firms, our team is motivated to continue our company’s strategic focus to expand our reach as a global organization helping to create a world of confident commerce.”

About Authentix:

As the authority in authentication solutions, Authentix helps customers thrive in supply and distribution chain complexity. Authentix provides advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact and commercial products have robust market opportunities. The Authentix partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.

Authentix, Inc. has offices in North America, Europe, Middle East, and Africa serving clients worldwide. For more information, visit https://www.authentix.com. Authentix® is a registered trademark of Authentix, Inc.

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European Tobacco Products Directive: A Cautionary Note

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By Tim Driscoll, Senior Vice President and General Manager, Currency & Tax Stamp, Authentix

To achieve compliance with the World Health Organization’s Framework Convention for Tobacco Control (FCTC), the European Union’s Tobacco Products Directive (EUTPD) became applicable in member states on May 20, 2016. The FCTC, like many overarching regulatory directives, leaves many of the implementation details up to the signatories. Enforceable as of May 20, 2019, EUTPD involves a wide range of stakeholders — security feature providers, secure document printers, tobacco manufacturers, tobacco distributors, data collection and storage companies, traceability solutions providers — and, of course, member state authorities. The EUTPD chose a disaggregated implementation model with multiple stakeholders supporting different parts of the program. Following a disaggregation strategy can help one to select a collection of best practices, which provide an optimal solution for their challenge. Unnecessary disaggregation of the solution, however, can introduce delays and confusion as well as an increased possibility of program fraud. The distributed nature of the EUTPD should be avoided by other countries or economic unions as they consider how to implement their own tobacco track and trace programs.

Centralization: The Key to an Effective Excise Tax Recovery Program

The EUTPD requires that each tobacco product is marked with a unique identifier (ID) to be generated by ID issuers that are financially and legally independent of the tobacco industry. The directive also calls for tamper-proof security features comprised of visible and invisible elements that will allow authorities to determine if the product is genuine or illicit. The tax stamp/security seal must have a combination of overt, semi-covert and covert features and include information such as the unique ID, location and date of manufacture, destination, etc. In the EU model, the three critical responsibilities of ID issuance, stamp design and printing, as well as data collection and storage providers, can be filled by three separate companies.

The International Tax Stamp Association (ITSA) has commented on various short comings of the EUTPD related to the lack of specificity regarding feature selection and the degree of responsibility provided to the tobacco companies.1, 2 Authentix concurs with many of the concerns expressed by ITSA and would like to add the following points to consider.

Unnecessary Disaggregation

The EUTPD system contains three separate databases:

  1. Economic Operator and Unique IDs managed by the ID issuer
  2. A primary repository for the management of production data by a third party under contract with the tobacco manufacturer
  3. A second repository that serves as a surveillance data store for member states and their competent authorities to evaluate the program and identify cases of illicit trade.

As a result of how the primary repository was defined, a member state is unable to select a single supplier to manage the data associated with the generation of the unique IDs and their supply chain events.

Designing a program with multiple databases managed by multiple suppliers creates the possibility of conflict between suppliers. Confusion or disagreements may arise when suppliers follow slightly different implementation approaches to the same standard. Also, troubleshooting issues often become more difficult when parties with shared responsibilities are involved. A comprehensive excise tax recovery program is a complex system. For other countries or economic unions considering FCTC compliance, we strongly recommend that the system is not designed to be unnecessarily complicated.

Role of Tobacco Affiliated Companies

It is clear that some program activities, such as the application of authentication and traceability elements onto the packaging, are best fulfilled by tobacco manufacturers. Other responsibilities such as controlling the production data and issuing aggregation codes have also been assigned in the EUTPD to tobacco companies and companies with strong ties to tobacco. And while many of these entities are compliant participants wanting to leverage these programs to protect their revenues from losses due to illicit trade, some are not.

For those starting to consider their approach to the FCTC compliance, this issue can be avoided by centralizing the program and selecting a single trusted partner. Even if one does not believe that there is a significant amount of illicit tobacco trade in their countries, why even introduce the possibility or concern that tobacco affiliated companies may be exploiting the system? Questions of fraud will persist in an implementation model where the manufacturers manage the production data; whereas if a single service provider is managing a central database, concerns of undue influence are eliminated.

Recommended Approach

Getting the implementation of a tobacco track and trace program right is critical as the recovered lost taxes fund government programs intended to empower citizens, create opportunities and change lives. Authentix believes the best way to achieve these goals is to implement a comprehensive excise tax recovery program involving a single third-party partner responsible for registering the members, generating the unique IDs, and collecting and managing the data in a central database with surveillance controlled by the government.

Authentix – A Comprehensive Tax Stamp Solutions Provider

Authentix collaborates with finance ministries, revenue agencies and custom departments to better understand their tax collection challenges and the complexity of supply and distribution chains operating within their country. Leveraging our experience as a provider of comprehensive tax stamp solutions, Authentix works with FCTC signatories to help them comply with the Protocol. In addition, as a stakeholder in the EUTPD, Authentix enables a European Ministry of Finance to serve as the designated ID issuer for two EU Member States. As a result, we have developed effective implementation and execution strategies to meet WHO and individual signatory mandates.

With the recent acquisition of UK-based secure printing company Security Print Solutions Limited (SPS), Authentix has expanded its security document design and printing capabilities while greatly enhancing its existing tax stamp program proficiency. This relationship strengthens our ability to design tax stamps that resonate with each government and enables us to incorporate a combination of highly effective security features at competitive pricing. Serving as a single source provider of registration, ID issuance, tax stamp creation, printing, data collection and analysis, we collaboratively partner with our customers to help them thrive in supply and distribution chain complexity. Authentix’s flexibility also enables us to provide services individually, seamlessly integrating with existing operations and third-party systems.

The Authentix Difference

The Authentix difference is driven by the Authentix Information System (AXIS®), our data collection, analysis and reporting software platform. AXIS consumes data collected through the life cycle of the unique IDs (generation, printing, delivery, application and activation, supply chain distribution, and retirement) and correlates it with additional data sources to highlight various patterns and abnormal events. This increases customer awareness of illicit trade, the efficacy of track-and-trace programs, and anticipates potential threats before they happen.

Authentix has deep experience in implementing new programs driven by government regulations. As an organization that provides authentication and traceability solutions to both commercial and government clients, we work effectively with all parties as we strive for the optimal balance between compliance and production operation realities. This ability allows us to smooth the way for our customers’ success and deliver on our mission to safeguard the integrity of global commerce.

For more information, please visit authentix.com/governments/taxstamp.

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1 ”Tracking and Tracing of Tobacco Products: Defining Roles and Responsibilities in Compliance with the FCTC Protocol” 2 ”How to Make Unique Identifiers for Tobacco Track and Trace Secure and Independent from the Tobacco Industry: A Standards-Based Approach

Complying With WHO’s Framework Convention for Tobacco Control

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By Tim Driscoll, Senior Vice President and General Manager, Currency & Tax Stamp, Authentix

World Health Organization’s Framework Convention on Tobacco Control

 

“The WHO Framework Convention on Tobacco Control (WHO FCTC) is the first treaty negotiated under the auspices of the World Health Organization. The WHO FCTC represents a paradigm shift in developing a regulatory strategy to address addictive substances; in contrast to previous drug control treaties, the WHO FCTC asserts the importance of demand reduction strategies as well as supply issues.

The WHO FCTC was developed in response to the globalization of the tobacco epidemic. The spread of the tobacco epidemic is facilitated through a variety of complex factors with cross-border effects, including trade liberalization and direct foreign investment. Other factors such as global marketing, transnational tobacco advertising, promotion and sponsorship, and the international movement of contraband and counterfeit cigarettes have also contributed to the explosive increase in tobacco use.”WHO Framework Convention on Tobacco Control

The WHO FCTC treaty was enacted in 2005 and passed its last milestone on May 20, 2019, which focuses on compliance directives and guidelines. To date, the treaty has 168 signatories and is legally-binding in 181 ratifying countries.

Following the treaty’s ratification, the WHO realized the issue of illicit trade in tobacco and tobacco-related products (e.g., smuggling) required its own treaty. The WHO’s second international treaty, The Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol), builds upon and complements Article 15 (see call out below) of the FCTC which addresses means of countering illicit trade in tobacco products and the measures member states must take to take to eliminate it.

Article 15 concerns the commitment of Parties to eliminate all forms of illicit trade in tobacco products. The Protocol to Eliminate Illicit Trade in Tobacco Products builds on this article. It includes obligations concerning the marking of tobacco packaging to enable tracking and tracing, the monitoring of cross border trade, legislation to be enacted, and confiscation of proceeds derived from the illicit trade in tobacco products. Parties are also required (in accordance with national law), to cooperate with each other and with international organizations in combating illicit trade

The Protocol was adopted in 2012 and open for signature January 2013–2014. It went into effect September 25, 2018 after the mandatory 40 member states had acceded to, ratified, accepted or approved it.

The Protocol: Track and Trace Programs

The Protocol focuses on the global tobacco epidemic from both a demand reduction and supply regulation position. It requires that signatories not only monitor and regulate manufacturers and distributors, but also apply other measures that address how the public interacts with tobacco and tobacco-related products (e.g., education, cessation programs, transitioning farmers from tobacco to other crops).

A key component in the Protocol (Part 3, Article 8) is the supply chain track-and-trace program which requires all tobacco and tobacco-related products to have a unique ID placed on the packaging. This ID enables products to be tracked throughout the supply and distribution chain (track), from manufacturer to first retail sale. Those movements are recorded and the data is stored with independent data storage providers. This data must be made available to government entities to help them determine where the item has been in the supply chain (trace) and support enforcement purposes.

Benefiting the Public

By eliminating the illicit trade in tobacco products, the track-and-trace program can help revenue authorities recover lost taxes needed to fund public programs. Fundamental is its efforts to protect the health and welfare of the public, particularly young people, by curbing tobacco use and protecting them from the even more harmful aspects of contraband cigarettes. It addresses issues from secondhand smoke exposure to lobbying standards to Air courier / freight forwarder or shipping service concept : Boxes, a truck, white plane flies over a laptop, depicts customers order things from retailer sites via the internet and ship worldwide.social economic programs to seizing contraband. Compliance with the FCTC promotes these efforts, helps protect public health and welfare, and enables a safer market for legal tobacco products − and that’s good news for everyone.

Choosing the Right Authentication Partner

To comply with the FCTC, signatories must use an independent party to register entrants and generate and issue ID codes for tobacco products. However, choosing the right authentication partner that understands your country’s challenges, supply chain, tax revenue laws and the types of illicit trade impacting your citizens, can seem daunting. Authentix collaborates with finance ministries, revenue agencies and custom departments to better understand their tax collection challenges and the complexity of supply and distribution chains operating within their country. Leveraging our experience as a provider of comprehensive tax stamp solutions, Authentix works with FCTC signatories to help them comply with the Protocol. In addition, as a stakeholder in the EU’s Tobacco Products Directive (EUTPD). Authentix enables a European Ministry of Finance to serve as the designated ID issuer for two EU Member States. As a result, we have developed effective implementation strategies to meet WHO and individual signatory mandates.

Our experience combined with AXIS®, our data collection, analysis and reporting software platform, enables us to provide actionable insights to our customers, delivering a deeper understanding of the collected data to help refine tax stamp programs and improve compliance, increase tax revenue and prevent fraudulent activities.

Authentix has been implementing excise tax recovery programs for more than 25 years. As an independent provider, our position allows us to effectively work with all involved parties, including both tobacco manufacturers and government agencies. This ability enables us to reduce the friction inherent in any compliance program and smooth the way for our customers’ success.

With the recent acquisition of Security Print Solutions Limited, the United Kingdom’s leading tax stamp printer, Authentix is further expanding its capabilities and technologies for an even stronger partnership with Finance Ministry and Revenue Agency customers.

Authentix. The Authority in Authentication.

Authentix provides advanced authentication solutions for governments, central banks and commercial products, ensuring local economies grow, banknote security remains intact and commercial products have robust market opportunities. Authentix offers both comprehensive tax stamp programs as well as customized point solutions to assist in tax collection.

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