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The Holography Times, March 2012, Volume 6, Issue no 17


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Role of holographic excise adhesive label (HEAL) in securing tax revenue, protecting consumer and curbing illicit liquor trade

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The Holography Times, March 2012, Volume 6, Issue no 17

  1. 1. The Holography Times The Holography Times Endeavour to protect products and people March 2012 | Volume 6 | Issue 17 Andhra Pradesh Chhattisgarh Haryana Himachal Pradesh Jharkhand* Karnataka Kerala Madhya Pradesh Meghalaya Orissa Punjab Rajasthan** Sikkim Tamilnadu Uttrakhand Uttar Pradesh Delhi NCR (UT) Puducherry (UT) 17 States in India used more than 1500 crore holographic excise adeshive label (HEAL) in 2011. This has not only minimized the hooch tragedies and duplication, but has also substantially increased the excise revenue collection in States. HoMAI quarterly newsletter 1 Role of Holographic Excise Adhesive Label (HEAL) - Securing tax revenue - Protecting consumer - Curbing illicit liquor trade * Tender fl oated in January 2012 ** State excise department has stop using HEAL since November 2010
  2. 2. The Holography Times News Bytes 2 Note: Products shown here are only for reference
  3. 3. The Holography Times Viewpoint Dear Readers, Welcome to the 17th issue of The Holography Times. Illicit liquor trade poses a serious threat to government, socially as well economically. Excise duty which is an important source of revenue is continually under threat from the practice of illicit trade. Considerable amount of money which could be used to benefi t the government services of a country are being diverted to the pockets of criminals participating in illegal trading. In addition, the illicit trade in liquor poses a serious threat to consumer health. To counteract it, some State governments have implemented holographic excise adhesive label (HEAL) as part of their anti-counterfeiting strategy. This has not only minimized the hooch tragedies and duplication, but has also substantially increased the excise revenue collection in States. This issue brings our cover story on ‘Holographic Excise Adhesive Label. Apart from this, the issue also covers article on “Step for a better usage of technologies”, along with industry updates and much more. As always we look forward to receive your feedback/ critics. Please e-mail us at With Regards, C S Jeena In this issue Holographic excise adhesive label (HEAL) 7 Protection against counterfeiting By Jean-Michel Loubry 13 News Bytes 4 Counterfeit Seizure Report 16 Global Patents 17 Upcoming Events 18 Latest Tenders 18 3
  4. 4. The Holography Times News Bytes Liquor bottles in Jharkhand to carry holograms It will be 18th state in the country to adopt the practice aimed at increasing revenue and checking sale of spurious liquor New Delhi: Jharkhand will be the 18th State in the country that will be shortly making a mandate for all the liquor companies to use hologram on their bottles to prevent counterfeiting. The step will help the Jharkhand State excise in increasing revenue as well as in minimizing the tragedies due to illicit liquor, a statement from Hologram Manufacturers’ Association of India (HOMAI) said. In India more than 17 States & UT are already using hologram on liquor bottles. Mandated usage of hologram in these States like Uttar Pradesh, Tamil Nadu, Uttrakhand, Madhya Pradesh, Puducherry, Delhi, Chhattisgarh, Kerala, etc. has not only minimized the tragedies due to spurious liquor but have also substantially increased the excise revenue collection by more than 25-30 per cent. For example the state using holograms are earning more revenue. In 2010-11 the revenue earned by Tamil Nadu and Uttar Pradesh excise was `8,115 crore and `6,725 respectively, while States which are similar in capacity to population and size such as Maharashtra and West Bengal only able to peg `5,800 crore and ` 1,770 crore only. ■ Source: Scriba Nano tecnologie launches multi-functional labels Scriba Nanotecnologie, an Italy-based security technology company, has introduced EN-TAG multi-functional labels to enable pharmaceutical companies to authenticate their products while ensuring drugs are kept at correct temperature conditions. EN-TAG is an ultra-miniaturized data matrix technology applied to a standard holographic feature or relective surface, such as metallic foils, hologram strips. The covert feature offers the highest level of security combined with high information content (~30 kB per cm²). The information content of a single EN-TAG is 20 to 100 times higher than that offered by a standard 2D data matrix. It equips each product with a counterfeit-proof data carrier label for authentication and traceability purposes, and is designed to enhance an existing holographic substrate. The labels can be used to store digital data such as company logos, videos, or drug pedigree information in any language, including drug name, dosage form and strength, expiration date, lot number. EN-TAG can be used as stand-alone labels or complemented with other overt or covert features for additional layers of security. EN-TAG has an integrated authentication technology with a thermo-sensitive, FDA-approved polymeric layer. Thermal monitoring is made possible by detecting the subtle optical changes that take place when the tag is exposed to temperatures exceeding a pre-set threshold. Threshold temperatures are fully customizable to speciic temperature requirements. The secure information contained is not affected if an EN-TAG is exposed to higher-than-threshold temperatures. Dr Claudio Rota, business development advisor at Scriba Nanotecnologie, said, ‘One of the features of this technology is its ability to offer the industry a truly unique, low-cost solution for authenticating their drugs, as well as ensuring that their products have been properly stored during transport. For temperature-sensitive products in particular, such as biologics, food products, and wine, the technology is a irst-in-class security feature with a clear-cut value proposition.’ ■ Source: 4
  5. 5. The Holography Times News Bytes UAlbany Nanocollege APDN partner on nanochip anti-counterfeiting program Collaborative research will advance DNA deposition technologies targeting over $300B market for ‘nanosecurity’ applications in nanoelectronics, aerospace and defense The College of Nanoscale Science and Engineering (CNSE) of the University at Albany and Long Island-based Applied DNA Sciences, Inc. (OTCBB:APDN) announced a partnership to enable nanotechnology-driven innovations that would play a critical role in preventing the counterfeiting of computer chips – a collaboration in the groundbreaking area of “nanosecurity” that initially targets the $20 billion defense industry chip market and has the potential to impact nanoelectronics and aerospace markets well in excess of $300 billion. Research and development will include the integration of new methods for DNA deposition on nanoelectronics wafers and computer chips both prior to, and including, inal packaging to ensure the integrity and security of processed wafers. The partnership between CNSE and APDN will support research, development and deployment of authentication protocols and procedures in established process lows, including CMOS, MEMS, photonics, and other device derivatives, as well as advanced packaging technologies, such as 3-dimensional wafer-to-wafer and die-on-wafer. When realized, these advances would enable comprehensive supply chain protection well into the foreseeable future. The collaboration comes on the heels of the enacting of the 2012 National Defense Authorization Act. This law will signiicantly strengthen protections against the wave of counterfeit electronic parts coming into the defense supply system by requiring that military suppliers and government agencies create and implement counterfeit detection and avoidance systems, among many other strict anti-counterfeiting provisions. These new mandates could be enabled through a CNSE-APDN partnership. The APDN system marks computer chips with uncopyable DNA codes, which can then be used to authenticate the originality of chips anywhere along the supply chain. The APDN technology can not only enhance inspection, but also goes much further to forensically verify originality, using botanical DNA to create “tags” to mark the product in a unique way. As part of the collaboration, CNSE and APDN intend to establish a joint technology development partnership model – engaging nanoelectronics device fabricators, leading aerospace and defense system integration companies, and state and federal government agencies – to further advance the implementation of counterfeit protection measures. CNSE recently submitted a technology development proposal in partnership with APDN and other leading nanoelectronics companies in response to a Broad Agency Announcement issued by the Intelligence Advanced Research Projects Activity (IARPA), which invests in technology programs that have the potential to provide our nation with an overwhelming intelligence advantage over future adversaries. ■ Source: Skanem acquire 51 per cent stake in interlabels Skanem Group one of Europe’s largest producers of self-adhesive labels partners with the Indian labeling company Interlabels in order to take part in a growing market in South Asia. Skanem is buying 51 per cent of the shares in Interlabels. Owner and CEO of Skanem, Ole Rugland, says,“India is a market with a great potential and rapid consumption growth. Through this partnership, we get access to this exciting market.” The introduction into India represents a strategically important step forward for Skanem Group. This is Skanem’s irst establishment in India, but Skanem already has one factory in Asia, which is located in Bangkok, Thailand. ■ Source: 5
  6. 6. The Holography Times News Bytes Sai security printers secures $7m funding from aureos capital Aureos South Asia Fund has invested $7 million or ` 35 crore in Sai Security Printers Pvt Ltd (SSPPL), a paper packaging company based in Faridabad and Bangalore. The fund is managed by Aureos South Asia Managers Ltd, a subsidiary of the emerging markets PE fund manager Aureos Capital, which has $1.3 billion under management. “SSPPL will use the funds to build on its already strong production and technology capabilities, and will work towards moving into new markets, adding new customers and providing end-to- end packaging and printing solutions while increasingly focusing on high-margin business,” said Vijay Raghavan, managing director of SSPPL. The company started out as a security printing business and evolved into a multi-product packaging company. It manufactures labels and mono-cartons for pharmaceutical, food and beverage and FMCG industries, and currently employs around 600 people. “SSPPL has a strong customer base, marked by high customer retention. Its strategy for future development includes expansion into recession-resilient and higher-margin products for the pharmaceutical, beverages and FMCG sectors,” commented Balaji Srinivas, Managing Partner of Aureos India. Incorporated in 2001, Aureos has extended its footprint to more than 50 emerging markets across Asia, Africa and Latin America by establishing 17 regional private equity funds. These funds are managed through a network of 28 ofices worldwide, by a team of over 90 investment professionals. Aureos has recently announced that it plans to raise $200 million or ` 900 crore for its new India fund. The Aureos India Fund II will focus on investing in companies across emerging sectors and target tier II and tier III cities, which remain below the radar of mainstream international investors. Its last deal took place in July 2011 when it invested in Chennai-based publishing services provider Newgen Knowledge Works Private Limited. ■ Source: 6
  7. 7. The Holography Times Cover Story Holographic excise adhesive label (HEAL) Securing tax revenue, protecting consumer and curbing illicit liquor trade by C S Jeena “The liquor industry is a major source of excise revenue for all States in India. In fact, it is the second largest revenue contributor for many States after sales tax. More than two decade ago, Tamilnadu Government took the revolutionary step and introduce fi rst holographic excise adhesive label (HEAL) in India. The step taken by Tamilnadu was appreciated and further adopted by many other States in India. Today, more than 17 States excise department are using HEAL. This has not only minimized the hooch tragedies and duplication, but has also substantially increased the excise revenue collection in States. This article highlights the role of HEAL as an effective anti-counterfeiting solution in securing tax revenue, protecting consumer and curbing illicit liquor trade. Globally, tax revenue from excise duties on the production and sale of beverage alcohol contribute an important source of Government revenue. The inancial revenues for European governments arising from the production and sale of beer, i.e., taxes paid by breweries, beer consumers and employees together, total around € 38 billion a year, including € 19 billion in VAT and € 10.5 billion in excise duties. This represents more than total annual government expenditure of countries such as Finland or Poland (estimated at around €34 billion).1 In the United States, the beverage alcohol industry pays over $ 21 billion in directly to State and local revenue during 2008.2 Scenario in India Under the Indian constitution, liquor is one commodity which the States are entitled to charge excise duty (Article 246)3. Revenue from excise duty is a signiicant contributor for many States in India accounting for more than 10 per cent of their own tax revenue. In fact, it is the second largest source of income for States after sales tax (igure 1 and table 1).4 The only state that does not depend on alcohol to generate revenue is Gujarat, which imposes prohibition in 2000-01. The major states in which liquor contributes a major chunk of their revenue kitty (F.Y. 2010- 11) include Andhra Pradesh (` 9014 cr), Karnataka (` 8345 cr), Tamilnadu (` 8115 cr), Uttar Pradesh (` 6725 cr), Maharashtra ( ` 5800 cr), Madhya Pradesh (` 3604 cr), Punjab (` 2461 cr), Rajasthan (` 2859 cr), Haryana (` 2100 cr) Bihar (` 1542 cr).5 Motor Vehicle Tax 5% Sales Tax 62% Other Taxes 9% Stamps Registration 11% State Excise 13% Figure 1: Composition of State tax revenues for 2010-114 *Other taxes include income from agricultural income, land revenue, electricity duties, entertainment taxes and other taxes duties 1. Ernst Young, 2005 2. Distilled Spirits Council of the United States, 2008 3. ‘Article 246’ The power of the state government to levy and collect the state excise duties is derived from Article 246 of the Constitution of India and entry 51 of list II – State list with seventh schedule thereto. 4. Reserve Bank of India, Study on State Finances Budget, 2010-11 5. Press releases, State excise department 7
  8. 8. The Holography Times Cover Story Table 1: Budget estimates of States and Union Territories for period 2010-114 State a) Tax revenue b) State own c) State excise d) Percentage of (` lakh) tax revenue revenue excise revenue in (` lakh) (` lakh) State own tax Andhra Pradesh 6150421 4699900 751200 16 Arunachal Pradesh 83037 14400 1700 12 Assam 1257041 497584 25946 5 Bihar 3424412 1064393 140000 13 Chhattisgarh 1231135 750548 132000 18 Goa 277506 221849 11967 5 Haryana 1866300 1646929 210000 13 Himachal Pradesh 459034 295552 54946 19 Jammu Kashmir 641603 350528 28000 8 Jharkhand 1230700 596728 52500 9 Karnataka 4528841 3622832 742500 20 Kerala 2570999 2088423 183621 9 Madhya Pradesh 2971759 1867018 340000 18 Maharashtra 7472155 6383832 580000 9 Manipur 123281 28874 600 2 Meghalaya 131602 46181 10019 22 Mizoram 68132 11826 206 2 Nagaland 86040 20330 362 2 Orissa 2036418 1036001 95050 9 Punjab 1921563 1630800 252000 15 Rajasthan 3127307 1902086 245000 13 Sikkim 71162 21124 5550 26 Tamilnadu 5184001 4143832 750818 18 Tripura 173605 66705 7000 10 Uttrakhand 636890 402430 68693 17 Uttar Pradesh 6696669 3525489 569531 16 West Bengal 3521379 2000773 175978 9 Delhi NCR (UT) 1558250 1558250 168000 11 Puducherry (UT) 131715 131715 47500 36 Prominent Sectors Based on beverage type the Indian alcohol industry has three prominent sectors; a) the IMFL / Beer / Wine sector, b) the country liquor sector, and c) the illicit liquor sector. a) IMFL / Beer: Among these the IMFL is organized centralized in India and constituted 34 per cent of alcohol market in India. In 2010, sales volumes of the IMFL industry were approximately 1,985 million liters or 221 million cases. revenue b) Country Liquor: In contrast, to the IMFL and beer sector, the country liquor industry is more decentralized. It is regionalised and fragmented due to high state entry barriers requiring presence of a distillery in the state and constituted 37 per cent of market with volumes of 250 million cases in 2010. c) Illicit liquor industry: Parallel to this, the illicit liquor industry has also seen an increase in India. A signiicant proportion of the alcoholic drink 8
  9. 9. Cover Story The Holography Times in India, is produced illicitly by the informal sector or consists of “Second or D Market” (tax evaded beverages) and therefore remain undocumented. It has been speculated that such unrecorded consumption may be as much as 45 per cent of all use, although there is very little recent data available.7 Reports of excise raids on illegal distilleries and coniscation of illicit alcohol are also regularly featured in the media. Alone in Karnataka (2010-11), the department conducted 59,124 illicit distillation centres in State, registered 10,924 cases and arrested 4,597 persons. The department has seized 69,984 boxes of IMFL, 116,903 boxes of beer, 106,071 boxes of molasses and 107,058 boxes of arrack.8 In 2011, Maharashtra State excise department has seized counterfeit and illegal liquor amounted `16 crore. It was 25 per cent higher than the previous rate seized amount equivalent to `12.8 crore in 2010. The trend continues in 2012, as `1.5 crore illicit liquor have been seized by State excise department till February 2012. The problem is such severe that State excise oficer in Maharashtra has demanded gun for protection of their enforcement oficer.9 Challenges for State Excise There are various reasons due to which illicit liquor / smuggling increases. It can be prohibition policy of the state, inter-state smuggling of alcohol products, tax duties and lack of proper anti-counterfeiting strategy. For example Gujarat is adopting a complete prohibition policy in state. Irionically this step increases the consumption of illicit liquor and loss of excise revenue amounted `3000 crore per annum.10 Rajasthan State excise department stopped using HEAL from November 2010 which again resulted in increased number of illicit liquor. Recently a factory has been seized in Bhanipura (Rajasthan) seizing 1050 litres illicit spirits.11 The State Government and Departments faces various challenges i.e. • How to protect consumer from ill effects of illicit liquor? • How to differentiate fake liquor bottles from genuine? • How to combat smuggling of IMFL Country liquor? How to ensure fool proof labeling and supply chain? • How to avoid reilling / reusing of genuine liquor bottle with illicit liquor? • How to increase excise revenue? Global practices to ight against illicit liquor/ counterfeiting A solution can be excise adhesive labels (EALs) or tax stamp which applied to bottles as self-adhesive labels. Known by a variety of names (excise stamps, excise adhesive label, tax stamps, tax seals, banderols), these are the weapon of choice for many government around the world to secure the valuable revenue Industry Breakup Mn cases (2010)6 Beer 197 29% IMFL 234 34% IMIL 250 37% WINE 1 0% Segment Volume % of IMFL (Mn cases) Whisky 137.5 59 Brandy 43.4 19 Rum 43.8 19 Gin 2.2 1 Vodka 7.3 3 Others 0.2 0 Source: IWSR, Industry Company Estimates 6. IWSR, Industry Company Estimates 7. Lal Chand Report 8. Business standard, 29/06/2011 9. Mid Day, 27/11/2011 [excise department demands guns] / CNN, IBN Live, 16/12/2011 10., Dec 11, 2002[Prohibition- Gujarat worst keep secret] The Times of India, June 19, 2009 [Gujarat seeks Rs 3000 cr for liquor ban] 11. Rajasthan Patrika, 19/01/2012 [Fake illicit liquor factory seized] 9
  10. 10. The Holography Times Cover Story Table 2: HEAL used by some countries12 Country Usage of HEAL on Effect in Revenue Ukraine Alcohol Tax revenue double in 4 years equivalent to USD 3 billion Latvia Alcohol Increase of USD 21 million in 2 years Serbia Alcohol Cigarettes 10 times increase in cigarette revenue / 5 times increase in spirits revenue Hungary Alcohol and Cigarettes NA derived from customs and excise duty on alcohol, acting as proof of originality and authentication and a barrier to the distribution of counterfeited products. Hungary Latvia has been using HEAL since 1994-95 and have resulted in phenomenal increases in tax receipts.12 (See table 2) As of 2007, 59 countries are using HEAL for spirits. It is estimated than 33 billion holographic stamps were produced in 2007, making them the highest secure product produced after bank notes.13 Although, all these countries are keep upgrading their tax stamp with advanced overt covert features to be ahead against counterfeiters. Practices in India The revolution of irst EALs was introduced by Tamilnadu Government in early eighties. These were on a thin glassine based paper with a strong adhesive. Each label was serial numbered and was given by Tamilnadu Govt. to companies that illed IMFL against payment of tax.14 Then in 1999-2000, Tamilnadu again take the initiative and started using India irst HEAL15, which was followed by Uttar Pradesh in 2001 Kerala in 2002. Today, more than 17 states are using approximately 15 billion HEAL. 75 per cent of these are used in form of full Polyester holographic labels and 25 per cent paper based, with holographic element. Integration of digital and non-digital (Importance of visual authentication) Recently, Andhra Pradesh has become first state to start using a combination of authentication and digital technology as it is going to use advanced HEAL comprising hologram for authentication and bar code for track trace. However, track and trace technology itself have vulnerabilities. Physical and sensory authentication tools will still be needed both during and after the development of track and trace systems around the world. If we do not integrate both digital and non-digital (physical and sensory) authentication methods into our approach, then we risk wasting the major investments that are about to be made in track and trace. Examiner may need to verify the liquor bottle visually due to lack of availability of reader, power failure, network failures or simple time constraints at crowded control sites. An electronic authentication is not possible everywhere especially in remote areas so it generate a 12. Reconnaissance international 13. Reconnaissance international 14. PRS Permacel Ltd 15. Holostik India Limited 10
  11. 11. Case Study The Holography Times Table 3: State and Union Territory (UT) using HEAL with annual capacity (in 2011)16 State/Union Territory Year of Introduction* Annual Volume (crore) Andhra Pradesh* 2012 2,64 Chattisgarh 2005 72 Haryana* 2009 90 Himachal Pradesh** 2011 7 Jharkand (in process)**** 2012-13 54 Karnataka** 2002 240 Kerala 2002 70 Madhya Pradesh 2007 72 Meghalaya 2009 NA Orissa 2007 48 Punjab** 2011 50 Rajasthan*** 2005 72 Sikkim 2010 NA Tamil Nadu 1999 300 Uttrakhand NA 15 Uttar Pradesh 2001 180 Delhi (UT) 2009 36 Puducherry (UT) 2006 12 * State using paper based EAL earlier, now decided to use HEAL; ** State using paper based EAL with or without holographic component; *** State excise department stopped the usage of HEAL since November 2010; **** Figure of Jharkhand are for year 2012. NA Not Available requirement of an instant visual authentication like a hologram with advanced levels of security features for authentication. Beneit of using HEAL The usage of HEAL by these States has proved the acceptance and effectiveness of hologram as authentication device. It has helped the department in combating various challenges such as; 1. Provide visual authentication: HEAL plays an important role for visual authentication to differentiate fake liquor bottle from genuine, for both enforcement authorities and for individual consumer. These HEAL are customized with overt and covert features, being overt for a lay man consumer and covert forensic feature for enforcement authorities which can be proof of the authenticity of bottle. Further, holograms are be best overt authentication feature available, as an electronic authentication is not possible everywhere especially in remote areas (India). 2. Increased tax revenue: According to various reports and HoMAI,17 the mandated usage of security HEAL in States such as Uttar Pradesh, Tamil Nadu, Uttrakhand, Madhya Pradesh, Puducherry, Chhattisgarh etc. have increase revenue collection. For example Tamil Nadu and Uttar Pradesh, excise revenues were `8116 16. Approximate quantity calculated on based of State excise tender document 17. Hologram Manufacturers Association of India 11
  12. 12. The Holography Times Cover Story Table 4: Comparison of key State with population more than 6 crores18 a) State using excise adhesive labels State Revenue Revenue Inc in turnover Population 2005-06 2010-11 over last 6 years (2011) ` Crore ` Crore in Crore19 Andhra Pradesh 2685 9014 6329 8.46 Tamilnadu 3177 8116 4939 7.21 Karnataka 3397 8345 4948 6.11 Uttar Pradesh 3089 6726 3637 19.95 Madhya Pradesh 1370 3604 2234 7.25 Rajasthan* 1276 2859 1583 6.86 *State excise department stopped the usage of HEAL since November 2010; b) State not using any type of excise adhesive labels State Revenue Revenue Inc in turnover Population 2005-06 2010-11 over last 6 years (2011) ` Crore ` Crore in Crore19 Maharashtra 2824 5800 2976 11.23 West Bengal 743 1770 1026 9.13 Bihar 319 1542 1224 10.3 crores and `6725 crores respectively in 2010/11. By contrast, in states similar in size and population such as Maharashtra and West Bengal, excise revenue was much lower at `5800 crores and `1769 crores respectively (see table 4 a b). 3. Prevent Funding of criminal enterprises: The people that beneit most from counterfeiting are criminals who then use their proceeds to fund other criminal activity of to further their own enterprises. 4. Further the usage of HEAL enhance the State image/ goodwill, as it create consumer conidence. Conclusion HEALs have become the main tool now used by the government and the enforcement to authenticate sealed IMFL and Beer bottles sold in the State. Hence the eficacy of this excise adhesive labels, as an advanced and true tamper evident seal, has great value. This is true regarding other Indian States also. Counterfeiting can be curb to a great extent with proper combination of high security HEAL and digital system with proper enforcement methodology. Deinitions 1. ‘Alcohol’ means ethyl alcohol of any strength and purity having the chemical composition of (C₂H₅OH₂). 2. Help in combating smuggling as it ensure ful proof labelling. 3. ‘foreign liquor’ means-a) all liquor (other than country liquor, rectiied spirit, denatured spirit and perfumed spirit), imported into India, on which customs duty is leviable under the Indian Tariff Act, 1934 (XXXII of 1934) or the Customs Act, 1962 (52 of 1962); b) all liquor manufactured in India (other than rectiied spirit, denatured spirit, and perfumed spirit), on which duty at a rate higher than levied on Country liquor is leviable; c) all beer (including ale, porter and stout) manufactured in India or abroad, and d) all sacramental wine prepared from pure dire grapes by a process or fermentation only without the addition of alcohol or any other ingredient. 4. ‘Liquor’ means intoxicating liquor and includes lahan and all liquid consisting of or containing alcohol; also any substance which the State government may by notiication declare to be liquor for the purposes of this Act. 18. State excise department 19. Census 2011 12
  13. 13. The Holography Times Expert Insight Protection against counterfeiting: a new step for a better usage of technologies By Jean-Michel Loubry Author is a specialist of traceability solutions and Chairman of ISO / Project Committee 246 “Anti-Counterfeiting Tools” and a technical traceability expert on authentication standards. He is an electronics engineer and graduate in strategic management, and has made his career in major hi-tech companies of the telecommunication sector, starting in research and development, then pre-sales manager for export markets, and product marketing manager. He managed the French national traceability center from 2006 to 2011. He can be contacted at +33 (0)6 42 47 58 56 or by email at Increasing dramatically each year, counterfeiting is not inevitable. ISO/PC246 brings its contribution to combat counterfeiting of material goods by facilitating the selection of authentication technologies. Counterfeiting: a real risk for organizations Counterfeiting is a worldwide issue, impacting all markets, not only luxury. Estimations say that counterfeiting may reach up to 10 per cent of the worldwide commercial exchanges. However no reliable igures exist to quote the size of the counterfeit business, but depending on markets and countries estimations vary form a few percent to more than 80 per cent. Many of counterfeit products can be dangerous for populations and counterfeiting impacts the proitability of the organizations through IPR infringement. The risks are important for companies facing counterfeiting: loss of turnover, hacking of knowhow, loss of jobs and risk to be sued if the fake products cause accidents and if there is no way to prove it is a counterfeit. Costs, if these risks occurred may be important, impacting the durability of a company. Counterfeiters are more and more “professionals” and the quality of the copies (i.e. the level of likeness) is increasing, making the detection of fakes dificult even for trained people. Protecting the products and even all kind of material goods is a necessity, especially when the economical context demands to take care of all % of proitability. Fake material goods may impact the health and the security of consumers, patients or citizens and therefore are a risk for companies, are the material goods protected by IPR or not. To be able to differentiate fake from authentic is the purpose of anticounterfeiting solutions. Anticounterfeiting solutions: ISO 12931 helps to select Choosing a solution using secured technologies may be complicate for companies as many anti-counterfeiting solutions exist, but 13
  14. 14. The Holography Times few information are available on references and on effectiveness. Facilitating the choice, the implementation and the usage of anticounterfeiting solutions with a standard was required either by brand owners, suppliers and authorities. All these parties have been involved in the workgroup which issued the NWIP presented by France in 2008. The resulting ISO Project Committee (ISO/PC246) started its job in the early months of 2009. ISO/PC246 is composed of 17 P-Members and 13 O-Members coming from all over the world. This worldwide collaboration and the willingness to succeed in this project is a good sign toward material goods users or providers. ISO/PC246 has created a standard that deines the « Performance criteria for authentication used to combat counterfeiting of material goods » (ISO 12931), that is applicable for any solution whatever the technology. It is planned to be published as an International Standard (IS) beginning of 2012. ISO 12931 speciies performance criteria and evaluation methodology for authentication solutions used to establish material good authenticity throughout the entire material good lifecycle. It does not specify how technical solutions achieve these performance criteria. ISO 12931 is intended to contribute to an organization’s understanding of its authentication needs, possible strategies, and challenges. It is intended to give the organization a set of criteria to analyses, specify and implement its authentication solutions. The organization will determine the level of security assurance required for the selected authentication solution. The Expert Insight authentication solution provider is expected to comply with the risk and security requirements of the organization. ISO 12931 is intended for all types and sizes of organizations that require the ability to validate the authenticity of material goods. It is intended to guide such organizations in the determination of the categories of authentication elements they need to combat those risks, and the criteria for selection of authentication elements which provide those categories, having undertaken a counterfeiting risk analysis. Such authentication elements may be part of the material good itself and/or its packaging. The criteria will apply to the material good and/ or its packaging. Authentication elements may be added or intrinsic to material good and/or its packaging. This International Standard is not intended to constrain the organization’s choice of authentication technologies. The veriication processes of authentication elements deployed in these solutions require the ability to read, capture and sometimes perform sampling using human senses or tools. These tools will either offer a local on the-spot response or will call, in real-time, into a secure information system, or possibly rechannel the data, sample, or material good towards a structure offering expert analysis for an off-line diagnosis. Thus, in relation with the speciication of the material good protection, an authentication solution is the result of a creation process followed by a veriication process. The creation process consists of deining, generating and manufacturing the authentication elements and integrating them with the ISO 12931 is intended to contribute to an organization’s understanding of its authentication needs, possible strategies, and challenges. It is intended to give the organization a set of criteria to analyses, specify and implement its authentication solutions. 14
  15. 15. The Holography Times Expert Insight material good or its packaging. The veriication process consists of checking the authentication elements along the distribution chain by trained people using human senses, tools or references. There are 3 main categories of solutions using overt, covert or forensic authentication elements which require respectively human senses, tools or forensic analysis to be checked. Overt authentication can be directly performed by an informed inspector and does not require any additional equipment to allow a feature to be veriied as genuine. Covert authentication elements are not instantly recognizable or interpretable by the human senses. They require authentication tools and/or specialized knowledge to verify their presence and validity. Forensic analysis involves the use of knowledge and dedicated scientiic methods to validate the authentication elements or intrinsic attributes of a material good. According to the organization’s protection strategy, knowledge about the presence and the method to verify the authentication elements will be made public or restricted. General audience will make any consumer aware of authentication elements available for him to act as an inspector. This make also the counterfeiter know what to focus on to deceive the consumer who, by deinition, is not an expert. Restricted audience is dedicated to professional inspectors like custom agents or any expert appointed by a right owner. ISO 12931 gives a list of performance criteria to be considered when choosing an authentication solution, assuming (again) that a risk analysis has been performed irst. Based upon these criteria the authentication solution speciier may determine what class or combination of categories of solutions meets the needs and Authentication solutions are a key means for detecting counterfeits and therefore support investigation and enforcement against counterfeiting and provide increased corroborative evidence. requirements of the user. These criteria are addressing the different steps of the material good lifecycle. The main categories of criteria are: - The physical characteristics of the authentication elements that will determine the capability of those elements to be added or used with the material good and/ or its packaging, to resist to manufacturing and logistics processes so they remain readable when required - The attack resistance of the authentication solution, either on the authentication elements side than on the tools side, will determine the complexity for a counterfeiter to copy and/ or access to secrets to be able to imitate or reproduce the authentication element or circumvent the authentication tool - The implement ability of the authentication solution considering all practical criteria that will make the authentication process work in the ield such as environmental conditions or telecommunication networks requirements… The performance of an authentication solution depends upon a proper risk analysis and criteria analysis that establish a set of compliance speciications. ISO 12931 also describe effectiveness assessment as a means to evaluate that a solution is complying with the established standard and if the solution is providing a measurable result. In addition to the overall solution effectiveness assessment should be established based on the speciication for each of the criteria categories. Authentication solutions are a key means for detecting counterfeits and therefore support investigation and enforcement against counterfeiting and provide increased corroborative evidence. Monitoring the behavior of an authentication solution in the ield is the best way to react and better to prevent the penetration of fakes. Conclusion Fighting against fake is a strategy involving legal and technical approaches. In both cases, the capability to ight is a key issue. Therefore the strategy has to be adapted to the organization’shuman and inancial means. Are sophisticated solutions better than simple ones? Not sure. Pragmatism is a good way to consider the combat against counterfeiting. ISO 12931 brings a full list of “need to be considered” criteria to be sure to go through all necessary characteristics or features that an organization’s authentication solution may require. ISO 12931 is also a frame to be extended for market sectors facing speciic issues or regulations. ISO/IS 12931 is planned to be published soon and is perhaps already published when you will read these lines. 15
  16. 16. The Holography Times Industry Updates Counterfeit Seizure Report The HOMAI counterfeit report displays all of the counterfeiting seizures reported in Indian newspaper for period January 2012 – February 2012. D/M/Y News Reported Sector Reported in Media 03/01/12 6 Nigerians arrested in fake lottery scam, Mumbai (Maharashtra) Fake Document Free Press Journal 04/01/12 Fake certiicate racket busted in Navi Mumbai (Maharashtra) Certiicate Free Press Journal 06/01/12 Fake notes seized in Old Delhi, two held (Delhi) Bank Notes Times of India 06/01/12 Factory seized making spurious Ghee, Jabalpur (Madhya Pradesh) FMCG Nai Duniya 09/01/12 Man arrested for smuggling foreign liquor (Delhi) Liquor Tribune 10/01/12 70 yr old grandson held for bootlegging (Delhi) Liquor Hindustan Times 09/01/12 Liquor seized (Rajasthan) Liquor Rajasthan Patrika 12/01/12 Fake ration card in Sonia name found (Maharashtra) Identity Document Times of India 12/01/12 Cops probe sale of fake tickets worth Rs 1 crore at Auto Expo (Delhi) Entry Tickets Times of India 14/01/12 Airport employee held for smuggling (Delhi) Memory Card Hindustan Times 14/01/12 Fake 3 crore ration card seized (India) Identity Document Dainik Jagran 17/01/12 Fake certiicates probe widens (Delhi) Identity Document Times of India 17/01/12 Fake drugs seized worth Rs 30 lakh (Uttar Pradesh) Pharmaceutical Dainik Jagran 18/01/12 Fake Footwear seized (Delhi) Footwear Hindu 18/01/12 120 fake driving licenses, SIM card seized (Jammu and Kashmir) Driving Licences Daily Excelsior 18/01/12 Liquor tragedy, 6 percent died (Assam) Liquor Assam Tribune 20/01/12 Fake Indian currency seized, one arrested (Puducherry) Bank Note Hindu 24/01/12 2 held for selling illegal weapons, 200 forged DLs seized (Haryana) Driving Licences Pioneer 24/01/12 Fake homeopathic drug found (Delhi) Pharmaceutical Navbharat Times 04/02/12 Ramjas detects 12th Class fake mark sheet (Delhi) Mark-Sheet Asian Age 08/02/12 Oficials found involved in faking property paper (Delhi) Fake Document Pioneer 08/02/12 Five teachers caught with fake degrees (Maharashtra) Degree DNA 16/02/12 Fake ilters racket busted; 7 nabbed (Jammu and Kashmir) Diesel Kashmir Times 17/02/12 Illicit liquor worth Rs 1.5 crore seized (Maharashtra) Illicit Liquor DNA 18/02/12 They faked US dollars, forged passports (Delhi) Currency Times of India 19/02/12 Fake illicit liquor factory seized (Rajasthan) Illicit liquor Rajasthan Patrika For detailed, subscribe to HoMAI press monitor or e-mail at 16
  17. 17. Industry Updates The Holography Times Global Patents Publication Title Int. Application Applicant DD.MM.YYYY Class Number 02.02.2012 WO/2012/016105–Complex Holograms, G03H1/00 PCT/US2011/045824 SABIC INNOVATIVE method of making and using PLASTICS IP B.V / complex hologram TAKEMORI, Michael Brief Abstract: A method of making a hologram (10) includes recording a hologram in a holographic recording medium (14) at a irst deformation ration, changing the irst deformation ratio to a second deformation ration that is different from the irst deformation ration; and recording a second hologram in the holographic recording medium (14) at the second deformation ration to form a recorded holographic medium. 26.01.2012 WO/2012/010665 –Combination of a B41M3/14 PCT/EP2011/062552 SONY DADC AUSTRIA luminescence substance with AG / EBERT, Dieter a hologram Brief Abstract:The invention relates to a combination or composition for marking products, comprising a luminescence substance on the basis of oxides, oxide sulphides and/or oxide luorides of lanthanide ions and a holographic substrate for receiving or reconstructing a volume hologram. The luminescence substance has a characteristic emission spectrum and, in combination with the volume hologram, can be used to authenticate and/or identify products such as substances or substance mixtures. 19.01.2012 WO/2012/007120- Security Element B42D15/00 PCT/EP/2011/003345 GIESECKE DEVRIENT comprising hologram structures GMBH / KELLER, Mario Brief Abstract: The invention relates to a security element for security papers, valuable documents and other data carriers, comprising a surface hologram structure and a volume hologram structure. In this case, the invention provides for the volume hologram structure to be swollen up in partial regions and thereby to form additional information in the form of a two- or multi-coloured motif and in the form of a microstructure. 12.01.2012 WO/2012/003592–Security Document B42D 15/10 PCT/CH2010/000175 ORELL FÜSSLI SICHER with holographic foil and printed HEITSDRUCK AG / machine-readable markings EICHENBERGER, Martin Brief Abstract:A security document has a substrate (1) with a foil element (6) applied to it. The foil element (6) comprises a security feature, such as a diffractive structure (12), for example a hologram. To easily detect a removal of the foil element (6) using conventional detection devices, markings (4, 14, 15) intersecting with the foil element (6) are printed onto the top surface (7) of the foil element (6), the bottom surface (8) of the foil element (6), or onto the substrate (1), thus that they are removed together with the foil element (6). 12.01.2012 WO/2012/004016–Beam Divergence G03H 1/22 PCT/EP2011/055593 SEEREAL TECHNOLO and various collimators for GIES S.A. / holographic or stereoscopic displays FÜTTERER, Gerald Brief Abstract: The invention relates to a holographic display comprising a lighting device, a magnifying unit (VE) and a light modulator (SLM), wherein the lighting device comprises at least one light source and a collimation unit (LCU), wherein the collimation unit (LCU) is designed such that it collimates the light of the at least one light source and generates a light wave ield of the light of the light source with a pre-determinable plane wave spectrum, wherein the magnifying unit (VE) is arranged downstream of the collimation unit (LCU) in the light propagation direction, wherein the magnifying unit (VE) comprises a trans missive volume hologram (VH) that is arranged and designed such that, on the basis of a trans missive interaction of the light wave ield with the volume hologram (VH), an anamorphic divergence of the light wave ield can be achieved, and wherein the light modulator (SLM) is arranged in the light propagation direction either upstream or downstream of the anamorphic magnifying unit (VE). For more visit at 17
  18. 18. The Holography Times Upcoming Events The 9th Pan European High Security Printing Conference Mar 27-29, 2012, St Petersburg, Russia, Web: Cartes in Asia Mar 28-29, 2012, Hong Kong, Web: IP Protect Expo 2012: Brand Protection in Action Mar 28-29, 2012, London, United Kingdom, Web: 1st international forensic technology fair Mar 28-30, 2012, Warsaw, Poland, Web: Pharmaceutical Anti-Counterfeiting April 24-25, 2012, London, United Kingdom, Web: 3rd Annual Anti-Counterfeiting for Pharmaceutical and Medical Devices Summit April 30-May 1, 2012, Philadelphia, PA Web: DRUPA May 3-16, 2012, Dusseldorf, Germany, Web: Security Document World 2012 May 21-23, 2012, London, United Kingdom, Web: Rosupak 2012 June 18-22, 2012, Moscow, Russia, Web: Latin American High Security Printing Conference July 2-4, 2012, Rio De Janeiro, Brazil, Web: Pack Plus South 2012 July 6-9, 2012, Hyderabad, India, Web: 2nd International Banknote Designers Conference Sep 2-6, 2012, Stockholm, Sweden, Web: PABS – Product Authentication and Brand Security Conferences 2012 Sep 11-12, 2012, Chicago, IL, UA, Web: 7th Security Document Summit Sep 12-14, 2012, Beijing, China, Web: 11th Asian, Middle East African High Security Printing Conference Sep 24-26, 2012, Dubai, UAE, Web: Eco Print 2012 Sep 26-27, 2012, Berlin, Germany, Web: Security Printer’s Conference Exhibition, Oct 17-19, 2012, Bordeaux, France, Web: Holopack Holoprint 2012 Oct 28-30, 2012, Vienna, Austria, Web: Industry Updates Latest Tenders Security Printing Hologram tender that have been notiied in past month include; · India - Hologram excise adhesive label, Uttrakhand, deadline- 20/03/2012 · United States - Printing of Cigarette Tax Stamps, deadline- 19/03/2012. · Macedonia - Applied holographic stripe for printing excise stamps for labeling tobacco products and alcoholic beverages, deadline – 03/04/2012 · Belgium - Development and purchase of the matrix in the form of holograms sticker to include in the access cards to buildings of the EU Council, deadline – 16/03/2012 For more information or enquiry, email us at About HoMAI The Hologram Manufacturers Association of India (HoMAI) is the world’s 2nd and Asia only association representing hologram industry. Published by: Hologram Manufacturer Association of India (HoMAI) Issue Editor: C S Jeena The Holography Times is a quarterly newsletter published by HOMAI with an aim to provide latest developments, research, articles, patents and industry news to a wide audience related to Holography in Indian and World. The editorial team welcomes your news, contributions and comments. Please send your product updates, press releases, conference announcements or other contributions to HoMAI: 21-Ground Floor, Devika Tower 6 Nehru Place, New Delhi 110019, India Telfax: +91 (11) 41617369 Email:, Website: Designed and Printed by EYEDEA Advertising E-439/9, SDV, Charmwood Village, Faridabad, Haryana (INDIA) E-mail: on behalf of HoMAI Disclaimer: The data used here are from various published and electronically available primary and secondary sources. Despite due diligence the source data may contain occasional errors. In such instances, HoMAI would not be responsible for such errors. 18
  19. 19. The Holography Times 19
  20. 20. The Holography Times Holographic Solutions for Excise Revenue Protection KANTA S Track-Pack India Ltd. 20