EU IP agency states 3.5 billion euros lost on counterfeit goods

The manufacturing of counterfeit handbags, luggage, jewellery and watches costs European businesses 3.5 billion euros each year, according to new research from the Office for Harmonisation in the Internal Market (OHIM), the EU’s largest intellectual property agency.

The report reveals that 12.7 percent of sales of handbags and luggage, and 13.5 percent of sales of jewellery and watches in the EU are lost due to counterfeiting. In the UK, the research reveals that the handbag and luggage manufacturing sector loses 149 million pounds annually as a result of counterfeit products in the marketplace, which is nearly 12 percent of all sales in this sector.

Those lost sales translate into 27,000 jobs directly lost across the two sectors, as legitimate manufacturers employ fewer people than they would have done in the absence of counterfeiting the Office for Harmonisation in the Internal Market states.

In addition, the total yearly loss of government revenue as a result of counterfeit products in these sectors across the EU in terms of household income taxes, social security contributions, corporate income taxes and VAT can be estimated at 1.1 billion euros.

UK handbag industry loses 149 million pounds annual to counterfeit goods

The president of OHIM, António Campinos, said: “The jewellery and watches sector and the handbags and luggage sector in the EU are overwhelmingly made up of micro-enterprises, which employ fewer than ten people. The average number of employees per enterprise in the jewellery and watches sector is just three people. Such businesses are particularly vulnerable to the economic effects of counterfeiting.”

More than half of the EU's total manufacture of handbags and luggage takes place in Italy, where the sector was worth 6.5 billion euros in 2012. Italy also accounts for 40 percent of the EU's exports and 35 percent of the sector's total EU employment. The handbags and luggage manufacturing sector in Italy loses 520 million euros every year as a result of counterfeiting, one-third of total lost sales in the EU.

Image: OHIM