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Brands hit by $461bn of fake goods

News, 20 April 2016

PARIS: Counterfeit and pirated goods have been valued at nearly $500 trillion a year, or the equivalent of 2.5% of all global trade, according to a comprehensive study by the Organisation for Economic Co-operation and Development (OECD).

Working in partnership with the EU's Intellectual Property Office, the OECD analysed nearly 500,000 customs seizures around the world between 2011 and 2013 to conclude that fake goods sold across borders were worth $461bn in 2013.

American brands were the hardest hit by the worldwide trade in fake goods because they were the victims of 20% of all seizures following infringement of intellectual property rights.

Italy came next, accounting for 15% of knock-off product seizures, followed by France and Switzerland (12% each), Japan and Germany (8% each), and the UK (4%).

China was by a very wide margin the main source of counterfeit goods in 2013, with close to two-thirds (63.2%) of all seizures originating in the country.

However, the OECD pointed out that China's most innovative companies were also the victims of counterfeiters. Fake goods were also traced back to Turkey (3.3%), Singapore (1.9%), Thailand (1.6%), India (1.2%) and Morocco (0.6%).

Counterfeit products were found to have cropped up in everything from handbags and perfumes to machine parts and chemicals, although footwear was the most-copied item.

And in terms of delivery, the report said that postal parcels were the top method of shipping bogus goods. They accounted for 62% of seizures over 2011-13, reflecting the growing importance of online commerce in international trade.

The traffic went through complex routes via major trade hubs, such as Hong Kong and Singapore, and free trade zones like those in the United Arab Emirates.

Other transit points included countries with weak governance and widespread organised crime, such as Afghanistan and Syria.

"The findings of this new report contradict the image that counterfeiters only hurt big companies and luxury goods manufacturers," said Doug Frantz, deputy secretary-general at the OECD. "They take advantage of our trust in trademarks and brand names to undermine economies and endanger lives."

Data sourced from OECD; additional content by Warc staff