Too often when the discussion of counterfeit goods comes up, there is an emphasis on topics such as intellectual property rights and the profits lost by major corporations. Recent events, however, suggest that the real issue at hand is the safety of consumers.
Fake pharmaceuticals, toothpaste, infant formula, extension cords and batteries are just a few of the products that have made their way into unsuspecting consumers' homes with deadly consequences.
A recent article in The Toronto Star discussed the experience of a senior Royal Canadian Mounted Police official who was given a pack of counterfeit batteries by a subordinate to illustrate the types of goods coming into the country, in this case, from China. A few months after receiving them, the batteries exploded inside the RCMP official's desk. The sound was compared to that made when a gun goes off.
RCMP Superintendent Ken Hansen, who gave the batteries to the official, told The Star, "It was quite an explosion. If you were holding it in your hand you probably would have lost some fingers."
The increase in fake goods hitting markets in North America has been staggering and low budgets and a lack of personnel have made it nearly impossible to keep these potentially dangerous items out of the hands of consumers.
Many items, such as fake pharmaceuticals, are primarily sold directly to consumers over the internet but in some cases, counterfeit prescriptions are mixed in with the real thing. In at least one case, counterfeiters attempted to get the most bang for their smuggling buck by loading counterfeit Louis Vuitton bags with fake medicine. According to an estimate by the World Health Organization, 10 percent of all pharmaceuticals sold globally are counterfeits.
In May, the Food and Drug Administration issued a press release that said it had identified three occasions when consumers had purchased counterfeit versions of the weight loss drug Xenical. Testing showed that none of the products contained orlistat, the active ingredient in Xenical. Some of the samples tested contained talc and starch as ingredients.
Consumer product manufacturers are working with the governments of various countries around the world to deal with the explosion of fake goods making their way to the consumer market.
While China has been the focus of many international counterfeit fighting actions, and certainly many recent news reports, it is far from being the only country with criminals seeking to make a buck on a legitimate brand's reputation. Earlier this month, Unilever signed a deal with the Algerian customs director general to share information and step up efforts to prosecute counterfeiters.
Discussion Questions: How big a problem, in terms of lost sales and profits, have counterfeit goods become for law-abiding retailers? What has been the impact on manufacturers? What should retailers and suppliers be doing to combat counterfeiting?
- Dangerous fake goods crossing border - The Toronto Star
- FDA Warns Consumers about Counterfeit Drugs from Multiple Internet Sellers - U.S. Food and Drug Administration (FDA)
- Discount Counterfeits Can Be Dangerous - The Associated Press/Forbes.com
- Algeria signs agreement with Unilever in battle against counterfeit good - AFX News Limited/Forbes.com