The Ersatz Medicine Shoppe

The FDA has released a warning about counterfeit drugs at a couple of The Medicine Shoppe pharmacies in Baltimore.

Is the Produce Industry Having an Identity Crisis?

Although I've tracked it very closely, I've up until now hesitated to blog about the Salmonella Saintpaul produce crisis for one reason: the culprit keeps changing.

Here's a simplified (and highly editorialized) chronology:

• People start getting sick from a rare form of Salmonella, local health sleuths hypothesize that tomatoes linked all the victims (they ate salsa? tomatoes have carried Salmonella before)
• the FDA issues a warning: don't eat Roma or Round tomatoes, on-the-vine and cherry are okay!
• widespread consumer panic ensues. What's a Roma? Aren't all tomatoes round? What's that in my Caprese salad?
• the FDA quickly narrows the crisis to Roma or Red tomatoes grown in Florida and Mexico, because only those regions were growing at the time... meanwhile the sickened count grows.
• Wait a minute. Who knows where their tomatoes were grown? Widespread panic (and tomato avoidance) continues
• The FDA posts (somewhere) a list of states that are 'cleared' ... okay, but I still don't know where my tomatoes came from. More hospital cases.
• By now the hullaballoo from the tomato industry is deafening. No contaminated tomatoes can be found and the sickness toll creeps higher. What about tortillas? What about peppers? Maybe it was cilantro in the salsa?
• Suddenly Jalapenos are under suspicion
• Then: a miracle! A lone Jalapeno pepper is found in a Texas processing plant with the Salmonella Saintpaul fingerprint (CSI: produce?). But no-one's saying where it was grown. it was the peppers after all!
• Maybe
• Then, another breakthrough... the guilty jalapeno pepper is traced to a farm in Mexico. US industry breathes an exhausted sigh of relief, the origin is finally identified.
• But wait. Hold on. It's serrano peppers! the Salmonella strain is found in the irrigation water in a Serrano pepper farm in a different state in Mexico. So there were 2 culprits! (Maybe they were working together?)
• Hold the presses again ... the Mexican growers shout. The water in that water tank hasn't been used for 2 months.

?????

At this point everyone is either sick or tired, or both. This whodunnit is more twisted than an Agatha Chritie play.

It certainly looks like tomatoes got an unfair rap. They (probably) never made anyone sick, and the industry lost a lot of money while consumers recoiled from potentially 'killer tomatoes'. It made for great headlines - but there wasn't more than a hypothesis. Panic leapt from one produce category to another with every announcement. Regulation is likely. Was it the serrano, or the jalapeno? Maybe they both went through a processing facility that somehow cross contaminated them? Or maybe Saintpaul is actually quite common ... and we're finding it because we're looking for it?

Even without the answer, what can we learn from this dreadful debacle?

1. It's impossible right now for consumers to know where their produce comes from. So they stop buying it all together until the problem goes away. Identity would be a good thing.
2. The industry demonstrated that tracing a product to its point of origin is not impossible ... but it's hard work, and you wouldn't want to do it every day if you're a grower or processor. If it was instantaneous and effortless, that would be a good thing too.
3. Other industries have proven that it is perfectly possible to trace products quickly and accurately - without the government telling them to do it. Take the semiconductor industry. End customers (like Dell or Toyota) can trace a defective chip back to the exact wafer it came from. Why the difference? Because the customers demanded it - it made sense for their business, and they have the power to demand it.
4. Other industries have also taught us that more government regulation on traceability is not necessarily effective either. The FDA and State Board of Pharmacies have been trying to force RFID-based ePedigree on the pharmaceutical industry. So far without success.
5. In spite of the millions of dollars growers and processors have invested in state-of-the-art clean facilities and HACCP practices in the US and Mexico - consumers are afraid, and in the dark. Which is the brand of tomatoes we all trust to be safe? (or put another way, who is the Volvo of produce?) Where is the "good housekeeping seal of approval" that tells consumers - these guys are traceable, and they do everything by the book?

And finally this nugget. Saint Paul is the patron saint of journalists. Too ironic, no?

From whence cometh my watermelons?

An article in The Packer today pointed the way to the future of fresh produce ... item-level traceability. Soon, consumers will be able to punch a code into a website or their cell phones and find out whence their melons came, and whether they're affected by a food safety issue. Of course, this also gives the brand owner an opportunity to share their food safety and growing practices in a rich and accessible way.

Watch this space. This is just the thin edge of the wedge. So to speak.


(Disclosure: the item-level traceability coding solution is supplied by YottaMark)

Fake Chips Are Heating Up


Okay, bad pun. Of course, overheating is only one of the threats from counterfeit semiconductors. Fraud in electronics includes: counterfeiting, re-marking, 'pulled' devices of dubious integrity, warranty fraud, FRU fraud, and diverting/gray parts. Statistics are notoriously hard to come by, and in this blog we've highlighted numerous instances (see our Feb 22 blog, for example). Here's some more anecdotal data:

• One of every 10 tech products sold is counterfeit, leading to an estimate of a direct loss over $100 billion a year. Direct losses include recalls, increased warranties, rework.
• High-tech products account for four of the top ten border seizures, according to U.S. Customs.
• Last year, the U.S. and European customs officers seized more than 360,000 fake computer chips in a joint operation. Under “Operation Infrastructure,” the fake goods seized carried more than 40 different trademarks.
• A $2 fake part leads to losses of $20 if detected at the manufacturing board level. It costs $200 if detected in the market.
• KMPG will release a white paper in May that estimates the profits lost due to the gray market. It will be posted here, along with KPMG's previous white paper.

This blog entry on VentureBeat by Dean Takahashi, the former Tech Talk Columnist at the San Jose Mercury News, frames it nicely: "Electronics counterfeiting has hit an epidemic level. Surely, there have to be opportunities for start-ups in fighting this problem."

A recent article in Purchasing magazine found that 42% of procurement professionals felt counterfeiting was now a 'serious problem'.

YottaMark has been working on the SIA and SEMI anticounterfeiting task force to establish an industry standard for detecting fake components. The topic will be covered in a session at this year's Semicon West in San Francisco in July.

Oh No! Fake OMO!

We've been talking about the trend for counterfeiters to target ordinary branded consumer goods - not just luxury items. This news article from Australia is a great example: counterfeit washing powder.

The general counsel for Unilever, Mary Weir, said the Omo case was representative of a rise in the number of counterfeit consumer products entering Australia.


A recent trademark conference in Sydney, highlighted examples of the rise in fake consumer goods and foods and their risks:

■ Sunglasses made of cheap plastic without the graduated lens to prevent optical damage, causing headaches and blurred vision when worn.

■ Fragrances made with acetone which not only stains clothing but can cause skin allergies and asthma attacks.

■ Toys made with unsafe plastics, rubber, paints, glues, dyes and loosely fitted parts.

■ Clothing. About eight million counterfeit clothing items are brought into Australia annually, costing the local fashion industry $1 billion a year.

■ Food. Battery-farmed eggs labeled as free-range, basmati rice bags diluted with inferior varieties, and false claims on the organic status of fruit, vegetables and meats.

■ Electrical goods. Small appliances that do not comply with Australian standards and which short-circuit, leading to electrical hazards in the home.

Knocking Off Chips

Even 'though manufacturing integrated circuits (ICs) is one of the most costly and complex processes known to man ... chips are still susceptible to counterfeiting. Sometimes devices are painstakingly reverse engineered, other times these are simply cheap devices re-marked to make them look like expensive ones.

EU and U.S. senior officials said on Friday they would crack down on counterfeiting of computer components after they seized over 360,000 fake items in just two weeks in a joint operation at the end of last year. ICs and computer components of over 40 trademarks including Intel, Cisco and Philips, worth more than $1.3 billion, were seized during the operation, the officials said.

All kinds of devices are affected - military spec, consumer electronics, end-of-life products, simple components, complex ICs, assemblies (like Network Interface Cards), and devices (such as phones and routers).

SEMI, the Semiconductor Industry's standards body is developing a global standard to detect and deter counterfeit product. Contact us to find out more about how this will work.

The Latest Hall of Shame

The German Plagiarius Awards call attention to the most flagrant fakes product imitations and raise awareness about the dangers of piracy. In addition to look-a-likes of chairs and salt & pepper shakers, were medical devices, pens, children's toys, and faucets with 200% too much lead in them. This is a wake-up call to those manufacturers who think they're too small, or their products are too complex, to attract counterfeiters.


Perhaps the US Chamber of Commerce, as part of its CACP activities, should do the same?