Codentify
From Wikipedia, the free encyclopedia
Codentify is a product serialization system developed and patented in 2005 by Philip Morris International (PMI) for the verification of authenticity and production volume, as well as supply chain control of tobacco products. In the production process, each cigarette package is marked with a unique visible code (also called “Codentify”), that allows authenticating the code against a central server.[1][2]
In November 2010, PMI licensed this technology to its three main competitors, namely British American Tobacco (BAT), Imperial Tobacco Group (ITG), and Japan Tobacco International (JTI), and the four companies together formed the Digital Coding and Tracking Association (DCTA) which works to promote the system in order to replace governmental revenue stamps.[3] Codentify was branded by its inventors as a “track & trace and product authentication technology”.[1]
In July 2004, Phillip Morris International and the European Union had settled a 12-year-long legal dispute concerning cigarette smuggling allegations. PMI agreed to pay US$1.25 Billion to the EU budget and its member states. In addition, PMI was legally obligated to mark its products with trackable serial codes.[4][5][6] Agreements were subsequently signed with the other three major tobacco companies.
PMI's affiliate company, Philip Morris Products S.A. created and patented the Codentify system in 2005.
In late 2010, PMI licensed Codentify technology to its main competitors BAT, JTI, and ITG free of charge.[3] The four companies, which together account for 71% of global cigarette sales (excluding China), agreed to use the PMI-developed system on all of their products to ensure “the adoption of a single industry standard, based on Codentify.”[7] The Framework Convention on Tobacco Control (FCTC) immediately voiced concerns that “Codentify should never be used for tracking and tracing purposes as tracking and tracing provisions should be implemented under the strict control and management of governments.”[8]
In 2011, the four companies formed the Digital Coding and Tracking Association (DCTA) to promote international standards and digital technologies to help governments fight smuggling, counterfeiting, and tax evasion. The association was officially launched in 2013.[9]
According to the DCTA, around 12% of the global cigarette market is illicit, depriving national governments of more than US$40 billion a year in lost tax revenues[10] and some say this is a serious underestimate.[11][12] The agreements between the EU and the four major tobacco companies aim to stem the illicit trade of cigarettes, but some academics and the anti-tobacco movement have criticized it as a wholly inadequate deterrent.[13][14] The EU has since not renewed this deal after MEPs complained that it was inappropriate for governments and tobacco companies to have such a deal.[15]
Inexto
In June 2016 the DCTA announced that it transferred Codentify to Inexto, an affiliate of the French Group Impala.[16] This was criticized by leading industry watchdogs such as the FCTC and academics such as Anna Gilmore, who is the director of the tobacco control research group at the University of Bath. She said that “Inexto could not be considered sufficiently independent from the tobacco industry". Martyn Day, Scottish National Party Member of Parliament, says while Codentify was sold "the new owner is merely a front company and that the system is still under the effective control of the tobacco firms".[17] Other academics such as Luk Joossens, who is the advocacy officer of the Association of European Cancer Leagues, said the sale was “predictable” and that tobacco companies will now “pretend” that Codentify is no longer part of the tobacco industry.[18] PMI have rebutted that “Inexto is fully independent from the tobacco industry."[19]