ProPak panel discussion highlights the paradox of anti-counterfeit packaging

On day-two of ProPak Mumbai 2023, a panel themed 'Innovative Solutions for Secure Futures: Uniting Phygitally, Empowering Packaging, Ensuring Traceability' shared insights into their practical efforts within their factories, and delved into collaborations with converters, brands, and partners

05 Sep 2023 | By Disha Chakraborty

One of the conclusions from the panel discussion was brand owners are unwilling to adopt a proactive approach

India’s anti-counterfeit packaging market is expected to grow to USD 24 bn by 2030. This translates into a growth of 11.8% from 2022-2030. In 2021, the market was valued at USD 9 bn. A panel discussion was moderated by Ramu Ramanathan, editor of WhatPackaging? and PrintWeek magazines. The discussion included panellists like Inder Sharma, president, sales and marketing, Holostik; Nityanand Shenoy, advisor PRS Permacel (Saint Gobain Group); Girish Pai, president and chief commercial officer, PharmaSecure PAS; Gaurav Sathaye, director, United Speciality Inks.

Ramu Ramanathan (RR): Anti-counterfeit packaging market is expected to grow at USD 24 billion by 2030. What does your data suggest?
Gaurav Sathaye (GS):
As mentioned in the data from the ASPA, The State of Counterfeiting in India report 2022, there is 25-30% of counterfeiting in some of the products. This is a huge number. This is part of a survey that was conducted pan India. And so, 27% of the consumers that are buying and have ended up buying duplicates. These consumers don't even know that there might be a duplicate. So the awareness levels are relatively low. Another striking point coming from the report is 31% of people are willing to buy knowing that it's a fake. There are a lot of intangible effects and in fact, it ends up impacting the revenues of the company.

RR: What is the way forward, Gaurav?
GS:
I think the responsibility lies on us as a solution provider economy to spread awareness. But as India continues to grow, the problem will become larger, and hence the need for these solutions comes in.

RR: How is the nation preparing for this?
Inder Sharma (IS):
Counterfeiting is not a national problem anymore, it's a global challenge. Anti-counterfeiting is the need of the hour. In 2013, the counterfeiting business globally was USD 1 billion. Today, in 2023 it is USD 3 trillion. In the FMCG sector, 28% of the products which are available in the stores are duplicated. So, every third or the fourth product which is available in the market is fake. 27% are willingly buying the product that's in case of the epidemic, but if you talk about none of us will buy knowingly that is fake.

RR: As a technology provider, what are the steps you are taking in this direction Girish?
Girish Pai (GP):
The major problem with the brand owners is they know counterfeiting is transpiring. But the only challenge is the willingness. Until it becomes a calamity, they are not ready to adopt a pro-active approach. So the major bottleneck is the mindset because they think of it as an expense. But it is not an expense, it's an investment. But we make sure, when we go to the meetings, we talk about the return on investment (ROI) and then we give practical implementable suggestions.

RR: What is impacting the counterfeiting market?
GP:
I think there are two things. One is lack of awareness on the part of the consumer. As Gaurav Sathaye and Inder Sharma have mentioned, 30% of the purchasing public ends up buying a product knowingly. This attitude must change. That's one place where I believe the government has a strong role to play. The second part is, the industry or brands have to be spurred into action. It should not be viewed as an expense. Anti-counterfeit measures are an investment. And I'm sure all of us on this panel can demonstrate that the ROI is good, because you're not only getting incremental revenue, but there is a lot of long standing harm that can hurt your brand if something goes wrong. So it's an investment, and it reaps benefits.

RR: How are solution providers like PharmaSecure convincing the brand owners?
GP:
The key is to battle the inertia or inaction on the part of brand owners and boost the awareness quotient. The ecosystem has changed. I think what is different for PharmaSecure is, some of my colleagues are in the physical security space, holograms and inks. What's changed, and the last decade is a testimony to this is, these days, almost everyone owns a smartphone.

At Pharmasecure we are armed with a tool, which can provide the code. And that lends itself to technological possibilities. The idea is how to leverage this and ensure it works. It's not just the industry, I think all these stakeholders, the end consumer and the policy-makers need to act in conjunction to ensure that we effectively combat counterfeiting.

RR: Nityanand Shenoy, you have been an integral part of this industry for 40 years, can you give us an overview of the current situation?
Nityananda Shenoy (NS):
First let me start with the government. Can you tell me how many counterfeiters pay income tax? How many counterfeiters pay GST? How many counterfeiters pay any form of direct or indirect taxes? So, the first thing is the revenue loss which is due to the government. Even if you take the figures which have mentioned been thusfar, it will add an average 50% GST to the government treasury.

RR: That's the government. What about society?
NS:
That's what nobody talks about, the impact on society. The culprit is this value system and a prominent issue is funding. The biggest funding for terrorism comes from counterfeiting. The amount of profits are very high, and to protect the profits, the funds are channelled into narco smuggling and terrorism. I urge the consumer to wake up. I think consumer apathy is the biggest problem and the biggest source of counterfeit.

RR: If you can share initiatives that ASPA has taken for the benefit of our audience.
NS:
Number one action was to get all the solution providers under one platform and have a common set of goals. We set goals that every company would achieve while working independently. Also ASPA members could convince the brands that they are certified by ASPA. So the brands know that if they buy from ASPA certified businesses, they will get a genuine solution. And that solution will not be sold to somebody else. Secondly, we have the ASPCA newsletter for knowledge dissemination. Thirdly, we host four conferences where brand owners, the government officials and our members spread awareness.

RR: You mention inertia. What kind of inertia is this?
GP:
Most of us are resistant to change. Most of the technology solutions mean a bit of change. It may not be drastic, but there is an incremental change in the process, and the way their factory works. So often the inertia comes with doubts like will my production get impacted? Will that be a productivity loss? The answers to all of them are no. And yet, there is a mind block. I think a lot of inertia stems from that mind block. And the only way to change that is to believe. Believe in technology. This is our responsibility to convince the brand owners that their doubts can be cleared.

RR:  At Holostik, I think about 85 to 90% of your clientele are from the SME and MSME sector. What happens behind the scenes with your customers in this sector?
IS:
We do a concept survey. Because anti-counterfeiting is all about concepts, we go to the market, we understand the pain points of brand owners, what are the challenges they are facing, and how big the counterfeiting is. For example, if they are a start-up and need anti-counterfeiting as an additional feature, or if there is a space constraint; and if in the packaging  they want the security – then what kind of investment are they willing to make? These are some of the questions and based on the response, we provide a solution.

RR: There is a notion that a lot of counterfeiting is confined only to holograms.
GS:
When we talk of security, it's a neglected area. If the product is on the shelf and it has exceeded its shelf life or overshot its expiry date, it can create a lot of problems. Some visual indicators can lead a team to resolve this. This would be functional packaging, and can ensure secure packaging. Anti-counterfeiting and authentication technologies help brands in the court of law to prove the authenticity of the product. The key in this segment is to be one step ahead of the rule breakers at all times.

RR: There are more QR codes being generated than human beings on the planet. But how non-clonable are your QR codes?
GP:
QR codes are very simple and easy to do. But the security depends on the technology which underlies that. So in our case, we have a patented technology in the US, Europe, and most markets that we operate in. So there are various non-clonable or encryption features that are available. These encryption features could be at a batch level, or even be at a unit level. The unique identifiers that generate these QR codes are in a completely randomised, non sequential thing. So even a person in our company can't predict that the code produced for your product will be in these one lakh packs, or the next one lakh packs.

RR: So if you can let us know about how secure the item is, and what's the intellectual quotient a counterfeiter requires to create this kind of counterfeiting?
GP:
There are multiple types of technologies, which can make it very difficult. Also, let's say God forbid, if in spite of all these solutions, the counterfeiters are able to copy a few QR codes and replicate it, one can add a detection level as I demonstrated just now. or what Gaurave Sathaye demonstrated. The point is, to have multiple levels of anti-counterfeiting measures. This ensures a safety net.

RR: Nityanand Shenoy, final question to you. With revamped regulations, do you think the packaging industry manufacturers who read WhatPackaging? magazine are offering the right products, not only in terms of attractive features but also innovations?
NS:
Most regulations like traceability are print related activities. It is very easy for the packaging industry to adopt. However, there is a movement towards innovative packaging and cost-effective solutions which are not necessarily driven by regulations.

RR: So, there is a huge challenge about implementing a regulatory framework for SMEs and MSMEs in India?
NS:
The point is, the scope of packaging is vast. The number of players are huge (micro / small/ medium / registered / unregistered / large / local / international) hence implementing regulatory challenges will be not easy as it seems.

Tags : ProPak 2023
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What is the point of focus for the packaging industry, currently?

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What is the point of focus for the packaging industry, currently?

Margins

 

24.49%

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26.53%

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24.49%

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24.49%

Total Votes : 49