New tech tackles multi-billion problem of fake whisky and spirits

It aims to tackle the multi-billion problem of counterfeit products that flood international markets, while changing the way brands prove their provenance and report their sustainability credentials.

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DeLux was founded by Sylwia Fitch, who has worked for a number of luxury spirits and technology businesses, including Pernod Ricard and Diageo. She also completed a blockchain and cryptocurrency strategy programme at Said Business School at Oxford University.

Former Diageo executive Ian Wright is chair of DeLux and an investor in the firm. He is also co-chair of the UK’s Food & Drink Export Council and a partner at advisory firm Acuti Associates. Other board members come from backgrounds in drinks, luxury products and technology.

DeLux’s technology is designed to make every cask or bottle verifiable, using a digital product passport. DeLux said it aims to “redefine how rare physical products are valued, experienced and trusted in a digital-first world”.

It is trying to tackle the big problem facing the industry that just over a quarter of alcohol consumed globally is illicit, resulting in annual revenue losses of $8.9 billion (£6.6bn).

Sylwia Fitch | Supplied

It will provide producers and consumers with what it says is the first fully transparent, secure and instantly accessible tech solution to track every part of a product’s journey.

Its platform is being developed in collaboration with Switzerland-based, global firm The Hashgraph Group (THG), a distributed ledger technology provider. THG specialises in delivering enterprise solutions on the Hedera network. Hedera underpins solutions used by some of the world’s largest organisations, such as IBM and Dell Technologies. Hedera’s technology provides a tamper-proof record of all data entries across the product life cycle, secured to ensure trust and transparency from grain to glass.

Fitch said: “By partnering with The Hashgraph Group we’re creating a solution with Hedera that goes beyond existing systems - delivering not only provenance and authentication but also future-proofed compliance, sustainability validation and a new level of consumer experience.

“The support of Hedera means we can roll out the next phase in our product development and offer the spirits category a comprehensive digital passport for spirits.”

Fitch explained how her experience led her to set-up DeLux to fill a gap in the market, addressing the issue of fake spirits. She started working in Poland with Pernod Ricard, before moving to Chivas Brothers in London, the group’s Scotch whisky division. She left to join Diageo to run their Reserve luxury spirit portfolio in the Middle East and Africa. She then took a role heading international marketing for British luxury phone manufacturer Vertu, before co-founding an electronic trading options platform for hedge-funds and banks.

Fitch added: “As part of my blockchain and cryptocurrency strategy programme at Oxford University I wrote a paper about using this technology in the luxury market and it was well received. From there I went on to create DeLux to support authentication and transparency across luxury goods.

“Unfortunately, there are at least three times more fake goods in the luxury global market than original products. It’s a massive multi-billion problem, but you can’t do everything. I decided to focus on the areas I have a passion for - luxury spirits and whisky. There are obvious challenges and opportunities in those markets, from counterfeits to legislation and consumer demands.

“The team we’ve put together at DeLux has more than 100 years of combined experience within spirits and whisky. There are so many technology companies out there solving problems. But what I’ve found is that if you have people with experience in certain sectors, that changes everything. The huge advantage we bring to the table is that we are passionate and loving when it comes to whisky and the wider luxury spirits industry. You can’t fake those years of experience.”

Other members of the DeLux team include chief operating officer Tagore Ramoutar who co-founded The Oxford Artisan Distillery (now Fielden) and is a founding director of the English Whisky Guilds and Vanessa Wright, a non-executive director and investor, who spent almost three decades in communications and sustainability with Pernod Ricard.

Fitch explained that DeLux has built a “beta product” that uses real data from whisky producers at a cask level, with individual bottle level set to be rolled out.

“We have lots of interest in the technology and we’re looking to work with more partners from some of the five Scotch whisky producing regions who can provide even more real data to advance our platform, and enhance product provenance and interactions with the final consumer,” Fitch said. “We’ll focus on the Scotch market where there is a lot happening right now, particularly with the UK-India trade deal and the impact it will have on exports.

“As well as our digital passport platform tackling counterfeits and protecting whisky, we hope it will also help producers resonate with consumers, especially the next generation.”

According to Fitch, the DeLux platform works by collecting and checking real time data across the process, from farmers to consumers, to compare what is there with what is supposed to be there - effectively that the product is in the right place at the right time. A digital product passport is developed from all the information gathered.

She added: “We offer an app where consumers can download their digital product passport for verification. This is really important if it’s a whisky that has substantial value in the market or on a personal level, for example as a gift.”

Fitch expects other luxury sectors, as well as whisky, to be interested in technology that allows products to be tracked.