Counterfeit trade US$250 billion a year

‘The counterfeit goods industry is so sophisticated that it is often impossible to distinguish between the real deal and the spurious pretender. It is also cunningly stratified to cater to different sizes of consumer pockets…This is a common occurrence in markets with poor governance structures, especially for goods of high value brands like Swiss watches’

Last month, the United Nations launched a global campaign to highlight the extent of the growing rampancy of trading in counterfeit goods and its irrevocable link with organised crime, thus posing great risks to the international community.

According to the world body’s estimates, the volume of trade in counterfeit goods amounts to a whopping US$250 billion a year, which is more than the combined GDP of dozens of nations put together. And these are only estimates. The real figure might be far bigger, going by the extent of such trade across a wide swathe of product categories and its geographical spread. To put this scenario as alarming is to put it rather mildly.

One might be forgiven if one assumed counterfeit and spurious goods is the domain of petty dealers in cheap, poor quality merchandise coming from countries with poor governance systems.

While that may well be a valid assumption, the counterfeit trade is by no means restricted to cheap goods and poorly governed nations. Trade in spurious goods ranges from sophisticated aircraft parts and high tech information and communication technology components to every conceivable consumer item including food, drink and even medication.

The general public perception is that spurious goods that bear fake labels of famous, time tested and quality assured brands that are instantly recognised and respected all across the world are basically a copyright and intellectual property issue.

People therefore take it lightly and are usually more than willing to buy near look-a-likes of famous brands for a price that is often a fraction of that of the branded item. This is particularly true of impulse purchase products like garments and fashion accessories.

The counterfeit goods industry is so sophisticated that it is often impossible to distinguish between the real deal and the spurious pretender. It is also cunningly stratified to cater to different sizes of consumer pockets.

For instance, copies of timepieces of famous brands are available in a range such as ‘near similar’, ‘almost similar’ and ‘plain copy’ of the original with different pricing levels—but all bearing the same copied brand name. This is a common occurrence in markets with poor governance structures, especially for goods of high value brands like Swiss watches.

Most tourists might well be content that they can bag a great deal when they travel to countries that are known for such grey markets. The big brand labels that they get to show off back home look pricey and might be status enhancing for the wearer—all at a bargain if not a rock bottom price.

Who cares if it’s not the real deal so long as it looks almost exactly like the real thing? And why pay more for the genuine article anyway—to feed the fat cat owners and their high maintenance lifestyles? Most consumers tend to rationalise their action in this way.

The moral and ethical aspects of supporting the counterfeit goods trade might depend on individual worldviews, value systems and social mores. Moreover, as we all discover sooner rather than later in our dealings in everyday life, even the so-called conscience is at a discount these days. So it is quite easy for people to look the other way and develop apathy to this aspect because after all, it saves money while doing the job.

But what most people do not realise is this: supporting the counterfeit industry is not only ethically and morally questionable, robbing private organisations and governments of valuable revenue but is positively dangerous to the world at large, including the users of such goods themselves. Robbing governments of duties and taxes means less revenue for governments to work with, resulting in poorer services and increased taxes on individuals.

Since most people who deal in spurious goods work below the official radar, they are irrevocably linked to criminal networks who cannot be brought to book should anything go wrong.

Supporting them is tantamount to actively supporting crime. Counterfeiting undoubtedly feeds money-laundering activities and encourages corruption. The United Nations’ report says there is also evidence of some involvement or overlap with drug trafficking and other serious crimes.

If even that is not a convincing argument for some to desist from supporting the spurious goods trade, consider this: The counterfeit trade extends far beyond innocuous goods like garments, watches, fashion accessories and household knickknacks.

It encompasses far more critical and sophisticated products. The United Nations lists vehicle tyres, brake pads and airbags, airplane parts, electrical consumer goods, baby formula and children’s toys as being routinely counterfeited around the world.

The food that you feed your baby, the vehicle you drive around your family in, the plane you travel for business and holidays, the electrical appliances in your home—all pose a grave risk to you and your dear ones if they have not followed standards laid down by industry authorities and safety departments of governments. When you support spurious goods by buying them, you are actually putting yourself and your family at tremendous risk.

But probably the worst risk is presented, especially in poorly resourced nations as those of the Pacific Islands region, by counterfeit medicines. By all counts, criminal activity in spurious medical trade and fraudulent medical consumables from East Asia and the Pacific to South-East Asia and Africa alone amounts to some US$5 billion a year, according to the United Nations.

“At the very least, fraudulent medicines have been found to contain no active ingredients, while at their worst they can contain unknown and potentially harmful chemicals,” says a United Nations Office of Drugs and Crime.

The list of fraudulent medicines ranges extensively from ordinary painkillers and allergy countering antihistamines, to ‘lifestyle’ medicines such as those taken for weight loss and sexual dysfunction, to life-saving medicines including those for the treatment of cancer and heart disease.

The most unfortunate part in this piece is that most poorly resourced countries have neither the mechanisms nor the trained and qualified human capacity to detect spurious medicines reaching their shores.

This coupled with poor governance measures, widespread corruption, poor consumer awareness and the lack of alternatives conspire to form a deadly cocktail that can put entire populations of small countries at risk of disease and death.

In the interest of one’s own safety and security, it is important to stop supporting the counterfeit trade at the individual level. Only such individual action can build into a collective action to pressurise governments into taking firm and effective steps towards curbing counterfeiting to any appreciable level to make a difference.


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