Eric Pasquier

The perception that buying a counterfeit product is a crime without a real victim is the same one that has allowed organized crime to use it as a convenient way to clean dirty money and add to profit-making enterprises. When you’re on holiday, however, it’s nicer to think that your 50 baht might feed the shop owners’ children for another day.

 

What’s in a name?

A Louis Vuitton handbag can set you back US$520 when you buy it from an authorised dealer, but in Thailand, you might pay around $47 for a very good copy, or just $4 for a bad one. The ironic bit is that part of the reason so many of those four-dollar bags sell is that the designers do such a good job marketing their products.

 

It’s called brand identification. Top designers imbue their ads with images of beauty, youth and celebrity. Even shy types who don’t want to be celebrities yearn for enduring looks when youth takes its leave. Still, if you aren’t young or beautiful, you can nevertheless carry the same handbag as [insert your favourite star’s name here]. This marketing plan would be a thing of beauty if everyone had the bank account of a movie star. However, if the consumer can find the same bag—or a convincing copy—the illusion can be sustained. If you think you’re immune to this mass-marketing technique, go have a look in your own closet.

 

Some designers have become so successful that the copycats out-perform even the original item. In the early 1990s, Scottish clothing company Pringles blamed Asian counterfeiters after they went belly up, and France’s Lacoste, which makes shirts with little alligator logos on them, has battled counterfeiters for years without much success.

 

Big design houses do become involved in lobbying governments to crack down on piracy and counterfeit goods, but success has been limited due to the international nature of the problem. Most western countries already have laws establishing intellectual property rights, which is the area of law covering everything from computer software to fake bags. Going after distributors in other countries is usually difficult and expensive: sometimes products are sold by everyone from large companies on down to individual sellers in a market. The big counterfeiters have developed complex networks of distribution to conceal the true identity of responsible parties, or don’t need to if the products aren’t sold as authentic.

 

LVMH, the owner of Louis Vuitton, Christian Dior, and Veuve Cliquot among others, takes counterfeiting very seriously though and is one of the most vigilant and successful fighters of it. The company employs a full-time staff of 20 at varying levels of responsibility, whose job it is to fight counterfeiting in conjunction with a network of specialized investigators and lawyers. The group’s actions have resulted in the seizure and destruction of counterfeit perfume, champagne and other products.

 

Victimizer or victim?

Buying counterfeit goods is considered by most consumers to be a pretty soft crime, but the Counterfeit Intelligence Bureau of the International Chamber of Commerce cautions that organized crime is heavily involved in the business of counterfeit products. It contends that counterfeiting is a low-risk, high-profit business for the organizations because punishments meted out by the courts are light or non-existent. In the UK—said to be the counterfeit capital of Europe—it is estimated that 25 percent of criminal organizations are involved in counterfeiting.

 

The concern by the Counterfeit Intelligence Bureau and others is that there is growing evidence to suggest that some of these criminal organizations are using profits from counterfeiting to subsidize terrorist activities, but this is just so much smoke, for the moment. There’s been no clear link made to-date.

 

Counterfeiting also robs governments of revenue and taxes and creates job losses in the manufacturing sector. But fake handbags don’t make themselves. In early 2002, the Christian Science Monitor reported that piracy in China directly or indirectly employs from three million to five million people and generates $40 million to $80 million annually. Throw all those people out of work and you will only add to the already growing unemployment problem in China. Knowing this makes it easier to understand why many poor countries hesitate to crack down on counterfeiters; these governments know they cannot afford to support everyone involved in piracy and counterfeiting, so they give the issue superficial attention in the media and look the other way on the street.

 

She’s gotta have it

Like the American War on Drugs—a US$500 billion a year business—the primary means used to stop counterfeiting is to try and stem the demand for the product. Of course, people don’t become addicted to designer labels like they do to cocaine and heroin, but there is an element of lifestyle choice involved in both. The question for the anti-counterfeiters is: how can you convince consumers to buy only the authentic article or to go without? And the answer is: you can’t.

 

Certainly, there are some people duped into buying fakes when they think they’re getting the genuine item, and these are the people probably most victimized in the business of counterfeiting. These consumers pay what seems to be a good price for a designer product and may or may not find out later that the purchased item is a fake. The Internet, and especially auction sites such as eBay, have become notorious for the distribution of counterfeit products, but it is still a case of buyer beware for shoppers, wherever they buy.

 

It’s possible though, that most consumers purchasing counterfeit products know the product is not authentic, but don’t care. Bargain hunters may not be able to afford the real thing and some shoppers even relish the idea of taking a jab at designers and big corporations by buying a knockoff and flaunting it openly. There is even a growing segment of people who are always on the lookout for the best fakes and the best deals. For them, possibly no amount of persuasion will succeed in halting the counterfeit trade.

 

Virtually all designers create several lines of products, with at least one being priced to appeal to the less affluent. But with marketing being such as it is, consumers immediately recognize the lower-priced line and it, therefore, carries less cachet. In a twist of irony, perhaps the best way for designers to stop counterfeiters is to go into the business themselves.

If you beat ‘em, join ‘em.