Phillip Morris Eyes Blockchain Efficiencies, Citing Tax Fraud


In speaking to reporters this morning, spokespersons at international tobacco giant Philip Morris are talking blockchain.

What tech reporters are uncovering today is that Phillip Moris and other tobacco sellers are considering using the blockchain technology to their advantage in a long-standing battle with cigarette traffickers.

Here’s how it works – individuals can take untaxed cigarettes and transport them from one state or country to another, and make quite a bit of profit. Because cigarettes are not vulnerable to law enforcement in the same way as narcotics or various heavily restricted substances, this has become a major type of lucrative crime, especially in areas like the mid-Atlantic.

You can view videos like this one on NBC to see how police officers and others work on tackling the enormous problem of cigarette trafficking.

Now, Nitin Manoharan, Phillip Morris global head of architecture and tech innovation, estimates that the firm could save $20 million by using blockchain to replace traditional tracking system for cigarette taxation.’

“The aspiration is an industry-wide blockchain that interested stakeholders can come in and subscribe to it and benefit from it. If they see no value they can just leave.” Manoharan said, according to Ian Allison at Coindesk.

As Helen Partz mentions in Cointelegraph coverage of Manoharan’s remarks, this is only part of a greater move to use blockchain along with other technologies like the Internet of things to transform supply chains and optimize delivery.

The Philip Morris pipeline is essentially a complicated supply chain and delivery system – sourcing tobacco and other materials and delivering cartons, which then get sold as packs and ultimately deliver that nicotine rush to end user consumers.

It’s an interesting use case, and a good test case for how blockchain can aid in this multi-step process. Essentially, it’s one of the last black markets in America, and even though some claim that cryptocurrencies and blockchain technology can be used to practice fraud and crime, this example shows that these technologies can also be used by white hats to crack down on criminal activity that takes advantage of ambiguous systems

Factor the tobacco giant’s quest into your overall cryptocurrency and blockchain portfolio. By finding secondary firms that will profit from blockchain adoption, you could end up seeing a pretty big wave as institutional buying continues.