05 May Counterfeiting in the cosmetic and personal care industry: 9 cases
According to the OHIM, counterfeiting generates 4,7 billion euros of direct losses annually for the European cosmetics industry. This amount represents 7.8% of total sales in the European Union’s cosmetics and personal care industry resulting in 50,000 jobs losses[i]. Taking into account the effect on suppliers, revenue losses are up to 9,5 billion euros resulting in 80 000 jobs losses[ii].
In addition to direct revenue losses for brands, counterfeiters are putting consumers’ health at risk and generate major tax revenue losses (1,7 billion euros)[iii].
Here are a couple of counterfeiting cases that have been in the news in the past year:
- Dubai, April 23, 2015
The Department of Economic Development in Dubai has seized a staggering 1.4 million counterfeit cosmetics from just one warehouse, with an estimated market value of Dhs16m(»$4,356m)[iv].
- Korea, February 12, 2015
The Korean Intellectual Property Office (KIPO) has seized more than 100,000 counterfeit products of the wellknown face mask brand; ‘Leaders Insolution’ from a Chineseowned factory, close to the border of North Korea[v].
- Vietnam, February 11, 2015
Police in Vietnam arrested a man near the border of China, suspected of manufacturing and selling counterfeited cosmetics. Vietnamese police reported they had discovered and seized more than 31,000 products, as well as approximately 200kgs of raw materials and ingredients presumably intended for the manufacture of products at a warehouse facility in Quang Ninh Province, according to an online news report from Nn Express[vi].
- US and Online, January 23, 2015
Estée Lauder was awarded over $1.8 million after winning its lawsuit filed in March 2013, following litigation in Australia where the beauty player had taken retail giant, Target to court for stocking MAC knockoffs. That case revealed that a Target supplier had received counterfeit goods from the ‘Get Your MAC On’ company, which began selling fake MAC products on its website in 2009[vii]
Jorge Robles, Ana Del LaMota and Rossy Robles had all been arrested in December for importing counterfeit Mac items from China and selling them in New York City and through an online retailer. They were found to be in the possession of 2,000 fake items and approximately $22,000 in cash[viii].
A Google search turned up several warnings about counterfeit MAC products and 70,000 videos on YouTube about how to spot a fake. MAC’s website also has an entire page dedicated to counterfeiting, warning it does not “offer its products through….individuals, street vendors, flea markets, internet auctions, independent boutiques or unauthorized online retailers.”Still, eBay has thousands of MAC products for sale and the Internet is filled with sites selling suspect MAC products at ultra cheap prices[ix].
- Hong Kong, January 19, 2015
Hong Kong Customs’ Intellectual Property Investigation Bureau today mounted a special raid operation and cracked down on two retail shops of a syndicate selling suspected counterfeit cosmetics. Customs Officers seized about 100 items of suspected counterfeit cosmetic products with a total value of about $5,000[x].
- Bangladesh, December 22, 2014
A mobile court yesterday sentenced seven people to jail terms ranging from two years to six months for counterfeiting cosmetics and toiletries of foreign brands in the capital’s Chawk .Bazar. The court also fined each of them Tk 1.5 lakh and destroyed 20,000 pieces of the products worth Tk 20 lakh, of five shops and a factory at Khan Market in Chawk Mogholtuli[xi].
- France, November 4, 2014
On November 4, the National Gendarmerie, the French army police, intervened in twenty-eight different Equivalenza shops and corners and seized merchandise deemed counterfeit.
- Channel Tunnel, September 25, 2014
Border Force officers at the Channel Tunnel entrance in France have seized around 578 boxes of counterfeit cosmetic gift sets with a potential value of up to £10 million. ‘’As soon as we examined the items, it was clear from errors with the labelling and instructions that the cosmetics were definitely fake. The makes involved include Dior, Chanel, Bobbi Brown and MAC’’ [xii].
- Online, July, 2014
Last summer, online marketplace eBay and luxury good firm LVMH finally settled their longstanding legal fallout over counterfeit products dating back six years[xiii].