Counterfeiting: Why the food industry must fight the fakers
Faking isn't just about luxury goods and DVDs. Much more mundane products are now routinely targeted and the food industry is in the fakers' line of fire. Chris Lyddon reports.
There has been a big change in the nature of counterfeiting, Marie Pattullo of the European Brands Association AIM told just-food.com. "Until ten to 15 years ago the most counterfeited things were luxury goods, things like handbags and designer labels," she said. "But if you look at the customs figures now less than 1% of what is seized is luxury goods. One sector is food and drink. Hundreds of thousands of items are seized."
No-one is immune. "You name it, you can counterfeit it," she said. The reasons why the counterfeiters had turned away from luxury brands were simple. " If you come through customs with a trailer full of Louis Vuitton handbags most customs officers will think it's strange. If it's shampoo no-one will blink."
"Every brand is being targeted. As soon as it's a big seller it's being faked," she said. Everyday items like food did not even have to be sold cheaply. "You can sell it any where," she said. "If you buy coffee etc at exactly the same price you don't know it's a fake. You're being doubly ripped off."
Food industry keeps quiet
For the food industry concern about losing brand image means that most cases are kept very quiet. "One of the issues the food and drink industry has is that they are very sceptical about talking about cases, because they don't want to cause a panic," she said.
Even so the industry was taking the issue very seriously. "The reality is that the industry doesn't want its brands stolen and consumers don't want to eat faked food. More and more companies will say they are trying to stop it. It's also a very real issue that people die of counterfeit food."
What to do
There is no need to accept counterfeiting as a fact of life. "There are all sorts of things you can do," she said. "Most of the large companies have brand protection departments. Most of them have private investigators."
One strong weapon was to make use of customs powers. "As from 1st July, it's free to register a mark with customs," she explained. "It gives customs the power to look for your marks and stop them." That put real clout behind you. "It gives you one of the biggest investigative forces in Europe. If they're suspicious they can only hold goods for a certain amount of time, unless they have the permission of the rights holder.
It was important to make sure that customs had full information. "Give them the real routes and the real carriers," she said. "It gives them a lot more facts to work on."
Often rights holders would train trading standards, or their equivalent, and customs officials, she said. Telling them that, for example, you never, ever use a particular port would help them understand what they were looking for.
The industry may not advertise it, but the European Union does give overall figures on what customs officials seize. In 2001 they got, for example, 2.6 million packets of chewing gum in Spain, 871,000 boxes of chocolates in the Netherlands and 23,236 counterfeit bottles of olive oil. They have also found counterfeit rice and lollipops.
Fake baby food
One food industry counterfeiting story which has been made very public was in the United States. According to the US Food and Drug Administration's Consumer Magazine, a counterfeiter bought 500,000 pounds of bulk infant formula, marked export only, cheaply from a legitimate company. The formula could not be sold in the US because it did not contain the levels of nutrient required by US law.
But instead of exporting it, the counterfeiter, whose name was Mohammad S Mostafa, hired labourers to pack the powder in cans similar in size and appearance to those used for a product called Similac, made by the Ross Products Division of Abbott Laboratories. He ordered 50,000 labels bearing the name Similac, by posing as a representative of Ross Products.
More than 3,500 cases of the counterfeit infant formula found their way into retail outlets in California. FDA investigators were alerted when "numerous" parents who were familiar with the real product complained to Ross and to the FDA. The powder looked different and the enclosed scoop was different to the one provided with the real Similac.
Agents of the FDA's Office of Criminal Investigations traded the counterfeit formula to a grocery wholesaler who identified Mostafa as the seller. They were able to seize more than 6,000 cans of the formula from retail and wholesale outlets, as well as seizing the formula, cans and counterfeit labels from Mostafa's premises.
He fled the country, but Royal Canadian Mounted Police, on heightened alert following the attacks on the US on 11th September 2001, arrested him with a group of men who had applied for asylum in Canada.
In August 2002, after a three day trial, he was found guilty and on 16th December 2002, Mostafa was sentenced to three years and eight months' incarceration followed by three years' probation.
In Britain the Anti-Counterfeiting Group lobbies on behalf of a wide range of companies concerned about the growth in counterfeiting. The food industry is already working hard on the issue, ACG Director General Ruth Orchard told just-food.com. "They have all kinds of coding and product security devices. They have their own people who investigate and follow up cases." But there was only so much the industry could do on its own. "The enforcement agencies have to do the actual nabbing people," she said. "It's not down to us it's down to them."
Only official law enforcers could break down doors and force their way into suspect premises for example. "They're the ones who have the powers," she said.
Need for more resources
Governments needed to put more resources into the problem and make sure it was taken seriously, "so it's treated as seriously as stolen goods." There was a change in attitude. "Government is taking it more seriously," she said.
Food was one area for particular concern. "We're very aware that there is a high risk with food," she said. It had not happened yet. "We don't want to have a tragedy before it's taken seriously," she said.
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