Food Fraud

Wine and spirits one of top sectors affected by counterfeiting - EUIPO

By Joseph James Whitworth contact

- Last updated on GMT

Picture: iStock.
Picture: iStock.

Related tags: Intellectual property, Trademark, Wine, Counterfeit

Almost €2.8bn in sales is lost every year across Europe due to counterfeiting in the wine and spirits industry, according to EUIPO.

The European Union Intellectual Property Office (EUIPO) found wine and spirits was in the top five sectors for lost sales.

The organisation, which manages registration of the European Union trademark, has been tracking economic cost of counterfeiting in sectors known to be vulnerable to intellectual property right (IPR) infringements for the past five years.

It found direct annual losses of 13 sectors amount to €60bn, corresponding to 7.5% of their sales, due to fake products in the marketplace.

Because legitimate manufacturers produce less than they would in the absence of counterfeiting, so employ fewer workers, 434,000 jobs are also directly lost across the sectors.

Intellectual property value

António Campinos, EUIPO executive director, said: “Over the past five years, our reporting and research has given, for the first time, a comprehensive picture of the economic impact of counterfeiting and piracy on the EU economy and job creation, as well as intelligence on how intellectual property rights are infringed.

“Our work has been carried out so that policymakers and citizens can be in no doubt of the value of intellectual property and the damage that arises from its infringement.”

Counterfeit goods entering the EU come from places including Hong Kong and China, UAE, Turkey, Greece, Singapore, Afghanistan, Thailand, Morocco, Tunisia, Latvia, India and Togo.

EUIPO said abundant value, lenient sentences and high returns on investment are incentives for criminal gangs to engage in counterfeiting activities.

Business models adopted by counterfeiters make significant use of the internet to distribute products and different modes of transportation.

Counterfeiters use a range of practices to evade capture of goods, including a high volume of small packages opposed to bulk transportation and movement of non-labelled products over borders, with fake measures of authenticity attached at a later stage, prior to distribution.

Incentives for consumers to purchase counterfeit goods include lower prices, easy accessibility and a low degree of associated social stigma.

F&B counterfeiting

Examples of domestic counterfeiting include criminal gangs across the EU (Belgium, Czech Republic, Spain, Italy, Poland, Portugal and UK) involved in repackaging of cheap wine in expensive bottles.

EUIPO said customs officials are increasingly capturing shipments of empty bottles, presumably being used for counterfeit products, such as seized counterfeit champagne re-packed in Italy.

Geographical Indications (GIs) for wine, spirits, agricultural products and foodstuffs are protected IPR that act as certification that products possess qualities, characteristics or reputation attributable to their geographical origin and method of production.

In a 2016 study​, EUIPO estimated the consumer loss (excess price paid for infringing GI products) from GI infringement was €2.3bn in 2014, representing 4.8% of total GI product purchases in that year.

Infringement rates varied across GI products from 0.1% for beer to 12.7% for spirits.

Imports of counterfeit and pirated goods were worth US$461bn in 2013, or around 2.5% of global imports, according to a 2016 report by the Organisation for Economic Co-operation and Development (OECD) and EUIPO.

The report analysed nearly half a million customs seizures globally from 2011-13 and found trademarks were infringed on strawberries and bananas.

Related topics: Business, Beverage

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