Author Mark Richards

…It might still be worth buying. With Christmas becoming increasingly expensive it is no wonder that people are tempted by counterfeit goods selling for a fraction of the price of the real thing. How big is the worldwide trade in fakes and rip-offs? And what are the most counterfeited items?

By any standards, this has been a tough year. With wages failing to keep pace with inflation many people will be feeling the pinch over Christmas. But presents have to be bought…

So it is small wonder that an increasing number of people are turning to counterfeit products: after all, you can buy a ‘Prada handbag’ or a ‘Rolex’ for a fraction of the price of the real thing. The correct approach, of course, is to remember what your granny told you: ‘if it seems too good to be true, it is too good to be true.’ The bloke in the pub is not an ‘advance tester’ for Yves St. Laurent, secretly getting consumer opinion on the latest perfume, any more than the guy who e-mailed you yesterday senior general in the Nigerian army who had $5m he needed to share with you.

Nevertheless, there are plenty of shoppers who are either gullible enough to be taken in – or who will happily turn a blind eye to what they see a ‘little sharp practice that doesn’t harm anyone – and the big boys can afford it anyway…’

How big is the counterfeit goods industry?

Not surprisingly, it is difficult to say: if your factory is producing fake Rolexes, it is unlikely to be keeping accurate records for the local taxman. But let us do our best…

According to a report from the Organisation for Economic Development and Co-operation, the trade in counterfeit goods was worth $461bn (£350bn) in 2013, accounting for 2.5% of world trade (up from an estimated 1.9% in 2008). How much is that? It is equivalent to an economy the size of Austria.

But that may well be an underestimate. It is almost certainly in the interests of national governments to downplay the value of the ‘counterfeit economy:’ it makes it much easier to avoid awkward questions like, ‘What are you doing about it?’

The total value of the world economy was put at $78tn in 2014. If we said that the true figure for counterfeit goods was not 2.5% but 3%, that would suggest a figure closer to $2.5tn – making the trade in counterfeit goods roughly equivalent to the economy of Italy, the 9th largest economy in the world.

In comparison, recent estimates put the worldwide drugs trade at $500bn – possibly around a fifth of the trade in counterfeit goods.

So what are the most counterfeited items?

Asked to make a guess, most people would probably go for watches – and yes, there they are at number two in the list, with copies of Rolex, Omega, Tissot, Hublot and Swatch rolling off the fake production lines. A real Rolex can cost £70,000 (apparently: it is not on my Christmas list this year) while you can buy a fake Rolex – with sophisticated branding – for £25 from a street dealer.

By Nichtvermittelbar (Own work) [CC BY-SA 3.0], via Wikimedia CommonsBut the most copied items? Handbags, purses and wallets. You will not be surprised to learn that I know very little about handbags – and I have just been shaken to the core by a visit to the Prada online store. Prada is joined by Hermes, Givenchy and Versace on the counterfeiters’ list of favourite brands and given the prices it is easy to understand why. The logos may be slightly different but the style, design and colours will match the originals – and at £40 compared to £4,000 for many people it is a risk worth taking.

Other products making the top 10 on the counterfeiters’ list include shoes, sunglasses, phones and, of course, movies. Which of us has not watched a film before it was on at the cinema? More worryingly, at number 7 on the list is counterfeit drugs and medicines – a real area of concern for the World Health Organisation, who reported in 2009 on a series of raids in Egypt which resulted in the seizure of 34m pills that had been destined for people throughout the Middle East and Europe. The EU industry commissioner described the haul as “beyond our worst fears” and you have to assume that the problem has only worsened over the last eight years.

But with the price of medication being too high for many people in developing countries, it is easy to understand the attraction of cheaper, apparently genuine, medicine and drugs. Sadly, the results of buying the counterfeit products can all too often be tragic.

Health and Safety to the rescue

Those tragic consequences are the reason why counterfeit goods are not ‘just a little sharp practice that doesn’t harm anyone.’ If your factory is producing fake Rolexes or fake pharmaceuticals, then not only are you not going to keep accurate records for the taxman, you are also unlikely to be paying too much attention to health and safety legislation – either for the end user or the people working in your factory.

That is why the Intellectual Property Office in the UK has now taken to YouTube to highlight the dangers of counterfeit goods: having watched it I certainly will not be buying my wife any jewellery in the pub…

As Ros Lynch, director of copyright and enforcement at the IPO put it,

“The goods are very often of inferior quality and dangerous – and the proceeds are often used to fund other organised crime. Counterfeiters have a total disregard for both safety and quality.”

The IPO is now working with the UK’s Border Force to combat counterfeit goods, and they have achieved some conspicuous successes. Counterfeit items seized in recent weeks include 1,400 Superdry hoodies worth over £100,000, 16,000 Gillette Mach 3 razor blades, 450 Dyson fans and 379 Barcelona and Borussia Dortmund football shirts. As one customs official put it,

“The simple fact is that counterfeiters will copy anything.”

However, their biggest success was in stopping a planned shipment of counterfeit Calvin Klein underpants. In total 82,320 pairs of pants were seized with a total value of approximately £1.5m. “It was a successful operation,” said a spokesman for Her Majesty’s Border Force. “It ticked all the boxers…”