How to protect FMCG from counterfeiters – Luxury brands are not the only targets of counterfeiters
31 Dec 2018
Counterfeiting is a practice where goods, which are generally of an inferior quality, are manufactured and sold as an imitation of the intellectual property rights of another, without their permission. This in turn results in consumers buying a fake product under the impression that it is genuine. The trade in counterfeit goods has in fact become as profitable as trading in drugs and illegal narcotics and as an added benefit to counterfeiters, it bears less risks.
It is common knowledge that counterfeiting largely affects luxury goods; however, this is proving to be an outdated line of thought as South Africa has in recent months been hit by a spike of counterfeit fast-moving consumer goods (FMCG).
Africa is often viewed as the dumping ground of counterfeit goods and there is a perturbing increase in counterfeit FMCG such as milk, tinned fish, polish, sweets, rice, maize meal and biscuits, just to name a few. FMCG are sold quickly and at relatively low retail prices and the sale thereof ranges from large wholesalers, retailers to street vendors.
Statistics show that over 15% of the most counterfeited brands in the world are FMCG brands. The main concern is the health and safety risks posed to unsuspecting consumers. As is the case with most countries, the South African local market also experiences its fair share of counterfeit imports . It is therefore vital that FMCG brand owners are aware of this and that they take the necessary steps to protect their brands as well as consumers from the knock-offs of their products from reaching the market. This will not only ultimately save them money but it will also protect their image and brand reputation.
The counterfeit trade in South Africa is linked to syndicates operating in China, Pakistan, India, Israel and Afghanistan. It is thus imperative for brand owners to be proactive and take the necessary measures to protect their goods and reputation.
Section 15(1) of the Counterfeit Goods Act (37 of 1997) entitles an owner of intellectual property [trade marks and copyright] to apply to the South African Revenue Services (SARS) Commissioner to detain and seize goods incorporating their intellectual property rights during a specified period; thus, assisting with the protection of the rights for that period – this application is referred to as a Section 15 Application and is renewable every two (2) years.
FMCG are rapidly becoming more popular than luxury goods in counterfeiting circles, counterfeiters are always looking for new ways to infiltrate the multi-million Rand FMCG industry. Any recognizable brand is at risk of being counterfeited, every brand owner should therefore ensure that their anti-counterfeiting strategies are ready to take on those dealing in counterfeit goods.
The Counterfeit Goods Act is also a quick and effective tool when dealing with trade mark and/or copyright infringement and as such the Section 15 application serves as prima facie evidence against counterfeiters in civil and/or criminal proceedings. This is a sure way of achieving the desired results.
The war against counterfeiters is ongoing and may never end, however, brand owners must equip themselves with the necessary tools that are afforded to them in South African law. A collaborative approach between brand owners, with the assistance of intellectual property attorneys, the Environmental Health Practitioners Inspectorate, law enforcement agencies, SARS and industry organizations such as the Consumer Goods Council of South Africa and the National Consumer Commission, working together with the goal of ridding the streets of South Africa of counterfeit goods, is key.
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