Almost €16 billion lost to counterfeiters between 2018-2021 within EU clothing, cosmetic and toy sectors

30 January 2024

Counterfeits continue to plague both international and domestic markets, costing consumers and companies billions of euros every year. This also result in the potential loss of hundreds and thousands of jobs, whether through redundancy or through reduced investment and its impact on unrealised growth.

A previous study by the EUIPO focused on the economic impact across twelve sectors but recent information has led to an update within the clothing, cosmetic and toy sectors from 2018 to 2021. It is worth noting that this period covers a majority of the pandemic, which saw a significant rise in the online sales of both legitimate and counterfeit goods. The resulting information has led to the publication of a new report this month, which outlines some of the economic dangers facing these sectors from counterfeit goods.

The most significantly impacted industry is clothing, which makes up almost €12 billion of the figure quoted, representing approximately 5.2% of the clothes sold within the EU. Cosmetics accounts for around €3 billion, or 4.8%, but according to a UKIPO study it is often the most hazardous as a result of unsanitary or toxic ingredients. Toy sales, although representing the smallest financial impact of the three arguably suffers the most as the €1 billion lost to counterfeits accounts for approximately 8.7% of total sales.

A joint OECD / EUIPO report from 2021 suggested that 2.5% of world trade in 2019 was for pirated or counterfeit goods, with fake goods estimated to have made up 5.8`% of EU imports, amounting to around €119 billion. The same UKIPO study mentioned above quoted the UN Commission on Crime Prevention and Criminal Justice in stating that counterfeiting is the second largest criminal source of income worldwide, and that risk is not limited solely to its economic impact. Dangers to consumers are also likely, often resulting from cheap, unsafe and even toxic materials and manufacturing methods.

Once lost, a reputation takes a lot of time and effort to rebuild, so what options are available to protect your brand and your customers from the harm caused by counterfeit goods?

Online marketplace monitoring is often a good place to start. With so much sold online these days, consumers will often come across counterfeit or pirated good on the internet. An effective monitoring strategy across major marketplaces will help you to identify and remove fake goods before they can be found by potential customers. It can also be a good idea to work with customs and border agents, and assisting them in understanding what a counterfeit product would look like will encourage the seizure and destruction of any fake goods identified.

On your own website, encourage trust in your brand by ensuring all company details are clearly visible, including name, address, terms and conditions. Also consider Domain and SSL monitoring, which can help to identify if a similar or mistyped domain to yours has been registered by a third party, as these might be precursors to phishing attacks or other plans to mislead consumers.

Physically, there are a range of product authentication and traceability options available that can help you to reassure consumers of the authenticity and provenance of your brand, and help you to track your products as they move through your supply chains and into the marketplace.

For more complex counterfeiting supply chains, it is often possible to pull together network intelligence from multiple sources and identify counterfeit hotspots, untapped markets and even the physical locations where fake goods may be manufactured or stored.

If you’re interested in learning more about what you can do to protect your brand both online and offline, just reach out. We have the technical expertise and experience to help you develop a comprehensive anti-counterfeiting solution and strategy. As part of the OpSec Group, we are experts in brand protection solutions, both in the digital and physical space, and we have a range of tools that will assist in preventing counterfeits from reaching your customers or damaging your brand.

For more information, reach out to Niclas Jonsson or Renaud Permezel (Digital Brands) or Thomas Mølsgaard, Lars Henrik Stoud Platou or Anders Sparlund (Trademarks).

You can find the full EUIPO updated report here.