The European Union Intellectual Property Office (EUIPO) released a new report showing that the zone is losing €60 billion annually due to counterfeit products. The loss in revenue is attributed to 13 economic sectors, with wine and spirits accounting for €2.7 billion in losses.
Fraud cost the United Kingdom €249 million alone in the wine and spirits sector.
The report found that there was a massive counterfeit problem in all sectors, including personal care, clothing, accessories, luggage, watches, handbags, games, toys, footwear, cosmetics, pesticides, tyres, batteries, smartphones and even music.
The study was carried out over a period of five years with an effort to determine the impact that counterfeiting has on the overall economy.
Counterfeiting is shown to impact economies across the world, with online retailers making counterfeiting more prevalent. A United States lawsuit from Grenco Science resulted in a $47 million award to the manufacturer of personal vaporizers. The vaporizers, often available at a trusted vape shop, were being sold by 65 different retailers that were selling counterfeit products online.
The court ruled that the sites must cease all sales of unauthorized products, and a monetary award of $47 million was in addition to the sites ceasing operations.
The EUIPO study suggests that the overall counterfeiting market is negatively impacting the EU economy, harming job creation, and shows a widescale abuse of intellectual property rights. The EUIPO’s Executive Director claims that the office’s work has been carried out in an effort to demonstrate the value of intellectual property.
Consumers were also found to pay more for certain counterfeit goods. Excess price paid for infringing products cost consumers €2.3 billion in 2014 alone. GI products, or Geographical Indications, which are protected intellectual property rights, have infringement rates that can vary from 0.1% to 12.7%.
GI products are often higher priced goods from a brand that consumers trust. Beer, for example, has a very low infringement rate because it can be difficult to duplicate. Infringers are often willing to defraud consumers and infringe on intellectual property rights holders.
The report finds that Italy and Germany suffer the greatest damage. Total jobs lost in the EU due to counterfeiting comes to 434,000. Fashion suffers the largest loss, with €23 billion, or roughly 8.1% of the total fashion industry’s sales, lost to counterfeit products.
Italy loses €8.6 billion annually due to counterfeit products. Germany loses 66,500 potential jobs due to the counterfeiting problem in the European Union.