Billions of dollars in sales losses
Counterfeit goods cost hundreds of thousands of jobs in the EU
January 16, 2024, 9:55 a.m
Clothing from Fike, Adidas with four stripes, building blocks from Lepin: counterfeit goods have been flooding the European markets for years. A study now shows what economic consequences this has for the companies behind the originals. The toy industry in particular suffers from imitations.
European manufacturers of clothing, cosmetics and toys suffer annual sales losses of around 16 billion euros due to counterfeit goods. In addition, around 200,000 jobs were lost due to such fraud, according to a study by the EU Intellectual Property Agency (EUIPO). In Germany alone, 40,000 jobs were lost.
“Copycat goods have real costs – for consumers, for brands and for our economies. This latest study highlights the very real costs in terms of lost sales and jobs in the EU,” wrote EUIPO Executive Director João Negrão. According to the study, the German toy industry is one of the most affected sectors of the economy, with a third of the annual sales losses (334 million euros) due to counterfeit goods in the EU.
When it comes to clothing, Cyprus is most affected by counterfeits, and France when it comes to cosmetics. In absolute terms, the effects in the clothing industry at the European level are most negative. It loses almost 12 billion euros in revenue every year, which accounts for 5.2 percent of total sales. The European cosmetics sector and the toy industry also reported significantly lower sales due to counterfeit branded products: losses amounted to three billion euros for cosmetics (4.8 percent of sales) and one billion euros for toys (8.7 percent of sales).
Many jobs in the clothing industry were affected
In the area of work, product counterfeiting also has significant negative effects. According to the EUIPO study, which is based on data from 2018 to 2021, 160,000 jobs will be lost in the clothing sector, 32,000 fewer in the cosmetics sector and 3,600 fewer in the toys sector.
At the same time, counterfeit branded products often pose serious health and safety problems for consumers. This particularly applies to counterfeit cosmetics and toys. According to EUIPO, 15 percent of the goods confiscated at the EU’s external borders in 2022 were potentially dangerous because they were counterfeit products.
The most important reason why consumers choose counterfeit products is that the price for the original is perceived to be too high. This emerges from a study by the EUIPO from last June. According to this, a third of Europeans think it is acceptable to buy a counterfeit product in such a case. For young people, this proportion even rises to half, wrote the EUIPO, one of the largest decentralized agencies in the European Union, which is responsible for registering EU trademarks and community designs.