A group of luxury brand makers including Gucci, Balenciaga, Yves St. Laurent, and other brands owned by Paris-based Kering SA, recently sued on-line retail giant Alibaba, claiming that the company had knowingly made it possible for counterfeiters to sell their wares throughout the world. Why should we care about counterfeit goods? Those luxury brand companies have so much money, they’re not really hurting. If you can score genuine looking merchandise for a cheaper price, you’re just a savvy shopper, you’re not really hurting anyone, right? WRONG.
Here’s why: The impact of counterfeits spans a very broad scope, much farther than the average American consumer is likely to know. In fact, if you stop for a moment to really think about it, any item that is consumable can be counterfeited. It’s not just about purses, DVDs, and sports team merchandise. Counterfeiting encompasses cosmetics, body care products like shampoo, conditioner, soap and toothpaste, perfume, clothing, footwear, purses, luggage, auto parts, food and beverage items, medicine and baby formula.
There’s so much more to counterfeiting than just the end product itself. Think about who makes the counterfeit product, how the diversion of funds impacts the global economy, where the profits end up. And on top of all of this, there’s the very real risk of purchasing a fake product. For example, medicine that’s not as potent as the label would have you think, phony auto parts like brake pads and windshield wipers, jewelry falsely labeled as sterling silver for those with allergies, children’s sleepwear that doesn’t meet flammability requirements, even tainted baby formula.
If you still don’t think buying a fake really makes a difference, consider the following facts[1]:
- Counterfeiting kills 2.5 million jobs per year
- Counterfeiting has been linked to organized crime and even terrorism
- Child labor is sometimes utilized in the production of counterfeit goods
- Counterfeiters have resorted to human trafficking
- In the global automotive industry alone, the purchase of counterfeit products has resulted in $12 billion in lost sales
- In 2011, the top categories of products impacting health and safety seized by U.S. Customs & Border Patrol were: pharmaceuticals, electronics, perfume/cologne, cigarettes, and personal care products
- Counterfeiters have become so sophisticated that they are fooling consumers into paying much higher prices for fakes than in the past
- The World Health Organization has stated that up to 10% of the world’s medicines are fake
- Counterfeit and pirated goods impact on the economy is worth about $650 billion a year
When all is said and done, counterfeiting not only negatively impacts the profit margin of legitimate businesses, it is a significant threat to the global economy, as well as the public’s health and safety. It hardly justifies saving a few bucks, now does it?
[1] See, http://www.inta.org/Advocacy/Pages/UnrealCampaign.aspx, See also, International Anti-counterfeiting Coalition (“IACC”) white paper here: http://www.iacc.org/advocacy-and-policy.html, entitled The Negative Consequences Of International Intellectual Property Theft: Economic Harm, Threats To The Public Health And Safety, And Links To Organized Crime And Terrorist Organizations, January 2005.
