EU economy loses €35bn a year due to counterfeiting

By Jenny Eagle

- Last updated on GMT

 Picture credit: ACIST - the European Union database that gathers statistics on detentions of articles that are suspected of infringing intellectual property at borders and in the internal markets.
Picture credit: ACIST - the European Union database that gathers statistics on detentions of articles that are suspected of infringing intellectual property at borders and in the internal markets.

Related tags Counterfeit European union

Counterfeiting is predicted to increase 3% per year worldwide leading to a rise in the anti-counterfeiting market over the next five years with CAGRs ranging from 12.8% to 16%, says PMMI (Association for Packaging and Processing Technologies).

Its report, ‘2016 Brand Protection and Product Traceability Market Research’ found the growth of the global anti-counterfeiting market will outpace the overall combined market segment growth of food, beverage and pharmaceutical industries by approximately two to three times in the next five years.

Knock-on effects

At the same time, the European Union Intellectual Property Office (EUIPO) has carried out a series of studies on behalf of the European Observatory on Infringements of Intellectual Property Rights which claims over €48bn or 7.4 % of all sales is lost every year in nine sectors, due to the presence of fake goods in the marketplace.

The nine sectors are cosmetics and personal care; clothing; footwear and accessories; sports goods; toys and games; jewellery and watches; handbags; recorded music; spirits and wine and pharmaceuticals.

It found, every year, an additional €35bn is lost across the EU economy due to the indirect effects of counterfeiting and piracy in these sectors, as manufacturers buy fewer goods and services from suppliers, causing knock-on effects in other areas.

With the festive season approaching, millions of shoppers across the EU are buying Christmas presents for family and friends. But, the negative economic effect of counterfeit and pirated goods lasts all year round​,” a EUIPO spokesman said.

€83bn and 790,000 jobs are lost every year across the EU due to counterfeiting and piracy. Government revenue lost as a result of counterfeiting and piracy is estimated at €14.3bn​.”

International Hologram Manufacturers Association

Dr Mark Deakes, general secretary, The International Hologram Manufacturers​ Association (IHMA) told BeverageDaily, the PMMI report is a sobering reminder that the war on counterfeiting remains far from won and is further wake-up call for those who protect brands and profits.

Brand owners and those authorities responsible for legislation are sure to be alarmed at this report, so they need to act if the tidal wave of counterfeit goods flooding onto the market is ever to be checked, let alone stopped​,” he said.

More needs to be done, and quickly, to begin to deal with the problem and this might include increased integration of holograms as part of brand protection strategies​.”

However, the report also indicates increasing global opportunity for anti-counterfeiting technologies.

Increasing adoption of holography in places like India and east Europe reinforces the hologram’s position as a pre-eminent security feature in the global anti-counterfeiting fight​,” he added.

The use of well-designed and properly deployed authentication goods, as advocated in ISO’s 12931 standard, on authentication solutions, enables examiners to verify the authenticity of a legitimate product, differentiating it from fakes emanating from counterfeiting hot spots such as China​.”

Even those that carry a ‘fake’ authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution​.”

'Continuously growing supply chain'

Paula Feldman, director, Business Intelligence, PMMI, said globalization is creating an increasingly complex, continuously growing supply chain.

With more suppliers and products coming from different countries, it is critical to identify, capture and share accurate product information. In this environment, counterfeiting has become a growing challenge​,” she said.

With North America alone accounting for 50% of the total growth of the global anti-counterfeit food packaging market in 2014, it is increasingly important that we as an industry continue to take the necessary action to protect our brands, as well as those around the globe​.”

PMMI compiled the 2016 Brand Protection and Product Traceability Market Research report thanks to 75 brand manufacturers, industry experts and technology suppliers who shared their experiences complying with traceability regulations in the food, beverage and pharmaceutical industries.

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