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It’s the world’s fastest growing and most profitable industry and it’s reaching epidemic proportions, estimated to be between 7% and 10% of the world’s total trade. And the

counterfeiting industry is growing at just as fast a pace in South Africa.

Partner at Adams & Adams Attorneys, Mariette du Plessis, says counterfeiting is a relatively new problem in South Africa, most likely because of our previous political isolation and the fact that 20 years ago luxury goods, which were predominantly what the counterfeiters copied, were viewed as being only available to wealthy people who could afford to travel. Post apartheid, many famous international brands have become available in the country, making the consumer more brand-conscious. In addition, our borders became more porous and trade relations were established, opening the doors to foreign traders selling cheap imitations.

Most of these cheap imitations come from China, explains Du Plessis. This is because all the major international corporations have factories there that produce genuine goods, and brand protection is a relatively new concept in China. Add to this the fact that accessibility to famous brands has become easier, thanks to digital technology and the global village that is the Internet, and it’s no wonder that virtually every consumer product category in the world is affected – with the quality of counterfeit products improving all the time, and counterfeiting no longer restricted to the luxury goods market.

It’s also no longer exclusive to clothing and accessories, but has grown to include high-tech products, every day essentials, parts for cars and planes, pirated music, software and films and even pharmaceutical products. Worldwide, the counterfeit products that are perceived to be valuable and attractive to consumers fall in every category and include most famous brands. The more popular the brand, the higher the risk of counterfeit products being produced, explains Du Plessis.

With the prevalence of such a wide array of counterfeit goods, it is estimated that the counterfeiting industry in South Africa alone is worth R3.62-billion – although, because it is a clandestine trade, Du Plessis points out that it could be more. This is especially because customs only inspects between 5% and 10% of containers

coming into the country, meaning that only a small proportion of counterfeit goods are seized or even known about.

But looking beyond the figures, it is the impact the counterfeiting industry has on brand owners and, subsequently, their employees that hits home. While one might argue that luxury brands don’t feel the effect of counterfeiting because they’re so wealthy as it is, figures such as 70% of the footwear industry in Mexico closing down as a result of the influx of fake products – and the subsequent loss of 480 000 jobs – shows the real effect of this illegal trade. And the same could happen in South Africa, notes Du Plessis. At an even more real level for consumers is the fact that counterfeiters don’t pay income tax, while the counterfeit industry is also linked to organised crime, including drug trafficking and terrorism, as a means to finance these practices, not to mention that counterfeit products are often manufactured in sweat shops.

Despite this, it’s no real surprise that the illegal industry is growing so fast. Counterfeiters don’t have to spend money on researching and developing products, or on advertising and promoting these products, nor do they provide guarantees or after-sales service. “For counterfeiters, stealing brands has resulted in a very profitable business,” says Du Plessis. It doesn’t hurt that consumers are willing to purchase these products, which Du Plessis feels stems from a lack of knowledge on the consumers’ part

The ‘FAKE’ epidemic

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