Covid-19 triggers growth in counterfeit goods and efforts to counter illicit trade, Smithers study says

Covid-19 triggers growth in counterfeit goods and efforts to counter illicit trade, Smithers study says
The Covid-19 pandemic of 2020-21 triggered an unprecedented crisis that had a significant impact on the illicit trade in counterfeit goods, according to a new report from Smithers, The Future of Anti-counterfeiting, Brand Protection and Security Packaging to 2028. The study looks at technologies used to thwart, deter, detect or mitigate threats to brand equity posed by counterfeiting and piracy, diversion, tampering and theft of products protected by intellectual property (IP).
Impact of Covid-19
End-use sectors hit hard by the reduction in global trade during Covid-19 included food, beverages, pharmaceuticals, cosmetics and electronics components. Global fears over shortages of particular products increased demand for illicit or counterfeit goods, providing numerous opportunities for unscrupulous individuals and organisations.
Tamper-evidence products and supply chain security solutions
According to Smithers, the global brand protection market is dominated by tamper-evidence products and supply chain security solutions, which account for a combined 80.1% share of total market value in 2021. From 2017, annual growth was highest for the supply chain security sector, averaging more than 10%. At the other end of the scale, annual average growth since 2017 was much lower for tamper-evidence products (1%) and loss prevention (0.5%). Between 2017 and 2021, supply chain security solutions increased their share of the overall market, from around 25% to almost 32%. To 2026, growth is forecast to be highest for this sector, which is poised to increase its share of the total market from under 32% to over 35%.
When analysed by technology, track-and-trace solutions have become the market’s largest
sector since 2017, overtaking tamper-evident devices. Between 2017 and 2021, track and-
trace’s share of the market grew from under 33% to almost 39%, with value sales increasing by an annual average of almost 9%. In contrast, the market for anti-theft solutions experienced extremely modest growth during this time, not helped by the trend away from physical stores to online retail.
Illicit trade in fake medicines
According to the Organisation for Economic Co-operation and Development OECD/European Union Intellectual Property Office EUIPO the trade in illicit medicines grew by 25% from 2019. Of these 45% are counterfeits and 55% are stolen. A study by found that the People’s Republic of China, Hong Kong (China), Singapore and India are the main provenance economies for counterfeit medicines. While China and India are the primary producers of fake medicines, the United Arab Emirates, Singapore and Hong Kong (China) serve as transit economies. Other relevant transit points for fake pharmaceuticals are Yemen and Iran.
Illicit trade in food
Enforcement officers from Europol confiscated 12 thousand tonnes of substandard food and stopped operations of nine organized crime and gangs (OCG) in 2020. OCGs froze large volumes of excess milk and dairy products, which resulted from lower demand, and then sold them on the market. Another example is counterfeiters adding chlorophyll and betacarotene to substandard seed oil and then selling it as extra virgin olive oil. Horsemeat from illegal horse slaughtering, involving forging of transportation documents for animals, was also confiscated.

Purchasing of counterfeit goods
A 2022 survey conducted by Youth Scoreboard identified a rising trend in the intentional purchase of counterfeit goods, with 37% of young people confirming that they bought at least one fake product in the last 12 months; up from 14% in 2019. An equal proportion had bought counterfeit goods unintentionally. Cost was the most important factor motivating the purchase of counterfeit goods.

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