Sales of counterfeit goods surge

Posted by Arron Dickens in Credit Crunch on 8 October 2013 - Arron is a Product Manager at checkmyfile

Shoppers in the UK are admitting to regularly purchasing ‘knock-off’ versions of popular products, in an industry now worth an estimated £500bn globally each year.

Traditionally fake products have been bought and sold in car boot sales, markets and by the bloke in the pub, but nowadays auction sites such as eBay are the prime marketplace for illicit sales.

It ‘s a big problem for the online store, as it is under huge pressure to crack down on piracy by the legitimate brand owners who are losing sales of ‘kosher’ products.

A report by accountancy firm PwC shows that 18% of the general public frequently purchase items which are suspected to be counterfeit. The main purchases include; designer clothing, bags, perfume and alcohol – something which has the potential to cause health problems and even death, due to toxic substances used in their manufacture.

Astonishingly 16% of adults have bought counterfeit medicines, which at their best are useless, and at worst could kill. Unsurprisingly the top selling of these kinds of products are Viagra rip-offs, probably due to some reluctance to visit a GP to discuss the symptoms.

Professor Paul Wallace of Drinkaware says that commonly used ingredients in fake spirits "include cleaning fluids, nail polish remover and automobile screen wash, as well as isopropanol, which is used in anti-freeze". Sounds like a cocktail I would rather not drink.

Drinkaware has issued guidance on the dangers involved to the many thousands of students who have just begun their studies. Also councils are gearing up for a massive trading standards crackdown over the seasonal period, to urge consumers not to purchase counterfeit alcohol.

Whilst clothing and branded ‘gear’ is not likely to cause medical emergencies, it is still a big problem for the wider economy and can affect productivity and jobs in legitimate markets. Two weeks ago market stalls in Warwickshire were raided and nearly £3m worth of goods were seized and four arrests made.

Mark James of PwC says, "Counterfeits have an obvious impact on profit and jobs, yet people increasingly see access to fakes as a normal, consumer choice. Companies invest significant amounts of time, money and effort in developing their products. Manufacturers and buyers of counterfeit goods strike right at the heart of that. Ultimately, companies are seeing their brand, reputation and revenues stolen."

Arron Dickens is a Credit Analyst at checkmyfile and has a Bachelor of Arts degree in Business Administration and is an Associate of the Institute of Credit Management. He can be contacted at arron.dickens@checkmyfile.com.

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