EC study cracks down on counterfeit products

In an effort to raise awareness among consumers about counterfeit products, the European Commission has published the report “Too good to be true: The real price of fake products” that looks at the dangers of buying fakes.

The annual global trade volume of fake goods stands at a staggering 200 billion euro – on par with the market for illegal drugs. And the fake goods trade volume is growing - from 2010 to 2011, the amount of counterfeit articles detained by European customs increased by 11 percent. In actual numbers, that’s 115 million fake goods with an overall value of over 1.2 billion euro, detained at EU borders in 2011 alone. Of those detained goods, 54 percent are fashion and high-end personal products. Reason enough for the apparel industry to take note.

Apart from ethical reasons – after all, it is an illegal business with close ties to organised crime – the report lists four other good reasons why buying fakes is a lose-lose situation for consumers. First of all, counterfeit goods pose a serious health and safety risk. In fact, almost one third of all articles detained by EU customs in 2011 were found to be potentially dangerous to the health and safety of consumers.

The dangers may be immediately apparent for articles like electronic goods, medicines, car parts and the like but even counterfeit apparel items, accessories, shoes and sporting goods can pose a serious danger to the wearer’s health and safety. For example, substandard or flammable materials, small or badly attached parts such as buttons, laces and trims can come apart and pose a choking or strangling hazard. Counterfeit products are not painstakingly tested to avoid such risks but simply copied without any of these considerations; counterfeit childrenswear and toys especially pose a great risk.

Counterfeit garments pose a great health risk

“Chemicals used in textiles, clothing and footwear in Europe are thoroughly analysed and are prohibited if they are found to be harmful. A comprehensive piece of legislation called REACH insists that all chemicals in the European Union are tested. That is why garments legally sold in Europe very rarely cause allergies and irritations. But fake items can contain chemicals that haven’t been tested. They can harm your health,” warns the study.

But that’s not all. The report’s next point is quality. What looks like a bargain at first glance is expensive in the long run as it doesn’t last as long as the real thing and in regards to clothes may shrink, stink and even discolour other clothes in the wash. Economically, fake goods don’t only compete unfairly with genuine products, they also damage legitimate businesses, put many jobs at risk and starve innovation.

As the reactions by brands and retailers worldwide in regards to recent accidents in garment factories in Pakistan, Bangladesh and Cambodia have shown, there is something they can do to protect workers’ rights even beyond EU borders. These companies have a reputation to lose, a brand name that has taken them years, if not decades to build. Manufacturers and dealers of fake goods don’t and from being illegal operations to employing children and mistreating workers is just a small step.

As to what gets copied, no brand is really safe but the more successful and well known it is, the higher the risk of attracting copy cats. In 2009, the value of the top ten brands in EU countries amounted to almost 9 percent of the GDP. Last but not least, the report points to the taxpayer’s burden that counterfeiting businesses pose. After all, illegal operators and traders evade taxes, thus forcing regular taxpayers to make up for the loss.

Image: “Too good to be true”