"Two years ago, we decided we would get involved in the baby formula industry," Rolston said. "To enter the Chinese market we need to protect ourselves."
Rolston said China's one-child policies created the "4-2-1 effect" where four grandparents often had just one grandchild between them and "a lot of money goes into looking after that child".
Creating a high-quality formula, only to find it being ripped off, was unbearable, Rolston said.
His company, Anticounterfeit, developed a 16-digit security code and tamper-proof security that let consumers check the integrity of their product on a website.
The firm developed numeric codes, combined with embedded fingerprints and other secret technology in a hologram on a label.
"If someone scratches off that number and goes to the manufacturer's website it will say: 'This product is genuine'."
Rolston and Mills are also working on a version for smartphones.
Infant formula exports are valued at about $1 billion a year to New Zealand.
A total of $600 million of that is exported to China. Anticounterfeit hopes to make the technology available to all major exporters.
Intellectual property consultant Murray Stott welcomed moves to give overseas consumers a means to verify the integrity of New Zealand products.
"It sounds heaven-sent."
Infant Nutrition Council chief executive Jan Carey said exporters were worried about authenticity as products moved from producers to shop shelves.
