Transcrime Research in Brief - Estimating the counterfeit markets in Europe October 2015

Page created by Ellen Walsh
 
CONTINUE READING
Transcrime Research in Brief - Estimating the counterfeit markets in Europe October 2015
Transcrime
Research in Brief
          October 2015

Estimating the counterfeit
    markets in Europe
            Authors
         Diana Camerini
         Serena Favarin
         Marco Dugato
Estimating the counterfeit markets in Europe

Transcrime Research in Brief
Number 3
October 2015

Authors
Diana Camerini (diana.camerini@unicatt.it)
Serena Favarin (serena.favarin@unicatt.it)
Marco Dugato (marco.dugato@unicatt.it)

This study has been coordinated by Ernesto U. Savona

Transcrime – Joint Research Centre on Transnational Crime
Università Cattolica del Sacro Cuore di Milano – Università degli Studi di Trento
Milan office (headquarters): Largo Gemelli, 1 – 20123 Milano (Italy)
Phone: +39 02 7234 3715 / 3716; Fax: +39 02 7234 3721
www.transcrime.it

      @transcrime

      www.facebook.com/Transcrime

      www.linkedin.com/company/transcrime

2015
Codice ISSN: 2420-8183
Codice ISBN: 978-88-8443-624-5

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or
otherwise, without the prior written permission of the author

Suggested Citation:
Camerini, D., Favarin, S. & Dugato M. (2015), Estimating the counterfeit markets in Europe,
Transcrime Research in Brief - N.3/2015, Trento (IT): Transcrime – Università degli Studi di Trento

Credits: Michael W. May

Graphic project: Ilaria Mastro – Transcrime
2. Counterfeiting as a
Introduction                                                                                                   transnational crime
                                                                                                                • Counterfeit markets are transnational.
• Counterfeiting is a global phenomenon                                                                           Although domestic production is
                                                                                                                                                                  OC and the counterfeit markets
 that threatens the economic stability and                                                                        increasingly important,6 most of the

                                             1.
 sustainable growth of countries.                                                                                 counterfeit goods sold in the EU
                                                                                                                                                                  International and national law enforcement
                                                                                                                  Member States originate in countries
                                                                                                                                                                  agencies have highlighted the link between
• This crime is characterized by the                                                                              outside Europe.7
                                                                                                                                                                  organized crime and counterfeiting.8
 coexistence of several markets involving

                                             Definition
 different products, dynamics and actors.                                                                       • It is therefore important to track these
                                                                                                                                                                  Mafia and Camorra in Europe and the
                                                                                                                  flows and to tackle this activity at global
                                                                                                                                                                  Americas, and the Triads and Yakuza in
• Increasing the knowledge about the                                                                              level.
                                                                                                                                                                  Asia traffic counterfeit products in addition
 characteristics and the extent of these
                                                                                                                                                                  to other traditional activities.9

                                             of
 markets is crucial if this crime is to be                                                                      • Estimates of counterfeit markets should
 tackled effectively.                                                                                             enable comparison among countries to
                                                                                                                  monitor the evolution and the
• In particular, reliable estimates of the                                                                        international connectedness of this

                                             counterfeiting
 size of the counterfeit markets could                                                                            crime.
 improve the efficacy of counter-action by
 better orienting policies and
 interventions.

• A growing number of researchers,
 stakeholders, and public or private                                                        Map 1 - The routes of counterfeiting
 institutions have been producing a wide
                                                                                                                                                                  Departure countries
 variety of studies and estimates on
 counterfeit markets.1                       • This study uses the definition of                                                                                  China and Hong Kong are the main
                                               counterfeit products adopted by the                                                                                departure countries of counterfeit goods
• However, these studies are varied in         European Commission.                                                                                               commercialized in the EU. In 2013, 66.1%
 scope and sometimes based on unclear                                                                                                                             of total goods seized and 72.4% of total
 methodologies. This prevents                • “Goods are counterfeits when they bear                                                                             seizures show that China is the main
 comparisons across time and space.2           ‘without authorization a trade mark which                                                                          source country (Map 1).10
                                               is identical to a validly registered trade
• In recent decades, Transcrime has            mark, or which cannot be distinguished in                                                                          Greece and Turkey are also important
 contributed to the development of             its essential aspects from such trade                                                                              source countries. They rank third in terms
 transparent and rigorous methodologies        mark” (Council Regulation (EC)                                                                                     of articles seized and number of cases,
 for the analysis of illegal activities.3      1383/2003).                                                                                                        respectively.11

• Sound methodologies produce better         • Counterfeit markets are conventionally                                                                             Transit countries
 estimates and orient future                   divided between primary markets, where
                                               the fake products are sold to                                                                                      Counterfeit goods flowing into Europe
 developments by highlighting shortages
                                               unsuspecting consumers, and secondary                                                                              from the Far East and South East Asia
 in the existing data.
                                               markets, in which the purchasers of                                                                                transit through Egypt, Hong Kong,
                                               counterfeits goods is fully aware.5                                                                                Morocco, Singapore, or the UAE.
• This study presents an update of the
                                                                                                                                                                  Traffickers often exploit the presence of
 approach used by Transcrime to
                                                                                                                                                                  Free Trade Zones and large transhipment
 estimate the size of the various
                                                                                                                                                                  hubs (Map 1).12
 counterfeit markets at EU level.4
                                                                                                                                                                  Destination countries
• This document starts with a brief review
 of what is known about counterfeiting in                                                                                                                         Among the EU Member States, the United
 the EU (i.e. routes, products, consumers                                                                                                                         Kingdom, Germany and Belgium register
 and previous studies). It then proposes                                                                                                                          the highest numbers of seizures in terms
 new estimates of the expenditures for                                                                                                                            of cases, whereas Italy, Spain and the
 ten different counterfeit markets in the                                                                                                                         United Kingdom register the largest
 28 EU Member States using a                                                                                                                                      numbers of articles seized (Map 1).13
 demand-size approach. Finally, it
 discusses policy and research                                                                                            Legend
 implications.
                                                                                                                             Departure countries
                                                                                                                                                                Source: EU – TAXUD (2014) and UNODC (2010)
                                                                                                                             Main destination countries
                                                                                                                             Other destination countries
                                                                                                                             Transit countries
3. Products                                                                                                                                Counterfeit products seized
                                                                                                                                                                          Figure 1

• Certain products are more at risk of                                                       Value out of scale    20,700
  counterfeiting because of their specific
  characteristics.14

• Consequently, the size of counterfeit
  markets may vary according to the
  products involved (i.e. some markets are
  more important than others) and the
  country (i.e. counterfeit markets affect
  the economies of countries differently).

• Selecting the types of products to be
  considered and the most reliable
  sources of information is crucial for
  producing sound estimates.

• The most counterfeited products can be
  identified according to two different
  data sources: seizures and surveys on
  consumers.

• Data on seizures show which types of
  goods are detected at the European or
  national borders (supply).15

• Between 2012 and 2013, the number of
  cases of seizures and the number of
  articles seized in the EU decreased
  respectively by 4% and 10% (Figure 1).16

• The top three categories of articles
  seized in the EU are clothing (12.3%),
  other goods (11.1%)I and medicines
  (10.1%). Sport shoes (17.9%), clothing
  (17.3%) and bags, wallets and purses
  (13.2%) are the articles most seized in
  terms of number of seizures.17

• Surveys on consumers give information
  on the products that they are willing to
  buy or have already purchased (demand).18                                  ∆%                                  ∆%
                                                                                                                                                                                                                     Value out of scale     21,500
                                                                     2013 2012-2013                      2013 2012-2013
• In 2010, fashion wear and accessories
  (46% of the total) were the counterfeit                                                                                                                                                                       Total EU                               Total EU
  items most purchased in good faith in 21                           Number of                             Number of                                                                                          ∆% 2012-2013                           ∆% 2012-2013
  out of 27 EU Member States (Figure 2).19                            seizures                           articles seized                                                                                          -10%                                   -4%
  Perfumes (21%), music (20%) and films
  (16%) followed.

• Fake consumer electronics devices are                                100   1,000   2,000   3,000         4,000            5,000      6,000     7,000      100,000   300,000   500,000   700,000   900,000   2,000,000         4,000,000             6,000,000

  relatively most purchased in Latvia and
  Malta, whereas imitations of perfumes,
  sports equipment and music are the
  most frequently purchased items in
  Romania, Slovenia and Spain
  respectively.

• Comparable information about
  intentional purchases is not available at                                                                       Number of seizures                                                                Number of articles seized
  EU level.

|
    The category “other goods” includes insecticides, shoe polish,                                                                                                                                                                            Source: EU – TAXUD (2014)
    light bulbs, glue, batteries, air fresheners, washing powder.
Have you ever bought a product in good faith,
only to find out later that it was counterfeit?
If yes, what kind of product(s) was it?
Figure 2

(Percentage)

               65 - 75

               55 - 65

               45 - 55

               35 - 45

               25 - 35

                                    AUSTRIA
               15 - 25

               5 - 15

               0

    PHARMACEUTICALS

    FILM

    SOFTWARE

    SPORTS EQUIPMENT

    PERFUMES

    TOBACCO

    MUSIC

    TOYS

    CONSUMER ELECTRONICS

    FASHION WEAR AND ACCESSORIES

    SPARE PARTS (AUTOMOTIVE)

    OTHER
                                                  Source: Eurobarometer (2011)
4. Consumers
• Estimates of counterfeit markets should    Aware consumers                                  Actual and potential consumers                                             • However, the gap between these figures
  consider that consumers are likely to                                                                                                                                    is not equal for all the EU MS. The higher
  differ in their motivations and             • Individuals who intentionally buy                                                                                           the ratio between the two percentages,
                                               counterfeit articles are mostly young          • The contextual propensity to buy
  characteristics.                                                                              counterfeits can be evaluated by                                           the lower the amount of unfulfilled
                                               (15-34 years old) males.22                                                                                                  potential demand (figure 3).
                                                                                                considering the percentage of witting
• Buyers of counterfeit products can be                                                         consumers regardless of their personal
  distinguished between: unwitting           • The main driver of the intentional                                                                                        • Romania, Spain, Latvia and Lithuania are
                                               purchase of counterfeit articles is the          characteristics and the types of market.
  consumers, who purchase fake products                                                                                                                                    the countries with the largest ratio
  in good faith (primary markets) and          price. The relative majority (27%) of EU                                                                                    between actual and potential
                                               consumers agree that it is acceptable to       • They can be distinguished between:
  aware consumers, who intentionally                                                                                                                                       consumers, whereas Slovakia, the
  purchase counterfeit articles (secondary     buy counterfeit products when the                                                                                           Netherlands and Hungary have the
                                               prices of the original goods are too high.23    Actual consumers, who have already
  markets).                                                                                    purchased counterfeit articles.                                             lowest ratios.

                                             • The highest rates of tolerance for
Unwitting consumers                            counterfeit products pertain to citizens        Potential consumers, who would be                                         • Various factors can explain this gap:

                                               from South-Eastern Europe and the                willing to purchase counterfeit articles
• A survey conducted at EU level revealed                                                                                                                                 Moral: the consumers find the purchase
                                               Baltic States.                                   if specific conditions occur.
  that 20% of interviewees had purchased                                                                                                                                  of counterfeits acceptable, but do not
  counterfeit products unintentionally.20                                                                                                                                 want to break the law.
                                             • This is a general profile describing the        • The findings of a survey24 at EU level
                                               personal characteristics of the aware            show that, in general, where the
• With little gender variation, around 50%                                                                                                                                Risk: the risks of using counterfeit
                                               consumer (personal propensity).                  percentage of citizens that actually
  of respondents aged between 15 and 39                                                                                                                                   products exceed the economic benefits.
                                                                                                consume counterfeits is higher, then
  years old said that they had unknowingly
                                             • The propensity to buy counterfeits can           also the percentage of potential ones is
  bought counterfeit goods.21                                                                                                                                             Economic: the saving on the counterfeit
                                               be also driven by social, cultural and           higher.II
                                                                                                                                                                          purchase is lower than expected.
• The EU MS reporting the largest amount       availability factors (contextual propensity)
  unwitting consumption are Romania,           or by the types of product counterfeited                                                                                   Systemic: the actual supply or the
  Lithuania, Latvia, Slovakia and Hungary.     (market specific propensity).                                                                                              market conditions do not meet the
                                                                                                                                                                          demand.
• The main targets of unwitting purchases    • These latter are fundamental for
  are products with prices lower than          understanding the different sizes of
  those of genuine ones, and luxury goods.     counterfeit markets by countries and
                                               products.                                      Figure 3 – Percentage of actual and potential consumers of counterfeit products

                                                                                                       40%
                               TYPES OF CONSUMERS                                                                                                         POTENTIAL                           ACTUAL
                                                                                                       35%

                                                                                                       30%
           UNWITTING                                      AWARE
                                                                                                       25%

                                                                                                       20%

                                                                                                       15%

                                                                                                       10%

                                                                                                       5%
             FEMALE /         MALE                              MALE
                                                                                                       0%
                    15 - 39                                    15 - 34                                       CY EL SI MT BE LT LV BG EE PT ES SK HR LU AT NL RO HU PL SE FR IT DK IE UK CZ DE FI
                                                                                                  RATIO %    27   24 17   14   24 32   32   29 20 22 35   10        25    25   15   10 37    11   16 23    24 20 20 27   22 30 15   17

                   PRICE                                       PRICE
                                                                                                                                                               Source: Transcrime elaboration on Eurostat (2010) and OHIM (2013)
               LUXURY GOOD                               AVAILABILITY
                                                                                                                                                               II
                                                                                                                                                                    Linear correlation coefficient = 0.925, p≤0.01

                                             Source: Eurobarometer (2011) and OHIM (2013)
6. A demand-based
5. Measuring                                                                               estimate of the EU
counterfeit                                   Using seizures                               counterfeit markets
                                              or surveys to produce

markets                                       estimates?
                                                                                           • This study uses a demand-side
                                                                                             approach to estimate how much money
                                                                                             EU citizens currently and potentially
                                                                                                                                                                  are willing to buy (estimate 2)
                                                                                                                                                                  counterfeit products.

                                                                                             spend on the purchase of different types                          • These components make it possible to

                                              PROS
                                                                                             of counterfeit products.                                           consider the contextual propensity to
• Counterfeiting is a crime perpetrated on                                                                                                                      buy counterfeits in each country.
  multiple different markets. However,                                                      • It provides two types of estimates:
  most of the existing studies have either                                                                                                                    • The results are then multiplied by the
  focused on estimates of the counterfeit                                                        1. The actual expenditure                                      propensity to purchase a specific type of
  market as a whole, or they have                                                                2. The potential expenditure                                   counterfeit product.V This latter
  considered individual markets.                                                                                                                                adjustment makes it possible to include
                                              Seizures                                     • The first estimate is based on data on                              the market specific propensity of
• Previous research on counterfeiting has                                                    consumers who intentionally purchased                              consumers.
  mostly conducted on qualitative                                                            counterfeit articles in the last 12
  analyses of case studies and descriptive    ■ recorded by official sources                 months.32
                                                                                                                                                                  AEij= HCij * Ci * Pj
  analyses of impacts, actors, routes, and    ■ periodically available at country level
  the supply chain.25                                                                      • The second estimate focuses on the size                              PEij= HCij * PCi * Pj
                                                                                             of the potential demand, using data on
• A limited number of studies have            Surveys                                        consumers’ attitudes towards
                                                                                                                                                                  Where:
  developed quantitative estimates of the                                                    counterfeit products.33
  “size” or “magnitude” of the counterfeit                                                                                                                        AEij = actual expenditure on intentional
  markets.                                    ■ information on actual consumption          • Both estimates consider the demand of                                consumption of counterfeit products in country i for
                                                                                             a specific counterfeit market (see                                    market j
                                              ■ less biased by LEA activities                                                                                     PEij = potential expenditure on intentional
• However, there is no common definition       ■ comparable estimates across countries        below). The markets selected are those                               consumption of counterfeit products in country i for
  of which aspects of markets should be                                                      most vulnerable to counterfeiting.III                                market j
  considered. Estimates may focus on:                                                                                                                             HCij = total household consumption in country i of
                                                                                           • The final estimates for each country and                              market j
                                                                                                                                                                  Ci = percentage of actual consumers of counterfeit
 - Volume or value of the trade in                                                           each market are obtained by multiplying                              products in country i (actual contextual propensity)
   counterfeit goods;26                                                                      the data on total household                                          PCi = percentage of potential consumers of
 - Economic and social impact of this                                         CONS          consumptionIV by the share of people                                  counterfeit products in country i (potential contextual
                                                                                                                                                                  propensity)
   crime (losses or costs);27                                                               who have consumed (estimate 1) or who
                                                                                                                                                                  Pj = propensity to consume counterfeit products
 - Turnover of the traffickers;28                                                                                                                                   related to the type of product j (market specific
 - Consumers’ expenditure.29                                                                                                                                      propensity)
                                                                                           Markets considered
• Furthermore, there is a lack of
  agreement on the methodology with           Seizures
  which to estimate the size of counterfeit
  markets.                                                                                        Clothing                        Footwear                    Food and non-alcoholic beverages
                                              ■ affected by LEA operations and
                                                effectiveness
• Some studies adopt a demand-side
                                              ■ influenced by the detectability of the            Games, toys and hobbies                                 Information and communication technology
  approach, using data on consumer
                                                product
  surveys,30 whereas others focus on the
                                              ■ the location of the seizures may not                                                                                        Jewellery, clocks, watches
  supply of counterfeit products using                                                            Recording media                     Household appliances
                                                be the final destination of the products
  data on seizures.31
                                                                                                  Perfumes and articles for personal care                     Pharmaceutical products and medicaments
• Existing studies also differ in terms of
  the product categories considered.          Surveys
• This study aims at estimating the
  potential and actual expenditures of the    ■ representativeness of the samples          III
                                                                                                 In particular, sensitive products are identified on the       V
                                                                                                                                                                  The market specific propensity is calculated by taking
  aware consumers (secondary markets) of      ■ accuracy and honesty of the responses            basis of OHIM (2013), Eurobarometer (2011) and the               into account the ratio between the yearly illegal
                                                                                                 GTRIC-P index elaborated by the OECD (2008, p.                   average expenditure on a product and the yearly
  ten different markets in 28 EU Member                                                           124).                                                            legal average expenditure on the same product by a
  States using a demand-side approach.                                                                                                                            consumer. The data used pertain to a survey
                                                                                           IV
                                                                                                 Data on total household consumption are collected                conducted in Spain by ANDEMA (Asociación Nacional
                                                                                                 through Household Budget Surveys (HBSs)                          para la Defensa de la Marca, 2013). To the authors’
                                                                                                 conducted by Eurostat in 2010.                                   knowledge, this is the estimate of the illegal average
                                                                                                                                                                  purchases of each consumer by type of product.
7. The counterfeit                                                                                                                               Figure 4 - Total consumption and consumption of counterfeit products in the EU by types of products (%)

markets in Europe                                                                                                                                                                                 1%
                                                                                                                                                                                                    1%
                                                                                                                                                                                                                  1%
                                                                                                                                                                                            3%
                                                                                                                                                                                       4%
• At EU level, the largest counterfeit                                               • EU consumers privilege the                                                                 4%
  markets is food and beverage. It is                                                  consumption of certain types of fake
  estimated at 1.6 billion EUR for actual                                              articles. Indeed, the distribution of the                                             5%
  expenditure and 7.0 for potential                                                    total consumption of goods is different
  expenditure. Conversely, the smallest                                                from the distribution of the consumption
  market is represented by recording                                                   of counterfeit products (figure 4).
  media (0.2 and 1.0 million EUR if,                                                                                                                                    6%
  respectively, actual and potential                                                 • There are several and interrelated                                                                                Total
  expenditure are taken into account) (table 1).                                       reasons for the differences among                                                                               consumption
                                                                                       consumption distributions. For example:
• Summing all these markets, the total
  expenditure by EU citizens on                                                        - Products with higher prices have a                                                                                                                60%
  counterfeit productsVI is estimated at                                                 greater impact on the total expenditure
                                                                                                                                                                          15%
  9.0 billion EUR in terms of consumption,                                               (i.e. household appliances, information
  and 40.8 billion EUR in terms of potential                                             and communication technologies).
  demand.
                                                                                       - The higher the demand for a product,
                                                                                         the lower the probability that
• This corresponds respectively to 0.07%
                                                                                         consumers can satisfy it through the
  and to 0.32% of the EU GDP.
                                                                                         illegal market. Consequently, markets
                                                                                         with everyday consumption are more
• EU citizens who purchase counterfeit                                                                                                                                                                           3%
                                                                                         likely to have lower shares of                                                                          2%
  products spend 528 EUR per capita per
                                                                                         expenditure on counterfeits.                                                                  6%
  year.VII                                                                                                                                                                                                                         18%
                                                                                       - This dynamic also characterises
• In terms of shares of expenditure, food                                                markets with a lower elasticity of
  and beverages come first with around                                                    demand to prices (i.e. where lower
  18%, followed by household appliances                                                  prices do not correspond to a higher
  (16%), clothing (15%) and information                                                  number of products purchased).                                                  16%
  and communication technologies (15%).

                                                                                                                                                                                                      Consumption
                                                                                                                                                                                                           of
                                                                                                                                                                                                                                           15%
Table 1 – Expenditures for the total consumption and the counterfeit markets (million EUR)                                                                                                             counterfeits

                                                                                 Actual expenditure                    Potential expenditure
                     MARKETS                           Total consumption
                                                                                   on counterfeits                        on counterfeits
                                                                                                                                                                           15%
           Food and non-alcoholic
                                                            793,319                         1,581                                    6,986
                 beverages                                                                                                                                                                                                           10%
                      Clothing                              201,457                         1,325                                    5,964
          Perfumes and articles for                                                                                                                                                         6%
               personal care
                                                            78,306                           888                                     4,005                                                                             9%
           Pharmaceutical products
              and medicaments                               58,728                           853                                     3,973

                     Footwear                               57,619                           580                                     2,554
            Information and                                                                                                                                  Food and non-alcoholic                   Pharmaceutical products              Jewellery, clocks
                                                            55,839                          1,315                                    6,235
        communication technologies                                                                                                                           beverages                                and medicaments                      and watches
             Household appliances                           37,679                          1,429                                    6,494
                                                                                                                                                             Clothing                                 Footwear                             Recording media
        Jewellery, clocks and watches                       15,135                           563                                     2,533
                                                                                                                                                             Perfumes and articles                    Information and                      Games, toys and hobbies
                Recording media                             11,906                           195                                       952                   for personal care                        communication technologies
           Games, toys and hobbies                          10,828                           241                                     1,106
                                                                                                                                                                                                      Household appliances
                         TOTAL                            1,320,817                         8,967                                   40,803

VI
     Only for the products considered in this study.                   VII
                                                                             Under certain market conditions, i.e. if the price of the
                                                                             original product is too high, if it concerns luxury products, if
                                                                             the quality of the product does not matter, and if the original
                                                                             product is not available where they live (see OHIM, 2013, p. 46).
8. Counterfeit markets
at country level
                                                                                                   Map 2 - Counterfeit markets with the highest actual expenditure
                                                                                                   as % of GDP per each EU MS

• In most EU countries (10 out of 28),            information and communication
  counterfeit food and beverages are the          technology (0.03%) markets (figure 5).
  largest counterfeit market in terms of
  percentage of GDP. Household                   • In many markets, Cyprus registers the
  appliances and information technologies          highest percentages of GDP with respect
  are the markets most affected by                  to the other EU countries (clothing                                                                                                          FI
  counterfeiting in 6 out 28 MS (map 2).           (0.05%); household appliances (0.05%);
                                                   perfumes and articles for personal care
• The largest counterfeit market in                (0.03%); games, toys and hobbies
  Luxembourg is jewellery, clocks and              (0.01%)).
  watches, whereas in Cyprus and Spain it                                                                                                                                                       EE
  is clothing (map 2).                           • Counterfeit pharmaceutical products
                                                   and medicaments register the highest                                                                                     SE
• Lithuania presents the largest market of         percentages of the national GDP in
  counterfeit food and beverages as a              Bulgaria (0.09%), whereas jewellery,                                                                                                               LV
  percentage of GDP among all the other            clocks and watches do so in Luxembourg
  European countries (0.09%). The same             (0.02%).                                                 IE                                                DK
  country also registers the highest values
  at EU level for the footwear (0.03%) and       • Figure 6 summarises the results for each                                  UK                                                                  LT
                                                   country and each market.

                                                                                                                                                 NL

                                                                                                                                                                     DE                    PL
                                                                                                                                                BE
Figure 5 - EU MS with the highest actual expenditure on counterfeits as % of GDP by markets
                                                                                                                                                  LU
                                                                                                                                                                           CZ
                                                                                                                                                                                       SK
            1      2      3     4                         1     2      3     4                                                                                                   AT

                                                                                                                                     FR                                                                RO
                                                                                                                                                                                       HU
            LT - BG - RO - LV                             LT - CY - LV - MT
                                                                                                                                                                                      HR

            CY - LT - EL - ES                             BE - ES - LT - AT                                                                                                SI
                                                                                                                                                                      IT
                                                                                                                                                                                                      BG
             LT - CY - LV - RO                            CY - ES - LT - EL                            ES
                                                                                              PT

            CY - MT - LT - SI                             CY - EL - LT - BG                                                                                                                     EL

            BG - LT - LV - RO                             LU - ES - MT - CY

                                                                                                                                                                                MT

                                                                                                                                                                                                            CY
Figure 6 - Counterfeit markets per each EU Member States (actual expenditure in million EUR)

              Austria                                    Belgium                           Bulgaria                              Croatia                        Cyprus         Czech Republic                        Denmark

21.9                                      66.7                                     31.1                               16.8                              7.0                  23.6                            11.7
27.1                                      59.6                                     6.1                                7.8                               10.4                 15.5                            14.1
15.4                                      29.3                                     11.1                               8.0                               6.5                  14.8                            7.6
11.7                                      53.0                                     32.2                               8.3                               5.5                  14.5                            6.3
11.1                                      22.3                                     4.2                                5.1                               3.8                  7.3                             4.4
42.0                                      64.2                                     2.1                                3.2                               6.3                  25.6                            27.5
37.2                                      91.6                                     10.5                               7.4                               10.2                 30.6                            18.0
13.2                                      21.4                                     2.0                                0.6                               2.6                  7.3                             7.8
6.0                                       11.0                                     0.1                                0.2                               0.3                  2.0                             3.0
5.3                                       12.7                                     0.5                                0.1                               1.0                  4.0                             4.2

              Estonia                                 Finland                                France                            Germany                          Greece                Hungary                         Ireland

3.3                                       8.8                                      236.9                              130.7                             83.4                 10.5                            13.7
1.3                                       6.5                                      160.8                              129.6                             78.5                 4.3                             15.8
1.4                                       4.7                                      118.7                              76.5                              74.2                 4.8                             10.2
2.0                                       6.8                                      50.4                               96.3                              49.4                 12.3                            8.1
0.8                                       1.7                                      59.3                               46.7                              33.3                 2.7                             6.7
3.1                                       14.9                                     226.7                              191.6                             32.7                 4.2                             16.0
3.0                                       10.5                                     208.9                              165.6                             58.2                 7.1                             11.0
0.4                                       2.9                                      58.8                               74.5                              10.1                 0.7                             7.2
0.2                                       1.1                                      37.0                               32.5                              1.6                  0.3                             2.6
0.2                                       2.0                                      38.3                               24.1                              7.9                  0.6                             3.2

                 Italy                                Lavia                                Lithuania                          Luxembourg                         Malta              Netherlands                        Poland

195.8                                     10.8                                     25.4                               2.0                               1.6                  22.2                            69.0
156.8                                     5.1                                      14.3                               3.9                               1.3                  34.1                            35.1
91.6                                      5.0                                      9.0                                0.6                               1.2                  20.0                            40.7
140.1                                     10.7                                     20.6                               1.3                               1.5                  7.4                             62.1
74.4                                      3.4                                      9.7                                1.4                               0.7                  11.8                            21.0
71.9                                      4.7                                      9.4                                3.4                               1.6                  48.0                            36.0
99.2                                      4.6                                      9.0                                3.9                               2.3                  28.2                            44.2
46.6                                      1.3                                      3.3                                6.1                               1.0                  16.7                            9.6
21.8                                      0.3                                      0.6                                0.3                               0.1                  6.6                             2.6
19.8                                      0.6                                      1.2                                0.3                               0.1                  8.1                             5.0

               Portugal                              Romania                               Slovakia                            Slovenia                         Spain               Sweden                          United Kingdom

30.5                                      78.5                                     5.8                                7.5                               313.2                29.9                            122.3
20.4                                      19.9                                     3.1                                7.8                               313.6                28.5                            143.6
16.9                                      25.8                                     2.9                                4.6                               174.4                18.4                            93.6
50.0                                      49.6                                     3.9                                2.8                               103.0                14.6                            28.6
11.3                                      22.3                                     2.4                                3.7                               144.7                9.8                             53.9
15.3                                      8.0                                      2.7                                6.9                               252.5                33.1                            160.9
24.2                                      15.5                                     3.5                                10.5                              306.3                45.7                            161.7
4.9                                       3.6                                      1.2                                1.3                               165.2                11.8                            80.9
2.2                                       0.3                                      0.2                                0.4                               25.4                 3.3                             33.1
2.4                                       1.4                                      0.3                                0.8                               49.0                 5.7                             41.9

                                                                                                                                           Information and
           Food and non-alcoholic                          Perfumes and articles            Pharmaceutical products                        communication        Household    Jewellery, clocks   Recording             Games, toys
                                          Clothing                                                                            Footwear
           beverages                                       for personal care                and medicaments                                technologies         appliances   and watches         media                 and hobbies
Conclusions

• This study is one of the first attempts to                • First, the analysis is restricted to
  create a consolidated and comparable                        certain markets, and it only considers
  methodology to estimate the counterfeit                     the demand-side at retail level.
  markets in the EU Member States using
  a demand-based approach.                                  • Second, this methodology assumes that
                                                              the percentage of consumers who have
• These results provide a new perspective                     purchased or would be willing to
  in the analysis of counterfeit markets.                     purchase fake articles is constant with
                                                              each country.
• They show that the EU Member States
  are differently affected by this crime                    • Third, the market-specific propensity is
  and suggest that the counteracting                          calculated on the basis of a Spanish
  strategies should be targeted according                     survey and then extended to the other
  to the specific situation of each country.                  countries as well.VIII

• Furthermore, this study provides a                        • Future research should fill these gaps
  general overview of counterfeiting at EU                    by collecting more detailed data
  level, thus allowing identification of, and                 allowing more refined estimates.
  comparisons among, regional and
  sectorial patterns of this crime.                         • This will facilitate the detection of
                                                              differences in purchasing counterfeits
• Finally, the comparison between the                         among countries.
  actual and potential expenditure
  highlights that the counterfeit market                    • Better information can also be useful
  could grow further beyond the actual                        for effective risk assessments on the
  situation in all the EU Member States.                      most jeopardized product categories
                                                              and implement preventive measures.
• This is particularly worrying given the
  economic difficulties of several                          • In addition, targeted awareness
  European countries, which could boost                       campaigns could help consumers
  purchases of counterfeits at lower                          understand the potential harm of
  prices.                                                     counterfeit products. This especially
                                                              concerns products that may be
• However, the methodology used in this                       dangerous for consumers’ health, such
  study has some limitations, largely due                     as food and beverage, toys, perfumes
  to the limited availability of data.                        and cosmetics.

VIII
       To the knowledge of the authors, this was the only
       available information with which to determine a
       market-specific propensity.
15. WCO. 2014. “Illicit Trade Report 2013.” Brussels, Belgium: World Customs Organization. http://www.wcoomd.org/en/me-

Endnotes
                                                                                                                                 dia/newsroom/2014/june/~/media/W-
                                                                                                                                 CO/Public/Global/PDF/Topics/Enforcement%20and%20Compliance/Activities%20and%20Programmes/Illicit%20Trade%2
                                                                                                                                 0Report%202012/ILLICIT%202013%20-%20EN_LR2.ashx.; EU TAXUD. 2014. “Report on EU Customs Enforcement of
                                                                                                                                 Intellectual Property Rights. Results at the EU Border 2013.” Luxembourg: European Commission - Taxation and
                                                                                                                                 Customs Union. http://ec.europa.eu/taxation_customs/resources/documents/cus-
                                                                                                                                 toms/customs_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf.

1. OECD. 2009. “Magnitude of Counterfeiting and Piracy of Tangible Products: An Update.” Paris: Organisation for Economic    16. EU TAXUD. 2014. “Report on EU Customs Enforcement of Intellectual Property Rights. Results at the EU Border 2013.”
   Co-operation and Development. http://www.oecd.org/industry/ind/44088872.pdf.; Frontier Economics. 2011. “Estimating           Luxembourg: European Commission - Taxation and Customs Union. http://ec.europa.eu/taxation_customs/re-
   the Global Economic and Social Impacts of Counterfeiting and Piracy.” London, UK: International Chamber of Commerce           sources/documents/customs/customs_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf.
   (ICC) “Business Action to Stop Counterfeiting and Piracy” (BASCAP). http://www.iccwbo.org/Advocacy-Codes-and-Rules/-
   BASCAP/BASCAP-Research/Economic-impact/Global-Impacts-Study/.; BSA. 2012. “Shadow Market. 2011 BSA Global                 17. Ibid
   Software Piracy Study.” Washington, DC: Business Software Alliance. http://globalstudy.bsa.org/2011/downloads/-
   study_pdf/2011_BSA_Piracy_Study-Standard.pdf.; CENSIS. 2012. “L’impatto Della Contraffazione Sul Sistema-Paese:           18. For a literature review on surveys on consumers see Edelman Berland. 2013. “Intellectual Property Consumer Surveys -
   Dimensioni, Caratteristiche E Approfondimenti.” Roma: Ministero dello Sviluppo Economico.; ANDEMA. 2013. “La actitud          Literature Review.” Edelman Berland.
   del consumidor ante las falsificaciones.” Asociación Nacional para la Defensa de la Marca.
                                                                                                                             19. Eurobarometer. 2011. “Internal Market: Awareness, Perceptions and Impacts.” Special Eurobarometer 363. European
2. Calderoni, Francesco, Serena Favarin, Lorella Garofalo, and Federica Sarno. 2014. “Counterfeiting, Illegal Firearms,          Commission. http://ec.europa.eu/public_opinion/archives/ebs/ebs_363_en.pdf.
   Gambling and Waste Management: An Exploratory Estimation of Four Criminal Markets.” Global Crime 15 (1-2): 108–37.
   doi:10.1080/17440572.2014.883499.                                                                                         20. Eurobarometer. 2011. “Internal Market: Awareness, Perceptions and Impacts.” Special Eurobarometer 363. European
                                                                                                                                 Commission. http://ec.europa.eu/public_opinion/archives/ebs/ebs_363_en.pdf.
3. Transcrime. 2013. “Gli investimenti delle mafie.” Linea 1. Roma: Transcrime. http://investimentioc.it/index.htm.;
   Calderoni, Francesco. 2014. “Mythical Numbers and the Proceeds of Organised Crime: Estimating Mafia Proceeds in           21. Ibid
   Italy.” Global Crime 15 (1-2): 138–63. doi:10.1080/17440572.2014.882778.; Calderoni, Francesco, Serena Favarin, Lorella
   Garofalo, and Federica Sarno. 2014. “Counterfeiting, Illegal Firearms, Gambling and Waste Management: An Exploratory      22. OHIM. 2013. “European Citizens and Intellectual Property: Perception, Awareness and Behaviour.” Alicante, Spain: Office
   Estimation of Four Criminal Markets.” Global Crime 15 (1-2): 108–37. doi:10.1080/17440572.2014.883499.                        for Harmonization in the Internal Market.

4. Savona, Ernesto Ugo, and Michele Riccardi, eds. 2015. From Illegal Markets to Legitimate Businesses: The Portfolio of     23. Ibid
   Organised Crime in Europe. Trento: Transcrime - Università degli Studi di Trento. http://www.transcrime.it/wp-con-
   tent/uploads/2015/04/ocp.pdf.                                                                                             24. Ibid

5. OECD. 2009. “Magnitude of Counterfeiting and Piracy of Tangible Products: An Update.” Paris: Organisation for Economic    25. UNICRI. 2007. “Counterfeiting: A Global Spread, a Global Threat.” Turin, Italy: United Nations Interregional Crime and
   Co-operation and Development. http://www.oecd.org/industry/ind/44088872.pdf.                                                  Justice Research Institute. http://www.unicri.it/news/article/0712-3_counterfeiting_crt_foundation.; Transcrime. 2010a.
                                                                                                                                 “Anti Brand Counterfeiting in the EU: Report on Best Practices.” Milan: European Commission. http://www.gacg.org/Con-
6. Europol, and OHIM. 2015. “2015 Situation Report on Counterfeiting in the European Union.” Europol & Office for Harmoni-       tent/Upload/Documents/Transcrime_Report%20Best%20Practices_Project%20FAKES.pdf.; Transcrime. 2010b. “Anti
   zation in the Internal Market. https://oami.europa.eu/ohimportal/documents/11370/80606/2015+-                                 Brand Counterfeiting in the EU: Report on International and National Existing Standards.” Milan: European Commission.
   Situation+Report+on+Counterfeiting+in+the+EU.                                                                                 http://www.gacg.org/Content/Upload/Documents/Transcrime_Report%20Existing%20Standards_Project%20FAKES.pdf.

7. UNODC. 2010. “The Globalization of Crime. A Transnational Organized Crime Threat Assessment.” Vienna, Austria: United     26. Frontier Economics. 2011. “Estimating the Global Economic and Social Impacts of Counterfeiting and Piracy.” London, UK:
   Nations Office on Drugs and Crime. http://www.unodc.org/documents/data-and-analysis/tocta/TOC-                                International Chamber of Commerce (ICC) “Business Action to Stop Counterfeiting and Piracy” (BASCAP). http://www.ic-
   TA_Report_2010_low_res.pdf.; WCO. 2014. “Illicit Trade Report 2013.” Brussels, Belgium: World Customs Organization.           cwbo.org/Advocacy-Codes-and-Rules/BASCAP/BASCAP-Research/Economic-impact/Global-Impacts-Study/. OECD.
   http://www.wcoomd.org/en/media/newsroom/2014/june/~/media/W-                                                                  2009. “Magnitude of Counterfeiting and Piracy of Tangible Products: An Update.” Paris: Organisation for Economic
   CO/Public/Global/PDF/Topics/Enforcement%20and%20Compliance/Activities%20and%20Programmes/Illicit%20Trade%2                    Co-operation and Development. http://www.oecd.org/industry/ind/44088872.pdf.
   0Report%202012/ILLICIT%202013%20-%20EN_LR2.ashx.; EU TAXUD. 2014. “Report on EU Customs Enforcement of
   Intellectual Property Rights. Results at the EU Border 2013.” Luxembourg: European Commission - Taxation and Customs      27. Hoorens, Stijn, Priscilla Hunt, Alessandro Malchiodi, Rosalie Liccardo Pacula, Srikanth Kadiyala, Lila Rabinovich, and
   Union. http://ec.europa.eu/taxation_customs/resources/documents/cus-                                                          Barrie Irving. 2012. “Measuring IPR Infringments in the Internal Market. . OHIM. 2015. “The Economic Cost of IPT
   toms/customs_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf.                                               Infringement in the Clothing, Footwear and Accessories Sector.” Office for Harmonization in the Internal Market.
                                                                                                                                 https://oami.europa.eu/tunnel-web/secure/webdav/guest/docu-
8. UNODC. 2010. “The Globalization of Crime. A Transnational Organized Crime Threat Assessment.” Vienna, Austria: United         ment_library/observatory/resources/research-and-studies/ip_infringement/study2/the_economic_cost_of_IPR_infringe
   Nations Office on Drugs and Crime. http://www.unodc.org/documents/data-and-analysis/tocta/TOC-                                ment_in_the_clothing_footwear_and_accessories_sector_en.pdf.
   TA_Report_2010_low_res.pdf.; Europol, and OHIM. 2015. “2015 Situation Report on Counterfeiting in the European
   Union.” Europol & Office for Harmonization in the Internal Market. https://oami.europa.eu/ohimportal/docu-                28. Calderoni, Francesco, Serena Favarin, Lorella Garofalo, and Federica Sarno. 2014. “Counterfeiting, Illegal Firearms,
   ments/11370/80606/2015+Situation+Report+on+Counterfeiting+in+the+EU.                                                          Gambling and Waste Management: An Exploratory Estimation of Four Criminal Markets.” Global Crime 15 (1-2): 108–37.;
                                                                                                                                 Savona, Ernesto Ugo, and Michele Riccardi, eds. 2015. From Illegal Markets to Legitimate Businesses: The Portfolio of
9. Ibid                                                                                                                          Organised Crime in Europe. Trento: Transcrime - Università degli Studi di Trento. http://www.transcrime.it/wp-con-
                                                                                                                                 tent/uploads/2015/04/ocp.pdf.
10. EU TAXUD. 2014. “Report on EU Customs Enforcement of Intellectual Property Rights. Results at the EU Border 2013.”
    Luxembourg: European Commission - Taxation and Customs Union. http://ec.europa.eu/taxation_customs/re-                   29. Ledbury research. 2007. “Consumer Survey: Clothing and Footwear Sector.” Alliance Against IP Theft. http://www.wi-
    sources/documents/customs/customs_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf.                         po.int/ip-outreach/en/tools/research/details.jsp?id=689.; ANDEMA. 2013. “La actitud del consumidor ante las falsifica-
                                                                                                                                 ciones.” Asociación Nacional para la Defensa de la Marca.
11. Ibid
                                                                                                                             30. ANDEMA. 2013. “La actitud del consumidor ante las falsificaciones.” Asociación Nacional para la Defensa de la Marca.;
12. Europol, and OHIM. 2015. “2015 Situation Report on Counterfeiting in the European Union.” Europol & Office for Harmo-        Savona, Ernesto Ugo, and Michele Riccardi, eds. 2015. From Illegal Markets to Legitimate Businesses: The Portfolio of
    nization in the Internal Market. https://oami.europa.eu/ohimportal/documents/11370/80606/2015+-                              Organised Crime in Europe. Trento: Transcrime - Università degli Studi di Trento. http://www.transcrime.it/wp-con-
    Situation+Report+on+Counterfeiting+in+the+EU.                                                                                tent/uploads/2015/04/ocp.pdf.

13. EU TAXUD. 2014. “Report on EU Customs Enforcement of Intellectual Property Rights. Results at the EU Border 2013.”       31. OECD. 2009. “Magnitude of Counterfeiting and Piracy of Tangible Products: An Update.” Paris: Organisation for Economic
    Luxembourg: European Commission - Taxation and Customs Union. http://ec.europa.eu/taxation_customs/re-                       Co-operation and Development. http://www.oecd.org/industry/ind/44088872.pdf.
    sources/documents/customs/customs_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf.
                                                                                                                             32. OHIM. 2013. “European Citizens and Intellectual Property: Perception, Awareness and Behaviour.” Alicante, Spain: Office
14. OECD. 2009. “Magnitude of Counterfeiting and Piracy of Tangible Products: An Update.” Paris: Organisation for Econom-        for Harmonization in the Internal Market.
    ic Co-operation and Development. http://www.oecd.org/industry/ind/44088872.pdf.
                                                                                                                             33. Ibid
You can also read