Brands to tackle counterfeiting

The illicit trade in counterfeit goods is helping fund organised crime such as prostitution and terrorism and costing Gulf governments and businesses tens of millions of dollars a year, according to the region’s brand owners.

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By  Tim Addington Published  June 4, 2006

The illicit trade in counterfeit goods is helping fund organised crime such as prostitution and terrorism and costing Gulf governments and businesses tens of millions of dollars a year, according to the region’s brand owners. In a bid to tackle the growing problem of counterfeiting, some of the world’s biggest names, including BMW, Johnson & Johnson, British American Tobacco and Nestlè have joined forces to launch the Brand Owners Protection Group for the GCC and Yemen. The group aims to raise awareness about the extent of counterfeiting, educate consumers and secure greater cooperation with government authorities to help reduce the trade in the region. FMCG giant Unilever, which includes brands such as Dove and Lipton, claims that this year alone it has seized and destroyed US$6.7 million worth of counterfeit and illicit products in the GCC, of which US$1.6 million has been in the UAE. The company says that in the past five years US$70 million worth of goods has been seized. Beiersdorf, makers of the Nivea products, estimates that the illegal use of its brand names costs it between US$10 and US$15 million a year, and it spends more than US$700,000 a year on investigating it. Omar Shteiwi, regional intellectual property advisor at Nestlè, and chairman of the BPG said: “Counterfeiting is challenging the manufacturing industry every day, attacking the intellectual property rights of the brand owners and putting the health of our consumers under real risk and causing losses. These market leaders are alarmed at the economic, social and moral impact that illicit trade has on consumers, governments and legitimate businesses. The BPG has been founded in order to suggest and recommend effective measure to counter this social menace.” China accounts for 90% of all counterfeit goods that come into the region. The extent of the problem and its cost to business is not known and one of the group’s first objectives is to launch an economic impact study into the trade of counterfeit goods. Robert Taylor-Hughes, general manager at Beiersdorf Middle East, which is a member of the BPG, said the people behind counterfeiting were professional criminals. “Counterfeiting generally is organised crime. At the top of any organised crime team you find extortion, prostitution and terrorism. They all merge together at some point. It is not just a guy in the back yard filling bottles, it is much more organsised than that.” Nick Hart, brand protection director, Africa and Asia Business Group at Unilever, which is also a member of BPG, said: “There is a perception in the Middle East that counterfeiting only impacts on luxury goods. They don’t see that it is also extensive in toothpaste and car parts for example.” The BPG is a not-for-profit organisation, which is being funded by a US$10,000 annual fee from its voting members, and it has appointed a full-time coordinator. As well as the economic study, the group is planning to mount an advertising campaign to raise awareness amongst consumers as well as start training customs officers on how to identify counterfeit goods.

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