The manufacturing of counterfeit handbags, luggage, jewellery and
watches costs European businesses 3.5 billion euros each year, according to new
research from the Office for Harmonisation in the Internal Market (OHIM),
the EU’s largest intellectual property agency.
The report reveals that 12.7 percent of sales of handbags and luggage,
and 13.5 percent of sales of jewellery and watches in the EU are lost due
to counterfeiting. In the UK, the research reveals that the handbag and
luggage manufacturing sector loses 149 million pounds annually as a
result of counterfeit products in the marketplace, which is nearly 12
percent of all sales in this sector.
Those lost sales translate into 27,000 jobs directly lost across the two
sectors, as legitimate manufacturers employ fewer people than they would
have done in the absence of counterfeiting the Office for Harmonisation in
the Internal Market states.
In addition, the total yearly loss of government revenue as a result of
counterfeit products in these sectors across the EU in terms of household
income taxes, social security contributions, corporate income taxes and VAT
can be estimated at 1.1 billion euros.
The president of OHIM, António Campinos, said: “The jewellery and
watches sector and the handbags and luggage sector in the EU
are overwhelmingly made up of micro-enterprises, which employ fewer than
ten people. The average number of employees per enterprise in the jewellery
and watches sector is just three people. Such businesses are particularly
vulnerable to the economic effects of counterfeiting.”
More than half of the EU’s total manufacture of handbags and luggage
takes place in Italy, where the sector was worth 6.5 billion euros in 2012.
Italy also accounts for 40 percent of the EU’s exports and 35 percent of
the sector’s total EU employment. The handbags and luggage manufacturing
sector in Italy loses 520 million euros every year as a result of
counterfeiting, one-third of total lost sales in the EU.
Image: OHIM