European governments lose more than fifteen billion euros in revenue every year due to counterfeiting. A new survey also reveals that counterfeiting has close links with other types of organised crime and poses serious health risks.
Spirits, make-up and drugs
Counterfeiting costs EU Member States fifteen billion euros a year in revenue, with illegal producers paying neither taxes nor social security contributions. But the real cost of counterfeiting is much higher still: among the industries most affected are cosmetics, beverages and toys, which implies high health and safety risks.
In a new study, EUIPO, Europol and the OECD look at four sectors where counterfeiting is particularly rampant: pharmaceuticals, cosmetics and personal care, wines and spirits, and games and toys. The very nature of these products makes them a major danger to consumers, but it also appears that counterfeiters are increasingly linked to organised crime and other criminal activities.
9.6 billion euros in counterfeit cosmetics
The economic cost is also on the rise: the shortfall in these four sectors is estimated at nineteen billion euros. Each year, the cosmetics and personal care industry alone loses around 14.1 % of its turnover, or some 9.6 billion euros, due to counterfeit products. This loss of revenue has increased by more than 2.5 billion euros compared to 2019.
In Belgium alone, for example, counterfeiting represents a loss of turnover of 686 million euros in the four sectors concerned. Pharmaceutical products account for almost half of this amount (324 million euros), while counterfeit cosmetics cost the Belgian market 279 million euros. Finally, counterfeiting costs 64 million euros to suppliers of wines and spirits and 20 million euros to the toy industry.
