• 7.4 % of sales in nine sectors are lost due to the presence of fakes in the market.
• Clothes, toys, sports goods, jewellery, handbags and music among the sectors affected.
• Government revenue lost as a result of counterfeiting and piracy estimated at £12.2 billion.
With the festive season approaching, millions of shoppers across the EU-28 are buying Christmas presents for family and friends. But the negative economic effect of counterfeit and pirated goods lasts all year round.
A series of studies carried out by the European Union Intellectual Property Office (EUIPO) through the European Observatory on Infringements of Intellectual Property Rights, estimates that over £40 billion — or 7.4 % of all sales — is lost every year in nine sectors, due to the presence of fake goods in the marketplace. Every year, an additional £ 30 billion is also lost across the EU economy due to the indirect effects of counterfeiting and piracy in these sectors, as manufacturers buy fewer goods and services from suppliers, causing knock-on effects in other areas.
The nine affected sectors are: cosmetics and personal care; clothing, footwear and accessories; sports goods; toys and games; jewellery and watches; handbags; recorded music; spirits and wine; and pharmaceuticals.
Those lost sales translate into close to 500,000 jobs directly lost or not created across these sectors in the EU, as legitimate manufacturers and in some case distributors of corresponding products employ fewer people than they would have done in the absence of counterfeiting and piracy.
When the knock-on effect of counterfeits on other sectors is taken into account, an additional 290,000 jobs are lost elsewhere in the EU economy.
The studies were carried out between March 2015 and September 2016 by the EUIPO, to build up a fuller picture of the economic cost of counterfeiting and piracy in the EU.
The study series also tracks the effect of fakes on public finances. In total, the yearly loss of government revenue arising from counterfeiting and piracy in these nine sectors is estimated at £12.2 billion, in terms of lost income tax, VAT and excise duties.
The Executive Director of the EUIPO, António Campinos said:
We hope that the results of our study series will help consumers make more informed choices. This is all the more important at this time of the year, when consumers and citizens are doing their Christmas shopping and choosing gifts for their dear ones.
Through our reporting and analysis, we can see the economic effects that counterfeiting and piracy have on sales and jobs. The situation varies from Member State to Member State, but the overall picture from our study series is very clear — counterfeiting and piracy have a negative effect on the EU economy and on job creation.
The study series will continue throughout 2017, with reports on the economic effects of counterfeiting and piracy in the smartphone and pesticide sectors, as well as in other economic sectors thought to be vulnerable to intellectual property rights infringements.
United Kingdom: it is estimated that over £6.4 billion, is lost annually as a result of counterfeiting, with over £4.6 billion directly lost in the sectors identified, amounting to 6.7% of their sales. This translates into 80,500 jobs lost, with 50,800 jobs directly lost in these sectors.
UK is the 4th country most affected by jobs lost due to counterfeiting and the 5th by lost sales in absolute terms considering all sectors. UK is the country most affected by music piracy, notably because of the size of the music market and the size of the digital market, the 2nd one by lost sales in games and 3rd one in clothing and footwear sector.