Convergence.Tech, working with the Australian federal government has led a consortium to deliver the pilot that has been analysed by KPMG.
The platform also enables a Global and Domestic Trusted Distiller Program to be introduced that could lead to privileged trading benefits and a significant reduction in the excise tax administrative burden.
More than $582 million is lost annually in excise revenue and the industry agreed that significant change was required.
Burdened with administrative oversight, cash-flow impediments and fighting a market burdened with illicit activity, local producers were also wanting to be released from the current tax and production constraints.
Working with local producers within the Australian Distillers Association and Spirits & Cocktails Australia, Convergence.Tech created a groundbreaking real-time tracking system of spirit movement and tax obligation.
The solution provides full production and distribution transparency, driving significant gains in trust among all parties. This solution will liberate local producers from the at times burdensome nature of tax administration and with potential implementation of the Global and Domestic Trusted Distiller Program, could streamline the business processes of the entire spirits industry.
“Australian Craft distillers will benefit from their brands having greater protection from illicit competition through the scaled uptake of the blockchain. Australian spirit producers will embrace the technology because it will make their obligations easier and unlocks opportunity for even more significant improvements,” said Australian Distillers Association chief executive Paul McLeay.
Another significant benefit of the platform will open up a new commodities marketplace, changing the tax and compliance systems from simply being a recording system, to a potential revenue and capital generating partnership for both government and local producers. Something that could never have been achieved without this world-first use of blockchain technology.
ANZ’s Australian dollar stablecoin (A$DC) was used in the pilot, demonstrating the ability of the movement of the commodity to trigger the settlement and scheduling of excise obligations between distillers and the government.
ANZ banking services lead Nigel Dobson said the pilot offers an encouraging step towards more process automation, with real-time and cost-saving benefits to those involved.
