Shanghai Startup to Use Blockchain to Verify Wine Origin, Fight Counterfeits

VeChain, a Shanghai-based blockchain startup, is testing a blockchain application to verify of the wine supply chain and fight counterfeits, South China Morning Post reported May 24.

The Chinese wine industry is worth $2.8 bln, but according to the South China Morning Post, aphorisms such as “the Chinese gulp down more ‘French’ wines than France makes” and “at least half of the Chateau Lafite-Rothschild consumed in China is fake,” have weakened public trust in the quality of the product.

As part of the initiative, VeChain is working with retailer Shanghai Waigaoqiao Direct Imported Goods (DIG) and testing the products of French producer Pierre Ferraud and Fils. In 2017, the company reportedly signed a deal to deliver the French producer’s Beaujolais Nouveau red wine verified on its blockchain platform, which is linked to DIG in terms of retail.

By scanning a quick response (QR) barcode, consumers will be able to obtain essential information about the wine, including winery details, grape variety, an 18-digit Chinese customs declaration number, dates when a bottle was taken from the storage and delivered to a bonded warehouse in Shanghai, as well as when it was supplied to DIG outlets in the city. Fu Yu, a partner at VeChain, commented on the project:

“The beauty of blockchain is that shoppers can see information about the whole life cycle of a bottle of wine from various sides, including vineyards, logistics and retailers.”

When it comes to premium wines, the startup plans to integrate a designated near field communications (NFC) chip near the wine stopper. If the chip is broken, it’s no longer possible to read or write data onto its blockchain.

10,000 blockchain-tracked wine bottles have been shipped to DIG, and the number is expected to increase tenfold in 2019. Fu also mentioned that VeChain is engaged in negotiations with an Italian vineyard about utilizing blockchain to establish a foothold in China. The same offer has also been made to wineries in Australia and South America.

In March, Chinese e-commerce giant JD.com began implementing a blockchain application to track the supply chain of its meat sales. JD started the initiative to boost consumer confidence in the providence of beef products. According to the chief technology officer at JD, the new blockchain-based system will reassure customers that they have purchased "safe, reliable products for their families."

Last month, Cointelegraph reported that Walmart is using a blockchain application to track its food products, allowing them to verify product information, as well as reduce waste and improve contamination management and transparency.