Fonterra trials blockchain technology with Chinese shopping giant Alibaba

Chinese shopping giant Alibaba is teaming up with Fonterra and NZ Post to trial away of tracking your food from paddock to the plate.

Using blockchain technology and QR codes, consumers in China will know exactly where their milk came from.

It's hoped the initiative will put a dent in the US$40 billion the food industry loses to fraud worldwide each year.

"In China and many other markets, we know consumers want to be able to trace the products they purchase online," Fonterra's Christina Zhu said at the launch in Auckland on Friday.

"We welcome being a part of creating a globally respected framework that protects the reputation of food companies and gives greater value and consumer confidence."

"Food fraud is a significant global challenge, particularly with the growing complexity of supply chains," Alibaba's Alvin Liu said at the launch.

"In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both end consumers and merchants."

Blockchain technology works by recording all transactions and data publicly, and it cannot be altered. It was invented by the mysterious creator of the digital currency bitcoin, Satoshi Nakamoto.

By recording details of a product's origin and history on the blockchain, consumers can see just where it came from - preventing fraudsters from passing off inferior, counterfeit products as coming from New Zealand, for example.

"This authenticated platform will increase New Zealand's already strong reputation of providing clean, green and safe products in China," said NZ Post CEO David Walsh.

"Consumers will be able to track their purchase from paddock to plate, with full and complete knowledge of its origin and journey with us."

Using blockchain technology to trace a product's origin could help prevent incidents like the 2013 botulism scare.

If it's a success, the blockchain trial will be rolled out across all of Alibaba's marketplaces.