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The Authentication Times Issue 31

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Dear Reader,
Welcome to the 31th edition of The Authentication Times.
Empowerment of Industry, Government and Consumers is the key against counterfeiting. With this theme, in a strong move against counterfeiting and enabling the “Make-Sure-India” movement in the country, India's first two-day authentication conference cum exhibition – The Authentication Forum 2017, opened on February 8, 2017 at The Taj Mahal Hotel, Man Singh Road, New Delhi.
This forum was organised by Authentication Solutions Providers Association (ASPA) and Messe Frankfurt India (MFI) jointly. The event was well attended by more than 230 delegates and eminent experts,along with many other industry veterans who came together to participate and encourage us in our fight against counterfeiting. It also received an
overwhelming support from prominent industry associations such as Automotive Component Manufacturers Association, FICCI CASCADE, Indian Beverage Association, Organisation of Pharmaceutical Producers of India (OPPI), Indian Cellular Association, and International Hologram Manufacturers Association in our fight against counterfeiting. (For a
detailed story, do read our special report on (Authentication Forum 2017.)
In addition to this, the current issue also covers stories on How FMCG brands are gearing up against counterfeiting and the need of authentication solutions for SME sectors, interview of our new members along with regular columns such as reports from FICCI CASCADE, news bytes and upcoming events.
We thank you for your continual support and look forward to receive your feedback.

Sincerely,
Chander S Jeena
Editor, The Authentication Times

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The Authentication Times Issue 31

  1. 1. India Witnesses First-Ever International Authentication Forum Empowering Industry, Government & Consumers to Fight Fakes The Official newsletter of Authentication Solution Provider' Association (ASPA) March 2017 | Volume 12 | Issue 31 Diverse technologies, common goal.
  2. 2. BONDING TOGETHER 104, Navyug Market, Nisha House Ghaziabad - 201001, (U.P.) INDIA P: (0120) - 279 8904, 7601, 3578, 651 3801 Works - D-2 Meerut Road Industrial Area Ghaziabad (U. P.) Ph: 0120-2703642/4155972 E: sales@shreelamipack.com W: http://www.shreelamipack.com SHREE LAMIPACK PVT. LTD. SHREELAMIPACKPVT.LTD.isoneoftheleadingmanufacturersofcompleterangeofMultiColorProductLabel/Sticker, Security Label, Hologram strip Labels, Barcode Labels, RFID Tags/ Labels, Track & Trace with Complete Support-Chain, Scratch Labels,Vinyl Graphics/ Decals, Dome Logo, Polycarbonate Label,ThermalTransfer Ribbons & Self AdhesiveTapes &DieCutsEtc…  ProducxtsLabels/Multi-ColoursLabels  IdentificationLabels  ElectricDiagramsLabels  Logos  Bar-codeLabels  PolycarbonateLabels  InformationLabels  VinlyGraphics/DecalsLabels  PVCLabels  ThermalTransderRibbon  PanelLabelsforHomeAppliances  SecurityLabels  SecurityHolograms  Track&TraceLabels  ScratchLabels  RFIDLabels SELF ADHESIVE LABELS / STICKERS OUR PRODUCT RANGE SECURITY LABELS & THERMAL RIBBONS  CardPrinter  Bar Code Printers  Bar code Scanner / Data Terminals  Complete barcoding solutions with customized software  Trace & Trace with complete supply chain management system  Access Control System  RFID System  Electronic Article Surveillance Systems BARCODE
  3. 3. ISSUE 31Index Viewpoint DearReader, Welcometothe31theditionofTheAuthenticationTimes. Empowerment of Industry, Government and Consumers is the key against counterfeiting. With this theme, in a strong move against counterfeiting and enabling the “Make-Sure-India” movement in the country, India's first two-day authentication conference cum exhibition – The Authentication Forum 2017, opened on February 8, 2017 at The Taj MahalHotel,ManSinghRoad,New Delhi. This forum was organised by Authentication Solutions Providers Association (ASPA) and Messe Frankfurt India (MFI) jointly. The event was well attended by more than 230 delegates and eminent experts,along with many other industry veterans who came together to participate and encourage us in our fight against counterfeiting. It also received an overwhelming support from prominent industry associations such as Automotive Component Manufacturers Association, FICCI CASCADE, Indian BeverageAssociation, Organisation of Pharmaceutical Producers of India (OPPI), Indian Cellular Association, and International Hologram Manufacturers Association in our fight against counterfeiting. (For a detailedstory, doreadourspecialreporton (AuthenticationForum 2017.) In addition to this, the current issue also covers stories on How FMCG brands are gearing up against counterfeiting and the need of authentication solutions for SME sectors, interview of our new members alongwith regular columns such as reports from FICCI CASCADE, news bytes and upcomingevents. We thank you for your continual support and look forward to receive your feedback. Sincerely, Chander S Jeena Editor, The Authentication Times In this issue 3 PUBLISHED BY Authentication Solution Providers’Assciation (ASPA) EDITORIAL TEAM Issue Editor: C S Jeena Principal Correspondent: Sanjiv Singh IMAGE CONSULTANT P R Mantra PRINTED BY Gopsons Papers Ltd. A - 2&3, Sector 64, Phase 3, Noida, India The Authentication Times is a quarterly newsletter published by ASPA with an aim to provide latest developments, research, articles, patents and industry news to a wide audience related to Authenticatoni in India and World. The editorial team welcomes your news, contributions and comments. Please send your product updates, press releases, conference announcements or other contributions to ASPA: 21-Ground Floor, Devika Tower 6 Nehru Place, New Delhi 110019, India Telfax: +91 (11) 41617369 | Email: info@aspaglobal.com | Website: www.aspaglobal.com 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, ASPA would not be responsible for such errors. Upcoming Event's 19-21 June 2017 High Security Printing – Latin America https://www.reconnaissance.net/hsp- latinamerica/ 26-28 June 2017 Security Document World QEII Centre, London, UK http://www.sdwexpo.com/ 4-6 July, 2017 Watermark Conference Yekaterinburg, Russia https://watermark-conference.com/en/ FMGC Companies Gear Up Against Counterfeit Products ASPA Byte Cover Story India Witnesses First- Ever International Authentication Forum Interview Kezzler FICCI Cascade The Need for authentication solutions for MSMEs’ 6 11 12 15 1
  4. 4. d d r e s s i n g t h e i m p a c t o f Acounterfeiting in India, FMCG companies are gearing up to fight against counterfeiting. Lately, big FMCG brands have announced adoption of authentication solutions to empower consumersagainstfightingfakes. Recently, Cargill Foods India has introduced new-age anti-counterfeiting technology in its one of popular regional brand - Gemini Cooking Oil. This anti- counterfeiting technology has a unique feature with a two-way process to check the authenticity of the Tin SKU. This process includes a 3D Hologram of Cargill Foods India, which signifies the authenticity of the product. On looking at this hologram using a phone's torch light, one can spot '1865' written on it – the year of foundation of Cargill Foods India's operations. Besides, the customer can download an app called 'Mojo Tags' to scan the batch code of the product and receive reassurance about the genuinenessoftheproduct. According to a study by KPMG-FICCI, about 80 per cent of the consumers are victims of deceptive counterfeiting, i.e. they buy fake goods in the belief of buying genuine ones. While consumers end up paying excessively for low-quality products that could possibly have health and safety risks, producers risk damage to brand image. FICCI CASCADE report, Illicit Markets - A threat to our national interests, based on grey market estimation, pointed out the losses to the government annually to the tune of INR 4,646 crore in personal care and INR 5,660 crore in the packagedgoods. According to Neelima Burra, Chief Marketing Officer, Cargill Foods India, “Counterfeiting in India is rising at an alarming rate, especially in the FMCG sector. A report by FICCI-KPMG suggests that out of the total counterfeit market, 65 per cent is from this sector. Edible oil industry is one of the most unorganised sector in terms of distribution in India; hence, it holds a larger risk of duplicity. Therefore, ensuring that the right product reaches the consumer becomes utmost important. Purchasing a fake product brings loss to the business as well as may be a potential health hazard for the consumer. Counterfeiting is something Cargill Foods India takes very seriously as a fake product implies losing consumers' trust. Educating the consumers and our wholesalers is a must to beat this menace. With Gemini Cooking Oil, we start our first step towards addressing this major issue of counterfeit goods. To begin with, the initiative against counterfeiting has been launched on this brand. In the commodity business, where brands play a vital role of defining the product differentiation, a counterfeit tarnishesthefaithof acustomer.” Another Company, GEF India used a solution, in the form of a 3D holographic stamp, for its Freedom brand of refined sunflower oil. A 3D holographic stamp, sandwiched between two transparent isotropic polyester layers, makes the pack counterfeit-proof and assures the end-users of a product that upholds utmost standards of quality. The sandwiched holographic stamp is not susceptible to any rupture by scratching or rough handling in the supply chain. The end-result is a product that would be almost impossible for a counterfeitertore-create. In a similar move, few months back, Nestle introduced a security seal designed to FMCG Companies Gear Up Against Counterfeit Products ISSUE 31 ASPA News Table: Estimated Tax & Sales Loss to the Government & Industry Direct Loss (INR Crore) Indirect Loss (INR Crore) Total Loss to the exchequer (INR Crore) Loss of Sales FMCG (Personal Goods) 867 3776 4646 21957 FMCG (Packaged Goods) 552 5108 5660 19243 Total 1419 8884 10306 41200 Source: FICCI CASCADE (Loss calculated for the year 2013) 1
  5. 5. ISSUE 31ASPS News 2 protect its Nescafe Coffee brand from counterfeiting in India. The Seal of Authenticity as a tamper-proof brand protection/anti-counterfeiting solution that does not affect the retail price of the product - in this case, Nescafe Classic brand. The seal (in picture below) includes a 3D reflective lens image applied using transfer technology as well as other security features. In India, consumer goods sectors that are relatively more prone to counterfeit trading are alcohol, consumer packaged goods, personal care products, tobacco, mobiles and mobile components, automobile components and computer hardware and software. With increased incidents of counterfeiting activity in the FMCG industry, secured anti-counterfeiting packaging (ACP) has become the first line of defence against un- authorised attempts to steal, replace or modify products of all types. Prominent FMCG brands like Patanjali, AMUL, Mother Dairy, Milkfed, ANIK Ghee etc., are also using various authentication solutions to safeguard their brand and products. Usage of authentication technologies like UV protected film, colour-changing film and holographic film for secondary product packaging not only helps companies protect the products from being duplicated but also helps in marketing and sales promotion. These solutions in combination with IoTsolutions canbemediumfor consumerengagement.
  6. 6. The Bureau of Internal Revenue (BIR) vowed to capitalise on new technologies and improve the security features on its excise-stamp tax to stop the widespread use of fake stamps that rob the government of up to P15 billion eachyear. Fake excise stamps are particularly rampant in cigarette manufacturing, in part because the machines that print them, while government- owned, are commercially available everywhere and therefore quite easy for anyone to simulate and make moneyfor themselves. BIR Deputy Commissioner Jesus Clint O. Aranas said the government needs to step up the security features on its excise-tax stamps and upgrade their printing machines so that counterfeiters are unabletocopythem. “Well, the presumption is the fake tax stamps do not come from APO Production Unit Inc. They are printed outside. That is why we are trying to improve the security features because the printers APO is using are not secure. They are available on the commercial market and many others have this kind of commercial printing machines,”Aranas toldfinancialreporters. When or how the agency only belatedly realised that their printing machines are unsafe have not been adequately explained, but Aranas acknowledged the adoption of technological advancements will help secure the excise-tax stamps going forward. This means changing the ink, as well as the tap guns used for the printing of the excise- taxstamps,amongothercountermeasures. “We have to improve the kind of printing that we are producing, the ink that we are using, and the tag guns that we are using. There is so much [new] technology already inthemarket,”hesaid. The BIR also said it is looking into the apparent breach in the printing process that Aranas said originated from the lack of enforcement measures at the bureau and to the lackinmanpower, aswell. “We need to revisit it. Obviously, we have a problem with the fake stamps [and] that means our security has been breached somehow, and that enforcement is lacking. Of course, we lack the manpower also,” Aranas said. Improving the security features on the tax stamps is a priority at the BIR so as not to allow counterfeiters to defeat the changes thatwillbemade. BIR Philippines to Upgrade Tax Stamp Security Features he Drug Commission of German TP h a r m a c i s t s ( A M K - Arzneimittelkommission) regularly informs about batch recalls which are - for example - due to quality defects. Now, there have been more and more reports about batch recalls due to counterfeit medicines. According to a report of the German newspaper "Deutsche Apotheker Zeitung" edition 5/2017, the company axicorp Pharma is facing such a counterfeits case. Actually, the company has alreadyhadsimilarcasesinthepast. According to the AMK, axicorp asked for the following announcement: We have information that with regard to the batch mentioned, falsified packages have been identified. For this reason, the batches of Votrient 400 mg (Pazopanib), 60 film- coated tablets are being recalled. Pharmacists are required to check their stocks and to inform their patients immediately if the packages affected have been delivered. The batch numbers are: JN5W,MY2A, andP64U. This case of counterfeit medicines reaching patients through the legal supply chain to the pharmacy shows how essential the mandatory requirements on serialisation (2D Matrix Code) are: they will start applying as of February 2019. Some companies have already established the systems. Yet, others are still unprepared or not sufficiently prepared. Beside the necessary investments in technical infrastructure, enormous organisational tasks have to be solved. Experts say that a 12-month test phase will be necessary after the complete technical implementation to ensure a smooth "Track & Trace" process. In particular the connection to the so-called hubs for the transmission of the serialisation data raises a wide range of challenges. Therefore, companies should have completed all the required implementation measures by the end of this year at the latest to be able to supply the marketas of February2019. As per the 2015 Customs Press Conference, almost four million pills were seized by German customs in 2015, four times as manyas inthepreviousyear. Falsified Cancer Drugs Found in Germany ISSUE 31 ASPA Byte 3
  7. 7. ome 353,000 counterfeit Seuro banknotes were withdrawn from circulation in the second half of 2016, a slight increase compared with the first half of 2016 and 20.7per cent fewer than in the second half of 2015, the European Central Bank (ECB) announced today. The number of counterfeits remains very low in comparison with the increasing number of genuine banknotes in circulation (over 19 billion during thesecondhalfof 2016). Ever since the first euro series was issued, the Eurosystem – i.e. the ECB and the 19 national central banks of the euro area – has urged people to stay vigilant when receiving banknotes. Genuine banknotes can be recognised using the simple “feel, look and tilt” method described on the euro pages of the ECB's website and the websites of the Eurosystem national centralbanks. Euro Counterfeiting Remains Low in Second Half of 2016 Only registered pharmacists will soon be able to deal with the supply and storage of medicine for distribution to retail pharmacy outlets. The union health ministry has issued a draft notification to amend the Drugs & Cosmetic Rules 1945 to stop unqualified 'pharmacists' from dealing in wholesale and distribution of drugs. Officials in the drug control department said the move had been a long time coming and was taken as the government had received several complaints of spurious, adulterated and misbranded medicines being supplied by distributorstothechemistshops. Taking cognizance of the complaints, the union health ministry will change the rules to allow only a registered pharmacist to be in charge of supply. Currently, a matriculate or intermediate or graduate person with one to four years of experience in dealing with drugs is eligible to store and supply medicine. Health Ministry Drafts New Pharmacy Rules to Control Sale of Counterfeit Medicines Diesel launched scan for authenticity iesel is set to roll out a new Dmobile authentication tool which aims to authenticate its jeans in its fight against counterfeiting by the end of theyear. By the end of this year, all Diesel denim wear will display the Certilogo code on a heat-printed label in the waistband along with the writing 'Scan for Authenticity' to let consumers verify the authenticity of a pairof Dieseldenim,beforepurchasingit. “In a new consumer landscape driven by appreciation for high quality, we embrace the trust of our consumers, creating a direct dialogue with them. With Certilogo, we will empower Diesel fans to authenticate the unique identity of our denim, making sure they shop our original products in a safe and secure way,” said Alessandro Bogliolo,chiefexecutiveofficerof Diesel. “This is a smart move on Diesel's part. The relationship between brands and consumers has changed in the digital age. It is not acceptable to say, 'Buyer beware and good luck' about fakes when every one of us has the technology in our pocket to stop it,” saidMicheleCasucci,CEOof Certilogo. 4 ISSUE 31ASPA Byte
  8. 8. The International Hologram Manufacturers Association (IHMA), which represents the global hologram industry, has appointed its firstchairmanfromAsia. The appointment of Manoj Kochar, f o u n d e r a n d director of India- based Holoflex, comes in the face o f c o n t i n u i n g d e m a n d f o r authentication and brand protection holograms, which provide effective security devices to counter global threats. The Asia region is seeing a significant amount of hologram industry activity and growth, with China still the major source of counterfeitandpiratedconsumergoods. The IHMA, a not-for-profit organisation that promotes authentication and security holograms worldwide, has also confirmed its Board for 2017. Manoj Kochar will join current Board members XiaoDong Liu, founder and CEO of Henan Province Wellking Technologies Co. Ltd, in China; and Nuray Yilmaz of Turkey's MTM Bilisim Arge Yazilim ve Guvenlik TeknolojileriSanTicaret.A.S. Rohit Mistry of Holographic Security Marking Systems will remain as the IHMA's Asia regional representative while Diana Newcombe of Pacific Holographics and Umendra Gupta of Holostik will cover the North America and the ASPA regions respectively. The EU and European Free Trade Association (EFTA) will be represented by OpSec Security Group's Paul Dunn, and Corinne Murcia Giudcelli from SURYS. System Intelligence Products' Goran Milinovic remains as the Eastern Europe/Former Soviet Union and CIS representative.Source:www.ihma.org New Asia voice for International Holography Body Manoj Kochar has been appointed as the new chairman of the International Hologram Manufacturers Association The world's largest and heaviest nut, the coco de mer, is getting an upgraded anti-counterfeiting system. Found on just two islands of the Seychelles archipelago in the Indian Ocean, the coco de mer palm has seeds or nuts that reach half a metre in diameter and canweighas muchas 25kilograms. The outer shell is popular as a tourist souvenir while the edible inner kernel is desirable in Asian countries, where it is believed to have aphrodisiac properties. The seed's rarity and popularity make it a targetfor poachersandfraudsters. The coco de mer already featured an anti- counterfeiting tag system but the Seychelles Ministry of Environment, Energy and Climate Change found this original tag was easily falsified. "Our coco de mer need to have better protection," said Alain de Comarmond, principal secretary in the Ministry of Environment, Energy and Climate Change. "Due to thefts and falsification of the old tag, the ministry had toinvestinnew securitymeasures." An investment of around $10,000 has resulted in a new modern tag with holographic security features and permit system, which will make it more difficult to counterfeit, de Comarmond said. The holographic system includes visible security features when held up to the light and at a certain angle. An inviolability system is also included, which makes the coco de mer illegal should the tag be removed. "The new tag and permit system will improve the way the coco de mer is being produced, the way it is managed and traded. The system will assist us to further fight poaching and other violations that threaten the endemic species," de Comarmond said. The transition to the new tagwilltakeplacegraduallyovertheyear. The coco de mer is listed as a threatened species, is internationally protected and there are strict laws governing the possession, distribution and export of nuts. While the plant grows naturally in the UNESCO world heritage Vallee de Mai nature reserve on the Seychelle island Praslin, poaching and the illegal sale of the nuts is a big problem, and appears to be on the increase. Mature nuts can be sold for between $450 and $750 per kilogram. A two-year survey in 2014 found that poaching was harming the plant's population, which is already low due to naturally slow growth rates of 20-30 years before the first nuts are produced. Out of 6,500 trees on the island of Curieuse, there were only 272 nuts, the survey found. Research is currently being undertaken to understand the life cycle of the plant, including pollination, fertilisation and nut production. Source:https://www.securingindustry.com 5 ISSUE 31 ASPA Byte World Largest Nut gets new Holographic tag
  9. 9. The Indian manufacturing sector witnessed a first-of-its-kind event t o i m p a c t t h e p r e v a i l i n g counterfeiting menace. In a strong move against counterfeiting and enabling the “Make-Sure-India” movement in the country, India's first two-day conference authentication conference cum exhibition – The Authentication Forum 2017 opened on February 8, 2017 at The Taj Mahal Hotel, Man Singh Road, New Delhi. This forum was organised by Authentication Solutions Providers Association (ASPA) and Messe FrankfurtIndia(MFI) jointly. A high-profile panel of experts including government authorities and technology specialists have come together in New Delhi to mark the launch of this important platform which was inaugurated by Mr. B K Prasad (IAS), Member – Secretary, National Commission for Denotified, Nomadic & Semi-Nomadic Tribes, M i n i s t r y o f S o c i a l J u s t i c e a n d Empowerment along-with Mr. P. V. Rama Sastry, Joint Secretary – Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution, Govt. of India, and Mr ChandrashekharRanga, Dy Drugs Controller (India), Central Drugs StandardControlOrganisation. At the occasion, Mr. B K Prasad (IAS), Member – Secretary, National Commission for Denotified, Nomadic & Semi-Nomadic Tribes, Ministry of Social Justice and Empowerment said, “I am happy that the industry has come together to deliberate on this important issue.This is a major concern which affects industries, government and the public at large and I am happy to be here at the Authentication Forum which can bringforward implementablesolutions.” In its opening remarks, Mr. Nakul Pasricha, V i c e - P r e s i d e n t , A S P A s a i d , “,Counterfeiting is an important subject. The loss of value to industry and to consumers, the loss of tax revenue to government, and the loss of innocent life, make this a scourge we must come together to eliminate. He suggested a three-pronged approach:First, we must acknowledge the problem.There is nothing to be gained by sweeping it under the rug, or downplaying the extent of it. We would only be helping take the heat off counterfeiters and lulling India Witnesses First-Ever International Authentication Forum Empowering Industry, Government & Consumers to fight fakes A recent FICCI report indicates that illegal market in seven select manufacturing sectors led to a loss of INR 39,239 crore during 2014. ISSUE 31ASPA News 6
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  12. 12. ISSUE 31 ASPA News consumers into a false sense of security.Second, we must have a comprehensive approach to tackling the problem, involving strict regulations and punitive measures against counterfeiters, widespread adoption of solutions, and a healthy industry with cutting-edge capabilities to support brand owners in their fight.Third, we must educate and empower consumers to be aware of the extent of the problem, and how they can take steps to ensure their and their families' safety. Here again, government and industry can both playavitalrole. Counterfeiting is increasing 3 per cent per annum globally. In India, the problem is more severe, it is growing with an alarming rate of almost 44 per cent per year. As per industry body FICCI-CASCADE, from the counterfeiting activity the Government of India incurred a loss of INR 26,190 crores in fiscal year 2011-12, which has increased to INR 39,239 crores in 2013-14, a growth of49.8 percentintwoyears. The first day of the forum started with a panel discussion on reviewing the counterfeiting menace in Indiabefore u n d e r s t a n d i n g t h e p r o b l e m s o f counterfeiting across various sectors, including medicines, FMCG, auto parts, liquor,mobilephones andothers. Speaking at the occasion, Mr. P. V. Rama Sastry, Joint Secretary – Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution, Govt. of India said, “Even as industry revenues take a major hit by counterfeits, the biggest loss is to the consumer. All of us need to work together to address this growing concern and the panel discussion with various cross-sector stakeholders at this importantforum,willservethispurpose.” While discussing issues of counterfeiting in the automotive sector, Gajanana M Gokhale, brand protection manager, AutomotiveAftermarket, Bosch, said, “Old auto parts get reconditioned and are being sold as genuine new products. We have started getting some products back to our factory and destroying them, but we can't possibly get all products from across the country. Another problem is lookalike names that fool customers. Some products, such as HID kits, shock absorbers and clutch plates, being sold in the market with Bosch branding are not even manufactured by the company. We don't have registration for these products but they are available with our branding in Delhi and Mumbai.” To tackle this, Bosch is introducing new packaging for its products with 13 overt and covert features. The company aims to change the packaging of all its products by 2018. “Changing packaging of some products in the initial phase has helped the business grow inthegroup,”saidGokhale. At the occasion, A K Datta, packaging expert and former head, packaging at Jubilant Life Services, said, “Of the 800 billion USD global pharmaceutical industry, approximately 10 per cent is believed to be counterfeit.' Sumantra Mukherjee, director, Forensics Practice at KPMG, pointed out that the FMCG market in India was valued at 49 billion USD in India in 2016 and is expected to reach 104 billion USD by 2020. Addressing the concerns of FMCG counterfeiting, he said, “Counterfeit products are growing at a staggering rate of 44 per cent, as opposed to 30 per cent a couple of years back.” The increase, he said, was due to online business where it is easy for counterfeiters to sell fake products and dupe customers. It is, therefore, important to locate the real source of the product before making a purchase. Brands lose up to 20 per cent of market share and companies face roughly 10 per cent losses on revenue and profit due tocounterfeitproductsinIndia. The second half of the day covered the role of global standards (ISO 12931), and perspectives of legal and law enforcement agencies in anti-counterfeiting strategies. Pradeep Shroff, anti-counterfeiting expert and former ASPA president, suggested that brands look at counterfeiters as competitors, do a SWOT analysis and understand their strategy. “Make a business plan against counterfeiters and measure lost sales and business opportunity to act againstthem,”hesaid. Day two of forum provided insight todelegates about authentication solutions andtrends from global experts through a seriesof sessions on anti-counterfeiting strategiesbeyond solutions, giving a 360 degree integrated approach against counterfeiting.There were presentations from BlueSphere Health, Holoflex, Holostik, De LaRue, IHMA and Oak Analytics, the lattershowcasing a new authentication handheld Raman spectrometer. The role and importance of standards,and how strategic and tactical consultingfrom Price Waterhouse Coopers can helpreduce counterfeiting, was also presented,prior to a panel discussion on the selectionand integration of authentication solutionsbycustomers. The IHMA General Secretary Dr MarkDeakes presented 'An Insight into New Generation OVDs', which covered the latestinnovations in this sector and included thelatest developments in banknote, ID, brandprotection, tax stamps and packaging. Dr Deakes said 'this was an excellent forum with insightful discussions and papers and showcased the increasing importance that the Indian government now places on reducingcounterfeiting.' ‘With global counterfeiting estimated to rise in the future, there is an increasing need for technology and technology solution providers, including hologram suppliers, in helping to combat the menace of counterfeiting.''Holograms, when part of an integrated anti-counterfeiting strategy, remain a robust authentication solution which can help people live safe and healthy lives.’ At the occasion, Mr. U.K. Gupta, President, ASPA, said, “Our Governments seem committed to fight against black money and terrorism and we welcome the initiative of Government of India and the campaign “Made in India”. Today, “Made in India” products have great opportunity in India and the overseas market. However, with the increase of counterfeiting in various sectors, there is a constant need to ensure that these “Made in India” label products are of highest quality, genuine and secured 9
  13. 13. ISSUE 31ASPA News till it is delivered to the end consumer. We offer various authentication solutions which will ensure that “Made in India” label product are of highest quality and can be easily identified as genuine products by brand owners, Government authorities and consumer by large with the help of IT and digital solutions such as mobile app, SMS and web based applications. This summit will have positive step on our existing Honourable Prime Minister Narendra Modi's dream country campaign “Make in India” & ASPA's campaign “Make Sure India”. ASPA's General Secretary, Arun Agarwal said, “We have been actively working towards brand owners' awareness against counterfeiting, for long. Since last year, we had extended this program to next level by e n g a g i n g c o n s u m e r s a n d o t h e r stakeholders in this the fight against counterfeiting.We are thankful to industry association such as Automotive Component Manufacturers Association, FICCI CASCADE, Indian Beverage A s s o c i a t i o n , O r g a n i s a t i o n o f Pharmaceutical Producers of India (OPPI), Indian Cellular Association, International Hologram Manufacturers Association and other industry veterans in our fight against counterfeiting. We aim to explore the existing scenario and find practical solutions. Consumer awareness is key to thisinitiative.” The event was attended by more than 230 delegates and eminent experts including, Mr. Arvind Gupta, National President (Convener) – IT Cell, BhartiyaJanta Party (BJP), Mr. Anil Rajput, Senior Chair – Federation of Indian Chambers of Commerce & Industry – Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (FICCI CASCADE) & Vice President - Corporate Affairs, ITC Ltd, Mr. Rama Shankar Pandey, Co-Chairman, Consumer Affairs & Anti – Counterfeit Committee, Automotive Component Manufacturers' Association of India (ACMA) & Managing Director, Hella India, Mr. Vivek Padgaonkar, Director – Project & Policy, Organization of Pharmaceutical Producers of India (OPPI), Mr. Pradeep Shroff, Noted Anti-Counterfeiting Expert, Author, Former President, ASPA & Former Managing Director – PRS PermacelPvt. Ltd and many more shared their insights on this vital issues aimed at mitigating counterfeitingconcerns. 10
  14. 14. Interview Kezzler Q1: Please brief us a bit about Kezzlerand yourself Kezzler is based in Oslo, Norway, and the company's main product is a proven technology platform for brand protection, track-and-trace and mass consumer engagement. The company's vision is to change global business practices by providing a secure, unique and interactive code on EVERY single product item. This does not only allow real time brand protection, but also individualized real time consumer engagement propelled by the uniquecodeontheproductitemitself. Q2: What solutions does Kezzler offer for authenticationand packagingsector? Our primary product offering includes brand protection, track-and-trace and mass consumer engagement. Kezzler's cloud platform enables serialization on a mass scale giving every product a unique identity in the connected world. We can link brand owners with their products so they can find out information about these products, all the way from the point of manufacture right throughtothefinalconsumer. Q3: How are Kezzler solutions different or unique from other players in the market? A technology platform that empowers companies to meet customer demand for full valuechaintransparencyby:  Providing mass-scale individual unit packageserializationatverylowcost  Digitizing every package to create an “Internet of Packaging” that works across the entire value chain, turning products into information and interaction channels for all stakeholders in the digital consumer goods ecosystem  Connecting any consumer who has a smartphone with a company-tailored, interactive database that meets its customers'transparencydemands  Enabling commercial value chain participants to track and trace ingredients and finished products in real time with no more than a smartphone and an Internet connection Q4: What are the milestones of your company tilldate? Kezzler has reached many milestones, including securing a global partnership with the leading flexible packaging company in the world, AMCOR; with Roche India, we virtually eliminated counterfeits of their key oncology drugs, Avastin and Herceptin, rolling out brand protection program in support of Reckitt Benckiser's Durex condoms, expanding our organization in India,AsiaandtheUSA, tomentionafew. Q5: What kind of challenges your company faced in initial stages and what is thescenarionow? PASS Q6:You have been into the packaging and consumer goods industries from a long decade, how do you see adoption of authentication solutions in packaging and theirimportance? We believe there is tremendous momentum in the field of serialization, both at a local and global level. Through pending and new legislations (i.e. Pharma, tobacco and food) along with consumers' demand for full transparency, brands and companies are investing tremendous resources to find new and improved technology solutions that can dothefollowingatmassscale:  Full transparency about where products comesfromandhow itismade  Assurances of authenticity and immediate traceability of products up the value chain to the origin of finished products and ingredients  Real-time connectivity and two-way communicationwithcompanies Q 7: What are the key factors which make Kezzler enter the Indian market? How do you seethis market? The market for serialisation, Track & Trace and Consumer Engagement is steadily growing. It was important that we have our own operations to meet new market trends and closer coordinates with our clients and partners. The India market is at an inflection point with multiple players across various level of technical capability trying to meet the huge opportunities. The client as such needs to be cautious in selecting a provider capable of providing services which are extremely secured, extremely scalable and extremely responsive. Q 8: Kindly let us know about the company expansion plan across the globe and kind of investment company planning todo inIndia inupcoming years? Kezzler is currently experienced rapid growth and significant momentum through partners and current and new customers. We are expanding our sales and project management staff and opening a new office inBostonandAsia. We expect 2017 in India to be a big year for us. We are boosting our sales and technical capabilities by hiring the right mix of manpower. We are investing more on building relations with the right bodies like 'Authentication Solution Providers of India' and 'Norwegian Business Association of India' Q9: What are Kezzler solutions and how they work? What are the steps to implementation? How easily can these solutions be integrated with packaging lines? (alreadyansweredthefirstpart) The beauty of Kezzler's technology solution is its simplicity, security and scalability. We work very closely with our partners, customers and suppliers to minimize operationalburden. Our production line solutions are completely integrated with most of the top hardware providers and work across printer technologies. The consumer engagement platform has been developed keeping scalability and operational ease in mind. A client cannot only use the multitude of existing options to digitally engage with consumers, but also create their own. The Track and Trace functionality is developed and implemented is such a manner that it can be seamlessly integrated into a clients' existing ERP systems. The patented algorithm for generating codes and then validating them is backbone to ensure that all Kezzler solution work in sync with each other and deliver results at lightening speeds! Brand Protection Track & Trace Consumer Engagement Thomas Kormendi CEO Kezzler AS 11 ISSUE 31 ASPA News
  15. 15. 12 cross the globe, illicit networks Aare infiltrating and corrupting legitimate business markets, reducing productivity, and dis- incentivising investments in research and d e v e l o p m e n t — n o t t o m e n t i o n , jeopardising public health, emaciating communities' human capital, and eroding the security of our institutions and governments. FICCI's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy [CASCADE] has been over the years concertedly addressing this issue through its various Pan India awarness generation activities, building capacities of law enforcement officials and undertaking ground breaking research abouttheextentandimpactof themenace. In furtherance of its mandate, CASCADE organised its 3rd edition of its International Conference titled - Cross Border Illicit Trade in Goods: Impact on Economy and Consumers in collaboration with the Department of Consumer Affairs, Govt. of India on December 08, 2016 in New Delhi. The conference was organised with an aim to ensure that national and international stakeholders can dialogue with policy makers to identify opportunities for joint action between governments and the private sector to combat illicit cross border trade. Inaugurating the conference, Shri Hem Kumar Pande, Secretary, Department of Consumer Affairs, Govt. of India, said, “Operations in illicit cross border trade, is a global problem of enormous scale, impacting virtually every product sector and every country. The illicit market for fake or counterfeit or smuggled products is also one of the biggest challenges faced by Indian industry, which is impacting 'Brand India' globally. Given the key role of technology, invention, and innovation in India's current economic development, the value of “Indian made” products where legitimate business owners' rights are safeguarded is a key to sustain the country's growth strategy. Addressing these issues cannot be done in isolation; it is a joint responsibility of consumers, enforcement a g e n c i e s , t h e i n d u s t r y a n d t h e government.” Dr. A. Didar Singh, Secretary General FICCI in his welcome address stated that “India today has the potential to become a global manufacturing hub. However, widespread smuggling and counterfeiting, can act as a dampener in achieving this goal. It is time that we, as a nation and as a part of the global economy, call for stern and resolute counterstrike force against such activities. This has several elements, starting with greater vigil at the borders. Enforcement mechanisms at the borders are critical in combating cross border Fighting the Invisible Enemy: Smuggled Goods, a Threat to India's Interests Mr. Anil Rajput, Chairman, FICCI CASCADE ISSUE 31FICCI Cascade
  16. 16. 13 Seizure of Smuggled Goods (Rs. Crore) Product / Commodity 2014-15 2015-16 %age Increase / Decrease Cigarettes 90.75 162 78.5% Fabric / Silk Yarn 24.03 41.78 73.8% Gold 692.35 1119.11 61.6% Machinery Parts 563.18 447.1 - 20.6% Electronic Items 37.85 17.98 - 52.5% illegal trading activities. On one hand, while open borders facilitate travel and trade, they also make border control more challenging due to the emerging new forms of cross border crimes. Hence, it becomes vital that the border-managing enforcement agencies borders are prepared to identify possible suspects and their victims in such ill-intentionedcrimes.” Mr. Najib Shah, Chairman, Central Board of Excise and Customs (CBEC) stated that“illegal trade is a growing menace and the need of the hour is collaboration among stakeholders to tackle it. Growth of illicit trade through e- commerce is a new challenge, which also needs urgent attention. Unchecked, it will continue to multiply. We also need to lay equal emphasis on the rights of legitimate businesses, which are greatly impacted by illegaltrade.” Mr. Anil Rajput, Chairman FICCI CASCADE in his address said, “Transnational smuggling through international channels, involving outright s m u g g l i n g o f p r o d u c t s o r m i s - declaring/under invoicing of values is a common and rapidly growing problem in India as in most other parts of the world. Robust regulations, prioritising enforcement activity and providing sufficient enforcement rights to the agencies are the need of the hour. Increased vigil on our porous borders, especially in the backdrop of our relations with our neighbours should also be treated as a priority.” He further added that illicit trade remains a formidable adversary for the nation. The root cause of this is sometimes a policy framework that incentivises unscrupulous elements to take advantage and make inroads in the system. This encourages anti-social elements to dictate terms to the supply chain and create havoc for thepublicatlarge. On this occasion, a report – 'Invisible Enemy –AThreat to Our National Interests' – focusing on the negative impact of smuggled goods on the Indian economy and businesses was also released. According to the report, there are five goods where the seizures by DRI have been the highest in the past few years. These five goods are: 1.Gold 2.Cigarettes 3.MachineryParts 4.Fabric/Silkyarn 5.Electronicitems The report findings highlight that smugglers are now switching over to cigarettes and fabric/silk yarn as they are low-risk, high-reward goods. As per the report, in the last one year, the DRI seizures of smuggled cigarettes has increased by 78 per cent (from INR 90.75 crores in 2014-15 to INR 162 crore in 2015-16) followed by fabric/silk yarn, where the increase is by 73 per cent (from INR 24.03 crores in 2014-15 to INR 41.78 crore in 2015-16). The seizures of gold have witnessed an increase of 61 per cent (from INR 692.35 crore in 2014-15 to INR 1119.11 crore in 2015-16). While the DRI seizures of machinery parts andelectronicitemshaveseenadecline. The primary reason for the rise of smuggled cigarettes into India is the high taxes. Cigarettes smuggling is a low-risk, high- reward criminal activity because high taxes on cigarettes induce great financial incentive for smugglers to earn huge profits. Persistently increasing taxes on cigarettes provide a lucrative opportunity for tax evasion due to tax arbitrage between the country of exports and in the importing country. On the other hand, the smuggling in fabrics/silk and yarn is primarily driven by the demand-supply gap and the dependence on imports. The Indian textiles industry faces acute shortage of raw materials in the form of cotton and raw silk. While India is the second biggest producer of silk, it is ISSUE 31 FICCI Cascade
  17. 17. also the second biggest importer of silk in the world (India's share in 12 per cent of the total world imports) after Italy. India's dependence on imports of silk and yarn has seen a consistent increase over the last five years, having grown from 0.8 per cent to 1.12 per cent of the total imports. This clearly indicates that domestic production is highly insufficient to meet the growing domestic demand, in turn fueling smugglinginthesector. The international conference highlighted and deliberated on issues such as Implications of Illicit Cross Border Trade on the Global Economy, Strengthening Border Management System for Effective Enforcement and An Interdisciplinary Approach to Sharing Market Intelligence on illicit cross border trade. The deliberations explored the socio-economic consequences of cross border illicit trade and the policies needed to deter this activity. The discussions contributed to an integrated vision of national security and p u b l i c s a f e t y , p r o v i d i n g a n interdisciplinary dialogue, which will attract industry regulators, customs authorities, law enforcement, major producers of consumer goods, consumer associations and NGOs. With an underlying objective to deepen understanding of illicit trading activities across borders, effective strategies to dismantle such illegal business practices by thepublicandprivatesectorsweresought. The conference saw a host of notable speakers, national and international from World Customs Organisation, Delegation of the European Union to India, Department of Homeland Security- Homeland Security Investigations, USA, Unilever, Sanofi, United IPR etc. It was also addressed by notable dignitaries including Mr. P. C. Jha, Advisor, FICCI CASCADE & Former Chairman, CBEC, Mr. Deep Chand, Advisor, FICCI C A S C A D E a n d f o r m e r S p e c i a l commissioner of Police, New Delhi, Mr. D. P. Dash, Principal Additional Director General, Directorate of Revenue Intelligence, Mr. Rajeev Krishna, IPS Inspector General (OPS) Border Security Force, Mr. Gaurav Tyagi, Commandant & Joint DirectorAnti-Smuggling & Narcotics Control, Coast Guard, Mr. A K Gautam, Deputy Inspector General, Indo-Tibetan Border Police and Mr. Binod Nayak, Dy. InspectorGeneral,SashastraSeemaBal. India has a committed border protection force plus enforcement agencies that is not only safeguarding the long national borders against trans-border criminals including smugglers and terrorists but also ensures prevention of smuggling and enforcement of anti-smuggling & anti-counterfeiting laws. FICCI CASCADE acknowledges the efforts put in by the officers who show high standards of rigour and intelligence in p r e v e n t i o n o f s m u g g l i n g a n d administration of related matters which impact Indian business and economy. To encourage and acknowledge the work of our law enforcement agencies FICCI CASCADE also felicitated the best performingofficersfor theperiod2015-16. Thewinners wereasfollows: 1. Mr. A K Parayil, Deputy Inspector General- Commanding Officer, Indian Coast Guard Ship Sangram 2. Mr. Sanjeev Kumar Singh, Commandant, Indo-Tibetan Border Police 3. Mr. S. N. Dubey, Deputy Commandant, FGT, Ferozpur, Border Security Force, Ministry of Home Affairs 4. Mr. Dinesh Kumar, Deputy Commandant, BIAAT (Dehradun), Border Security Force, Ministry of Home Affairs 5. Mr. S Sathianarayanan, Deputy Commissioner, Chennai III Customs 6. Ms. Mandeep Sangha, Deputy Director, Directorate of Revenue Intelligence (DRI), New Delhi 7. Mr. Yogendra Kumar, Sub Inspector, Economic Offences Wing, Delhi Police 14 ISSUE 31FICCI Cascade
  18. 18. 18 It is estimated that more than 95 per cent of enterprises across the world are SMEs, accounting for approximately 60 per cent of private sector employment (Ayyagari et al. 2011). Japan has the highest p r o p o r t i o n o f S M E s a m o n g t h e industrialised countries, for more than 99 per cent of total enterprises (EIU 2010). In India, Micro, Small and Medium Enterprises (MSME) contribute nearly eight per cent of the country's GDP, 45 per cent of the manufacturing output and 40 per cent of the exports. They are the nurseries for entrepreneurship and innovation. They are widely dispersed across the country and produce a diverse range of products and services to meet the needs of the local markets, the global market and the national and international value chains. However, the figures are not as impressive. The share of India MSME in exports having declined from 406.2 per cent in 2009-10 to 43 per centin2012-13. NeedofSecurePackaging It's critical for MSMEs to step up their innovation drive to gain a larger share of the global markets and become more responsive to the emerging global market trends. For this, they need to understand the value of Intellectual Property Rights (IPR) and brand protection. The reasons are as follows: 1. Protection of Innovation/ Importance of IPR By nature most of the MSMEs are entrepreneurs and innovators. Almost every MSME has a trade name or one or more trademarks, however, they almost never protect their IPR as a preventive measure, and there are ample chances that their products/ideas can be cloned or duplicated by unscrupulous elements.They need to understand that brands are their biggest assets. Without Intellectual Property Protection there is a strong risk that investments in R&D, product differentiation and marketing efforts might get stolen or copied. IPR enable SMEs to have exclusivity over the exploitation of their innovative, new or original products, theircreativedesigns andtheirbrands. 2. Globalisation and Risk of Counterfeiting Globalisation and trade liberalisation has made it crucial for most enterprises, including SMEs, to become internationally competitive even when operating wholly in the domestic market. The globalisation has also increased the chances of counterfeiting inthesupplychain. For example, in a recent case, the Nigerian Government Drug Regulatory Authority (NAFDAC) has reported about the detention of a large consignment of fake anti-malarial generic pharmaceuticals labelled 'Made in India' but produced, packed and shipped in China. This was a classical example to malign India's name and to destroy the export market for Indian pharmaceutical companies that has acquired a strong position as a producer and exporter of inexpensive generic medicines, which can treat with efficacy and safety at par with their patented alternatives, but at a very reasonable cost. Subsequently, the Government of India advised all pharmaceutical manufacturers to adopt authentication /tracking solutions in order toavoidsimilarincidents. 3. Importance of Packaging in Marketing The Government of India is already sensitising exporters on this issue. Packaging is no more considered only for protection and preservation of products. These days, with the increasing market competitiveness, companies are adopting different packaging techniques. Usage of authentication technologies like colour changing features, holographic images, tamper evident seals, track and trace etc., for primary and secondary product packaging not only helps companies in protecting the products from being duplicated, but also acts as a potent marketingandsalespromotiontool. 4. Adoption of ISO Standards - Commitment to Quality The Honourable Prime Minister of India has recently announced 'Make in India' initiative with the intention to make India a m a n u f a c t u r i n g h u b . T h e I n d i a n Government is helping the MSME through various programs to increase their quality. The MSME can adopt ISO: 12931 to protect their goods against counterfeiting. Perhaps, the government of India can also consider announcing initiatives to MSME that adopt this standard. This will set an example for the international fraternity about their commitment to quality and productauthentication. In conclusion, it is safe to say that protection of brand and Intellectual Property must be considered to be a pre- requisite in the process of building a business, and an MSME business definitely has a greater chance of success when it adopts the old adage – Prevention is better thancure. The Need for authentication solutions for MSMEs' 15 ISSUE 31 ASPA News

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