2007-11-01
The draft OECD report highlighting the economic impact of counterfeiting and piracy features a section regarding electrical components. It shows just how seriously counterfeits are now being taken.
With the report including special mention of its ‘Electric Dragon’ campaigns, BEAMA CEO Dave Dossett explains why working together is the best way to beat the devious product counterfeiter. At the EUEW Conference (summer ’07, Berlin) he emphasised that distributors must play their part and be vigilant…
Copying electrical products is an insidious, fast growing ‘business’ – globally. Penalties are low, usually just token fines, and the potential profits are staggering.
The OECD (Organisation for Economic Cooperation and Development) estimates (2005) lost sales worldwide of 2.4 billion euros due to counterfeit electrical components and even this enormous number is accepted as being extremely conservative.
In many African countries counterfeits account for 25-75% share of the counterfeit electrical components market, in the Middle East 20-40%, and in eastern Europe 10-40%.
Annually, an estimated £30 million worth of counterfeit electrical products reaches the UK.
Why counterfeits?
Counterfeiting isn’t restricted to producing forged Cup Final tickets and bank notes. It affects drink, pharmaceuticals, appliances and as seen most recently even toys. The electrical industry is not immune and the consequences can be fatal
Electrical component counterfeiters are driven by the potential of a global market and high unit profitability based on low-tech, simple, low cost production. Plus, counterfeit operations are often small, so easy to conceal.
Counterfeiters are buoyed by poor enforcement of anti-counterfeit measures with inadequate penalties.
However, industry efforts led by BEAMA mean the risk of being discovered is increasing, but infiltrating established distribution chains is difficult. Provided wholesalers remain vigilant, and if safety concerns are highlighted, consumer resistance can result.
Cooperation
Decisive action is needed to combat the devious ‘masterminds’ behind this growing ‘industry’.
International cooperation concerning initiatives combating the counterfeiters is gathering pace, particularly between the US and the EU.
British Commissioner of EU for Trade, Peter Mandelson, has said
“Protection of IPR (intellectual property rights) is vital for European competitiveness… our joint work with the US sends a clear signal we won’t tolerate counterfeiting.”
New moves will ensure counterfeit products cannot comply with European safety legislation, that countries work together in improving enforcement in China (12 million euros EU allocation), and through expertise/experience exchanges, joint customs projects.
Consequences
‘Copy cat’ electrical products include: plugs, sockets, lamps, cables, connectors and even more worryingly fuses and circuit breakers which are there to protect you. Sophisticated production techniques mean it is often difficult at first sight to distinguish counterfeit from genuine until something goes wrong and that expected protection is not there.
Some copies are complete replicas – including product design, branding, packaging, internal components, external appearance. Others are of patents, trademarks, safety – and even certification marks. Most are sold at ‘too good to be true’ prices.
The consequences of counterfeit electrical accessories entering the supply chain are damaging for everyone - loss of revenue and reputation for manufacturers, wholesalers and contractors. Much worse is the potential loss of life from fire started, because one of these products failed to protect you. Safety is paramount.
Remember the three Ps:
Person – do you know - and trust - the person who sold you the product?
Place - did you buy it at a place from which a recognised trader operates?
Price – was the price in line with what you normally pay?
If the answer to any of these is ‘NO’ – beware!
You may be buying – and selling a dangerous counterfeit product. These are defective goods, manufactured without a due sense of responsibility.
International Law clearly prohibits counterfeiting, which is equivalent to the act of free riding on the names and reputations of others, receiving undue profits, and providing no guarantee on defective goods.
Action
BEAMA has taken positive action against counterfeiters for seven years. Raising awareness of the counterfeit issue and creating political will in affected countries.
Via our ‘Electric Dragon’ campaigns and intelligence networks, over 12 million products have been seized and 200 factories raided in places ranging from China, where most (over 80%) of the counterfeit electrical products are made, to the Middle East and Africa - plus the UK. Eighteen brands are now represented.
Kenya,Tanzania and Uganda have long been recognised as receivers of counterfeit wiring accessories and low voltage switchgear products. Our ‘Electric Lion’ raids have had a big impact - traders now recognise that counterfeiting is illegal and the governments in Kenya and Tanzania are taking action based on BEAMA intelligence.
In Europe, a free-to-enter market, high product prices and limited controls in countries new to the EU have seen growing levels of counterfeit electrical goods, notably in the UK, Ireland, Italy, Spain and Portugal. It’s expected counterfeit activity will next heighten in France, Germany, Holland and the Nordic countries.
Only Governments can take the necessary action to ensure effective changes. Our association’s anti-counterfeit working group through its European Federation Orgalime, has participated in discussions between the European Commission and the US Trade Administration in a joint EU/US Working Group on IPR.
At a working group meeting in Geneva (February 2007) we emphasised the importance of robust enforcement to SMEs. Local authorities and inspectors must get tougher and become more proactive, not just waiting for industry tip-offs. More controls and deterrent penalties are required to combat counterfeiting.
Counterfeit Kills
The campaign against counterfeit products has been further strengthened by a new version of our hard-hitting ‘Counterfeit Kills’ film. Called ‘Counterfeit Kills – Protect Yourself’, it’s now available in DVD/CD-Rom formats in Arabic and in the original English.
It graphically highlights the potential dangers - fire, death, injury, and impact on reputation of specifying or installing inferior quality ‘copy cat’ electrical products. The film is a pivotal part in the fight against large-scale manufacture of counterfeit products, which are not just threatening jobs and eroding market share of bona fide British electrical installation manufacturers, but are often such poor quality that they are potentially lethal
Vigilance
Everyone in the supply chain must ensure the authenticity of the products they buy or install. The alternative could be extremely costly to them - and kill people.
A new European Directive seeks to enforce intellectual property rights with retailers facing jail for knowingly selling counterfeit or copied goods. The EU is consulting on new proposals, under which those found guilty of peddling fake goods and potentially jeopardising public health, would face a minimum prison sentence of four years and fines up to €300,000.
To really counter the problem, manufacturers should register their logo and brand in every country where fakes are likely to be made or sold. Country of origin and brand name should be stamped – embossed is more effective - on the products.
This ensures crucial evidence if counterfeit tooling is discovered. Products with branded adhesive labels are no deterrent. The counterfeiter produces them separately from the product and the labels are then added in the market country.
If anyone is any doubt about a product’s authenticity they should immediately check with the manufacturer. The best solution is for products to be purchased only from an authorised supplier/distributor.
Responsibility
The responsibility for ensuring that only genuine quality products are used lies with all those specifying, purchasing and installing electrical equipment. Our campaign aims to stem the flow of counterfeit products at source – in the marketplace and transit.
To ensure the UK and European markets do not suffer from a flood of these dangerous products as has happened elsewhere.
No action is not an option.
The support of electrical wholesalers is absolutely vital – know your supplier, check with certification bodies, don’t kill your customers!
For free copies of BEAMA’s ‘Counterfeit Kills’ DVD/CD-Rom phone: 020 7793 3013
More information from Dave Dossett at BEAMAInstallation; tel: 020 7793 3009;
email: dd@beama.org.uk;
| For latest electrical industry news, register for Voltimum's free newsletter. |
|
|
Source: BEAMA |
Back