News24

Counterfeit industry grows, tops R360bn

2011-10-03 22:22

Johannesburg  - The South African counterfeit industry is estimated at approximately R362bn and is viewed as one of the world's fastest growing industries, with seizures of fake goods up 46% annually according to a counterfeiting expert at attorneys Adams & Adams.

In August this year, a few weeks prior to the 2011 Rugby World Cup, the South African Revenue Service (Sars) confiscated 66 000 counterfeit rugby jerseys, with an estimated street value of R43m.

Despite this, vendors continued to stand on street corners, traffic islands, and outside pubs and restaurants, and sell fake rugby jerseys and other items to fans.

"Because of its unique modus operandi, it is almost impossible to obtain accurate statistics on the counterfeiting industry.

"In South Africa, it's estimated to total an astounding R362bn," said Nishan Singh, senior associate and counterfeiting expert at attorneys Adams & Adams.

Singh said that globally, seizures of counterfeit goods were reportedly increasing by 46% annually, making the manufacturing of counterfeit goods one of the fastest growing industries worldwide.

According to Singh, the global market was initially targeted by counterfeiters producing copies of well-known international trade marks and products such as clothing, shoes, watches and sunglasses.

He said this had diversified to unlikely marketing such as household detergents, cigarettes and automotive parts, as well as pharmaceutical products.

"Counterfeit goods have both economic and social implications. Naturally, the proprietors of the genuine goods suffer huge economic losses, while the consumer is now on the receiving end of inferior quality goods which expose them to both safety and health - which is particularly disturbing - dangers," the legal expert said.

Sophisticated

Adams & Adams pointed out that counterfeiting was also generally related to other criminal activities such as drugs and money laundering.

The growth of counterfeiting has been so exponential that certain industries could themselves in direct competition with the counterfeiters.

"Advances in technology, increased international trade and emerging markets are factors that have contributed to the rapid increase in the prevalence of counterfeiting," Singh said.

Ideally, these goods should be prevented from entering the South African borders in the first place, however, due to the large volume of containers that were being imported into South Africa, only around 5% were searched by customs officials.

As a result, counterfeit goods slipped into the country under the radar, the legal firm said.

"In order to file such an application," explains Singh, "the proprietor must furnish the commissioner with a specimen of the original goods and details of its intellectual property rights - which include copyright and registered and internationally recognised trademarks. 

"Once the counterfeit goods are seized, criminal and civil prosecution against the importer may commence."

The apparent quality of counterfeit goods had also improved and it had become increasing difficult for the police and customs officials to identify these goods.
Furthermore, counterfeiters approach the market with increasing sophistication which made the industry more difficult to counteract.

"Ultimately though, the responsibility lies with the end consumer. The litmus test is - if the cost of an item seems too good to be true or the source a trifle dodgy, then generally it is not the real thing," concluded Singh.

Comments
  • POLLENYS - 2011-10-03 22:40

    "only around 5% were searched by customs officials." Ridiculous. Where are the officials? Sleeping? Out to lunch? Fired with full pay?

      ttshabalala - 2011-10-03 23:35

      Ah, Pollenys! It is "the world's fastest growing industries".....it's a global problem dude, not just SA's. If our counterfeit problem is caused by sleeping officials, then the entire globe is snoozing. Hawu Pollenys! Hawu hawu hawu, is there a need to always be negative...marr? Hai...maaan! How old are u?

      MyWereld - 2011-10-04 02:05

      Pollenys Looks like ttshabalala is in on the game.He is merely protecting his market. I agree, when the criminals read"only 5%..." they say, let's get more drugs in. There is a vast market for fake brands, and buyers know it. Just the mere fact that you wear a fake Rolex, gives you a fake feeling of fake wellbeing. The market will always dictate. The genuine product manufactures are not losing millions, because, the people who are buying the fakes cannot afford the genuine product. This fact is very conveniently ignored.

      AndrewM39@24.com - 2011-10-04 08:19

      Not fired but suspended with full pay and still allowing fake goods to enter into RSA.

      JWock - 2011-10-04 08:34

      A matter of ratio of people to search vs amount to search. Imagine they searched everyone's bags at the airport. It's unreasonable.

      AfroMaleGp - 2011-10-04 08:49

      Its not only ur SONY ,NIKEs : Even previously disadvataged people are being ripped off.Take Zahara's C.D. for instance .Her C.D. just went platinum on the black market-she won't get a cent. What is the official gvt stance on counterfeiting?Is it working for us(e.g. street vendors) or is it bad for our economy(manufacturing) ?

      keedman - 2011-10-04 09:52

      Having fried chicken on a milk crate....

      Snotty - 2011-10-04 09:53

      My partner loves the LOUIS VUITTON BAG!!!! no worries for me

      Pekkie - 2011-10-04 10:35

      ttshabalalalala how old are you? Chinese trade remember, the one the ANC signed to put their own people out of work so as to ensure votes by the poor!

      Expat - 2011-10-04 10:47

      If it's criminal, corrupt, or illegal, you can trust SA to turn it into a thriving industry - SA motto; Crime Pays

      letsee - 2011-10-04 10:57

      If the world was free trade we wouldn't need trade agreements. Reality is that China is responsible for their people and economy and not for that of South Africa. But then... South Africans have to be part if it and that's where the ANC comes in but is incapable.

  • BrokenLink - 2011-10-03 22:50

    Look at the positive.....at least one industry is growing ;)

      Stoutgat - 2011-10-04 06:24

      And why is the "fake" fake industry growing? Because the makers of "real" fake goods are gouging the public. Somebody can make Springbok jerseys and sell them at street corners for much less than R100. However, the "real" fake goods cost anywhere up to R1800, which is an 1800% profit. Profiteering and gouging, in other words. I have a suggestion for the makers of "real" fake goods. Stop ripping off the public with your naked greed - make a reasonable profit, not 1800% - and the market for "fake" fake goods will disappear.

      Matt :-) - 2011-10-04 08:34

      Well, JZ did promise more jobs... he didn't specify WHAT jobs though - so SA has a growth industry in selling pirated goods now

      ratex - 2011-10-04 08:53

      @stoutgat, let me give you a heads up on retail. Firstly the fake goods are fake and the quality is shocking. They use synthetic fabric and not the specialised hyrid type rugby fabrics. They do not have all of the badges and tapes inside the welt or neckline. These fake shirts will last about 6 motnhs. Why are they cheap, well they are made in chinese sweat shops by 8 year old kids. So ya boeat, go buy one and support slavery. The retailers are greedy working on an average on lets say 60% IMU. However, these shirts are the real deal. So if you want a BMW pay the price, don't buy a pas gekoop en sat gery and then stick on a BMW badge? Lastly, your comparison of R100 to R1800 is so way off of the mark, it is laughable. The fake tops cost about R80 per item, the real deal cost about R400 to 500 per item. I do agree that the retailers are a greedy bunch, I have been in retail for 20 odd years, so trust me I know.

      kenneth.roselt - 2011-10-04 09:23

      @stoutgat - could noty agree more, the big shops are ripping people off daily, and they blame it on high operating costs etc, yet top brass take / get HUGE bonuses and they still post extremely high profits. South Africans are being ripped of by these guys, pure and simple.

  • Sam - 2011-10-03 22:51

    Now I understand why doesn't china want Dali Lama to come to Mzansi

      AMS-Dammer - 2011-10-04 05:50

      YEAH...China needs SA with NO MORALS!!!!

  • StBad - 2011-10-03 22:52

    Intellectual property, licensing rights, patenting and any other mechanism which tries keep hold of something you've invented or paid alot of money for can sadly only exist in a regulated world... it's actually a pretty greedy and selfish notion only conceivable due to the fact that there are so 'damn' many of us which in turn makes this world a competitive one. I'm sick of this brand name, official merchandiser, exclusive rights thuggery which has us all overspending. I'll never buy a R100 roadside Bok jersey (with bright orange colours instead of gold), so let the consumer decide what they will and won't pay for. It isn't always about price... almost!

  • gcr - 2011-10-03 22:52

    There is a simple way to stop this, ban all street vendors from intersections, if they are caught at these locations take away their product.

      burtfred - 2011-10-03 22:57

      Yes, the metro police do take away their product, and then sell it back to the traders.

      Chris - 2011-10-04 06:05

      The fact is that in the event of these street corner traders being banned we will see a surge in crime to a level that will ensure the destruction of South Africa sooner rather than later. The authorities have to stop the imports, human and other, in the first place. They must then ship all persons not here legally back to their countries of origin. This will immediately create a large number of jobs for locals. Then they need to ban unions as they are one of the prime reasons the cost to consumer in South Africa makes imported rubbish attractive. Just do not hold your breath waiting for our government to stop their internal jostling at a diminishing trough of greed to actually do their jobs as laid out in our Constitution.

      Chris - 2011-10-04 06:12

      See also: http://www.news24.com/SouthAfrica/News/Cops-confiscate-counterfeit-clothes-20110826

  • Murph - 2011-10-03 22:55

    This is getting out of hand, we also have fake ministers, fake police and fake council workers although their street value is yet to be established.

      IsThatAFact - 2011-10-04 06:34

      Murph you forgot fake democracy, fake president, fake ancyl, fake nurses, fake self importance of gov employees etc, and for a smile fake orgasms, fake lips, fake breasts, fake of fakes. In some cases if the real product wasn't so expensive due to all the middle men wanting their cut and becoming millionaires over night it creates a market. If you look at some of the markups taxes etc its a crying shame in this country. As an example I bought a camera in Japan for R14000 in SA R21500

  • crackerr - 2011-10-03 22:57

    R360 BILLION? Self-promotion at full steam. Whistles and steam. What crap. Never accept statistics unless they are independently confirmed. Not even to mention guesses. We live in a BS world.

      zaatheist - 2011-10-04 04:12

      I agree that this self-promoting bozo at Adams and Adams never did arithmetic at school and has no idea what a billion is. R360,000,000,000 - and they seized "rugby jerseys, with an estimated street value of R43m. This is pure nonsense.

      Stoutgat - 2011-10-04 06:20

      Dead right. R360 billion is approaching half of SA's GDP. Clearly these idiot lawyers' sums are wrong. Again.

      crackerr - 2011-10-04 11:43

      @ NISHAN SINGH Dates and details and how you arrived at the astronomical total of R360 BILLION. You are not seriously suggesting that several seizures of R43 million each takes place every singly week? The figure is inflated - hugely so. Like most other figures that are played with in this country. I challenge you to substantiate your estimate.

  • Nkosinathi - 2011-10-03 23:01

    If we all don`t want such activity to take place in our country, then I believe we should not buy them..it start with us...

      abee.malamule1 - 2011-10-03 23:25

      I support you my bro 100%,that the only way to cut tis kind of work.

      Ronnie Jacobs - 2011-10-04 06:57

      Agree fully! NO DEMAND= NO NO SUPPLY... ie; why would factories make fake Bok jerseys..? Don't think their locals are big Bokke fans

      allie - 2011-10-04 07:45

      Zuma is creating jobs in China.The moraless dealing with the moraless.

  • BryanJhb - 2011-10-03 23:27

    Not evident what exact aspect of the countereit industry the R360bn is suppose to pertain to ... possibly total sales. It sounds intuitively to be far too high as our GDP is about R2100bn.

  • Michael Soldaat De Koker - 2011-10-03 23:38

    I work for a global movie company & we estimate our losses due to piracy of movies/dvds at R5b pa...&the only way to keep the movies going is fire people&cut costs to the bone. Piracy is theft&thieves belong in prison...so any person found with a pirate copy, however innocent they might think they are, should get a fine or jailtime!

      jabski - 2011-10-04 07:00

      while the main actors get 20 million dollars a film???????? and thats without the hidden propoganda in most of them and the lies they portray. i would say most of them are only worth the pirate copy

      munchkin.ross - 2011-10-04 07:45

      Make your movies cheaper! If I go to the movies at the ciname, and take my family, it will Cost me R400. Thank you Internet, where I can make a legal purchase of the movie, download it, and buy my own popcorn and cola for a 10th of the price I buy at the cinema, and watch it on my nice full HDTV, Sorry, but the cinema is dying, if you want to attract people, make it affordable.

      Tronn - 2011-10-04 12:22

      If they create the technology for people to download and copy movies, people will use it. Blame the technology that has been made available, not the people.

      Zion - 2011-10-04 13:09

      China sees american movies before they hit the American Market.

  • Piet Opperman - 2011-10-04 00:38

    "...if the cost of an item seems too good to be true..." then you know it is a fake. Because nobody can make and sell a Springbok jersey for less than R800, can they? Can they?

      Ronnie Jacobs - 2011-10-04 07:03

      I bet the cost of the original Canterbury Bok jersey is around R150... I bought mine at R589 (original) and it's my fifth one as I buy one every world cup year. We are getting ripped off but sadly not all of us can afford those prices.

      thabo.tebele - 2011-10-04 08:42

      @ Piet and do you perhaps have an idea how much does it coast to make an original Bok jersey?

      John - 2011-10-04 08:51

      the knock off's and the real kit are made in the same factory, some of the materials may differ a bit but otherwise a good knock off is very close to the original, the chain stores are to blame here with there mark ups of 300-400%

  • Faith - 2011-10-04 01:17

    R360bn? That's sounds totally made up. I'm sure it's incorrect.

  • FartaWorks - 2011-10-04 01:45

    Hello my China!

      2shy2call - 2011-10-04 08:10

      China still figuring out how to do a human being. first counterfeit it will be call Ju Malemcho.(Julius Malema)

  • WhiteLabel - 2011-10-04 04:35

    Actually, our currency is also counterfeit. Since we dropped the gold standard and moved onto a fiat currency, one may safely assume this.

  • Ronnie Jacobs - 2011-10-04 05:33

    It ain't China's fault... factories on that side don't manufacture without someone placing an official order for a specific product.

      Whynot - 2011-10-04 06:07

      That's not true a colleague has just returned from China and he was telling me that there was three huge shoppping centres that only sell fake goods. The Chinese are deliberately making the products and of course people will buy them because they are cheap. Once again China is manipulating the markets.

      Ronnie Jacobs - 2011-10-04 07:33

      @Whynot - Yes, I've also been there but ask your friend what is the client base and reality is that they are for export. Since your friend has been there, ask him if he saw any chinaman using a fake iphone or fake iPad for that matter... the answer will be NO! So who buys the fake stuff and why? Lastly, I do not believe Chinese in the mainland would deliberately knock off the Bok jersey to wear it themselves... most people there don't even know what Rugby is...

  • Zion - 2011-10-04 06:07

    While prices of the genuine article is reaching the sky it is obvious that counterfeit replacements will be the order of the day. I have seen the rugby jerseys and had I the R250 I would definitely taken one. On examination the details were perfect. It was carrying the Canterbury logo,made in China and perfectly put together. I could have bought a genuine All Black jersey for just over R900. So given the rip-off prices just don't cry for me Argentina.Drop your prices then I will reconsider.

      AfroMaleGp - 2011-10-04 09:06

      I went to V.W for a qoute for a small piece of a "plastic whatever"...they quoted me R800,00.Now there's a market right there.Cry me a river.

  • Willem - 2011-10-04 06:10

    There is only a market for counterfeit goods because the consumer is getting ripped off by the people owning the genuine brands (which they mostly have manufactured in China in any way) The best way to eliminate the problem is by making the genuine product's price down. I am not in support of counterfeit products, but if a c/f rugby jersey cost R200 and the genuine brand cost R250 in stead of R600, which one would most people then buy?

      Ronnie Jacobs - 2011-10-04 06:26

      Agree totally!

      Peter - 2011-10-04 09:56

      Yes but you must remember the fake one is Dangerous!!!!

  • Bronni - 2011-10-04 06:11

    Make the real deal more affordable and people wouldn't feel the need to buy the fake option.

  • Honestly - 2011-10-04 06:45

    Banana republic where crime is a profession. Look at the ANC cadres, starting with the chief herdsman JZ

  • Wesley Shuttes - 2011-10-04 06:52

    How do they calculate? "confiscated 66000 jerseys with street value of R43million". Say one jersey = R200 x 66000 doesn't add to 43million.

      Ronnie Jacobs - 2011-10-04 07:06

      Hahahah..! I'm buying the original in that case : )

  • trekpostal - 2011-10-04 07:06

    Trust SARS to do the math R43m / 66000 = R650 each - not quite true as they sell for R150 at the corner making it R10m in true "street value" (lies, damned lies and statistics) My biggest gripe is that customs destroys the clothes they confiscate in stead of just handing it to those in need at the cost of transport to the government to get it to the social department. Selling replica / fake / counterfeit goods is not the right way of doing things ethically but at least in gives money back into the informal economy and food on to plates. Few weeks back I was walking around in sportmans warehouse and they were selling Bafana jerseys at R30 and last year the officially SWC jersey retailed in the hundreds - makes me think. A rugby jersey was the very first item that I have even bought from a street vendor and I have no regrets or feelings of guilt. The so called official jersey is also made in China and how it is possible that polyester can cost so much as labour cost is not an issue in the east - mine looks and feels exactly the same. All a bunch of capitalist pigs that need to pay their floor rental space in shopping centres ;)

      Ronnie Jacobs - 2011-10-04 07:20

      You spoke my mind! it is possible for the knock offs to be of lesser quality... ie, the stitchings and this is because this process is made by manual labour but bottom line is we're all getting ripped off and this is the result. I don't pity them!

      robbieyahu - 2011-10-04 08:33

      THEY ARE ALL LIARS !! YOU ARE RIGHT !!! 360 BILLION ??? HAHAHA !! SO LET THEM THUS RATHER TAX THIS INDUSTRY ..AT LEAST IT MAKES MONEY IT SEEMS ... THEY CANT EVEN BALANCE THEIR BOOKS ..BUT THEY CAN CALCULATE THE 360 BILLION ???? HAHAHAHA !!!! LIARS

      CBCOZA - 2011-10-04 13:24

      The loss takes into consideration the original authentic item value which has that approx value. Although legal items can be purchased at under R100. They will always take the higher value and base it on that.

  • Jon JJ - 2011-10-04 07:10

    Even our president is counterfeit....

  • gatvol4corru - 2011-10-04 07:10

    It grows hand in hand withe the ANC's corruption & incompetence. Guess,there must be a link to the comrades...

  • JDW - 2011-10-04 07:13

    Well then dont sell the Rugby jerseys for R650, even though i do not support this Industry i believe the high Prices and profit taking has created this monster, if you ask a fair price without huge mark ups it will reduce this market significantly, lets face it everybody would much rather prefer the original if the price is right

      Ronnie Jacobs - 2011-10-04 07:22

      CORRECT CORRECT CORRECT but it is much easier to blame CHINA!

  • Ian - 2011-10-04 07:33

    this country is fake, run by a fake government

  • munchkin.ross - 2011-10-04 07:36

    Sorry, but I will continue buying my R50 sunglasses on the street corner, I've learnt my lesson buying the real thing at R500, they didn't even last as long as the fakes. As for the Springbok Jersey's, the originals are just too expensive. Were the retailers perhaps cashing in on the hype and overpricing the jerseys for profit? Thus forcing us to buy the fakes on the street corner? Perhaps the retailers must revise their prices, Working within the retail industry myself, I get to see the kind of rediculous mark-ups the retailers are doing. The suppliers for the retailers I do work for get their stuff from China, so even the retailers are getting their "original" goods from China, marking them up rediculously, and claiming that they are the real deal, so now who is in the wrong?

  • John Howard - 2011-10-04 07:52

    Counterfeit goods do not harm anyone except for the greedy corporations. They are so cheap because the greedy corporations have been so greedy with their cut.

      SKAAMBOER - 2011-10-04 07:57

      Die originals is buitensporig duur,ek koop eerder die fake.

      Ronnie Jacobs - 2011-10-04 07:59

      Agree! and them by doing so, rich getting richer and poorer getting poorer...!

      JDW - 2011-10-04 08:10

      @John there is counterfeit products that do harm such as sunglasses, vitamins, Medicines etc they sell on the streets they do their own mixture and nobody knows what is inside, it is a fact that these sunglasses you buy cause your eyes extreme harm as it gives the person a fake (Excuse the punt) sense of protection but it has no UV protection etc

  • Trevor - 2011-10-04 08:00

    South Africans love conterfeit, they only pay 10% of what the item is really worth

      King Msendi - 2011-10-04 08:25

      They don't love counterfeits. It is the only thing they can afford…

  • NV - 2011-10-04 08:10

    Who can afford to pay for the real rugby jersey?????

  • Johnny - 2011-10-04 08:19

    frankly, if imitation goods weren't as cheap, no one would buy them, instead the manufacturers of the originals are greedy, therefore joe average will always buy the fake because it suites his pocket, in that case i support my local corner salesman

  • texx - 2011-10-04 08:29

    not a chance am i going to pay R600 for a rubgy jersey when i can get it at the side of the road for R100????

  • Zhulu - 2011-10-04 08:42

    I will not blame China, but our own Mafia led Government, they are so concerned about what ends up in their back pocket that they forgot about social order, leadership responsibilities...all these open trade to countries well know for counterfeiting and look at our Cities how many chines mall have been open and they have open trade and we all go there to by counterfeit cos they cheap and freely available.. our government can not release statements about how concerned they are about counterfeit in our country because they are directly responsible for it. How do they pay tax after all...

  • iWeasel - 2011-10-04 09:07

    That fat cat in his tower overcharges us into the ground with his ridiculous prices for items.oooh + I am paying somebody merc in the government because of tax.... then the guy who sells his shirt on the street corner does not break into my house because he has money to buy food for his family...who must i buy from?

  • Draco87 - 2011-10-04 09:10

    I believe the huge corporate’s are to blame, before the so called recession we were all being screwed on high prices!!! What happened to all the money made before the recession. All of a sudden there is a huge special and buy 1 get one free and kids eat for free etc. Counterfeit goods at some points are even better than the original and CHEAPER. The world should stop being so blady greedy and think about the average Joe. Funny before the world got greedy there was hardly unemployment and people were entrepreneurs why don’t we boycott the BIG brands and who exploit our local population and start our own brands etc thus it = Job creation and economic development

  • Thulas - 2011-10-04 09:20

    the officials are busy having unprotected sex with outside lovers and making video's. 5 flippin %, then they must just forget about Drugs coming into South africa.

  • Badballie - 2011-10-04 09:26

    Learning well from their Chinese masters.

  • Obama - 2011-10-04 09:26

    Perhaps and I say perhaps, a reduction in our pricing structure could also help. The main reason piracy thrives over so called original stuff is because of pricing. If I can buy a Boks jersey for R100 on the street, I will do so, instead of paying R500 for the same looking jersey. Its just logic I think. Everything in this country seems to cost double what other countries charge for it, even the stuff we make here, like cars. Its ridiculous! So piracy will thrive. I read an article a few weeks ago that guys are even making their own taxis now. Which would explain the many taxi accidents. Pirated taxis.. I mean WTF!!

  • Clinton - 2011-10-04 10:24

    If the original was priced better, more will buy. Bring prices down, and the R362bn will come down to a third!!! The problem is there are too many "middle men" getting a cut...Pirating is our only resort

  • LadyJJ - 2011-10-04 10:33

    Goods are too expensive in this country ....that is why people make use of counterfeit, all want to look nice so why should only the rich afford I think if it is reasonable than people will not have to go for conterfeit

  • Pekkie - 2011-10-04 10:34

    All made in China, all costing SA jobs, taxes! The underbelly of the ANC has gutted its own peoples right to employment! Fail!

  • Nicholas - 2011-10-04 10:36

    @Chris - http://www.news24.com/SouthAfrica/News/Cops-confiscate-counterfeit-clothes-20110826 No arrest have made, which means our government is empowering underground marketing..?

  • Enigma - 2011-10-04 11:49

    If the govt can't handle the influx of illegal foreigners in this country, then they have no chance in fighting "fong kong" goods. Get rid of the Chinese, Somalis, Nigerians and any other illegal immigrants first.

  • Tronn - 2011-10-04 12:18

    Which country's are involved? Who are the country's manufacturing these goods? Our great trading partner wouldn't be involved perhaps?????

  • Tronn - 2011-10-04 12:29

    How do you know that you are buying a "genuine" product? By the label? By buying it in the "right" shops? ha Ha Ha I also know for a fact that Genuine products are often made in the same factory as fake products. two different markets....more profits!!! "Genuine" products today are often made of poor quality, so how do we really know that it is "genuine"??

  • CBCOZA - 2011-10-04 13:21

    But this is via China, they are our allies.... so its Ok. :-/

  • markblack10 - 2011-11-30 13:30

    66000 Rugby jerseys, 43million value = R650 per shirt. They sell it for R200. Does that mean counterfeiters are making a loss of R450 per shirt... Very nice people!

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