The International Authentication Association (IAA) has urged manufacturers of branded goods to continue and even increase their investment in anti-counterfeiting strategies and technologies, and not to cut back their efforts in an attempt to save costs during the current economic downturn.
According to IAA chairman David Howard, whereas companies will inevitably be taking a hard look at their all their costs, combating counterfeits is an effective way to maintain turnover and market share.
"The temptation to cut back is obvious", said Howard, who is Director of Product Protection at Johnson & Johnson, "with consumer spending falling, sales are suffering - particularly for producers of high value, luxury or non-essential items."
Such manufacturers are already under pressure from higher energy, labour, materials and financing costs and for some an automatic reaction will be to compensate by cutting expenditure wherever possible – with investment in authentication technologies that help prevent counterfeits and maintain brand integrity a likely candidate.
Estimates of the losses due to counterfeiting vary – from $200 billion per year (OECD) to $600 billion per year (the Progressive Policy Institute). According to the international Chamber of Commerce (ICC), counterfeiting is responsible for 5-7% of world trade and affects every sector of manufacturing.
However, the economic slowdown is also likely to lead to an increase in illegal activity including counterfeiting, with economic hardship being a recipe for increased criminality.
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