And why not. Consider this: l It is estimated that counterfeiting represents between five to seven per cent of all world trade or an estimated $200 billion a year.
In the first four months of the present year, Gillette has seized more counterfeit products than it had done in the past two years combined. l In India, P&G estimates that 54 out of every 100 Vicks Action 500 are lookalike.Losses from counterfeiting now account for as much as 20 per cent of total sales revenues for most famous foreign-invested companies. Lost revenues of some companies are estimated as follows: Procter & Gamble ($150 m), Nike ($70m), Unilever ($24m), Gillette ($20m), Bestfoods ($6m) and Johnson & Johnson ($15m).
Closer home, in a pilot research study conducted by AC Nielsen with a sample of 30 FMCG companies, it was established that all 30 companies faced a problem of counterfeit products. However, popular brands had upto 20 lookalikes in the market. The pilot study indicated an annual loss of Rs 1,700 crore per annum to manufacturers and over Rs 600 crore loss to government.
According to Mr Ashok Chabra, executive director, Procter & Gamble, in an estimated Indian FMCG market of Rs 6000 crores, the annual loss of sales due to counterfeit products was approximately Rs 1700 crore. Therefore, he estimated that the government incurs revenue losses of Rs 1,200 crore - assuming sales tax at 10 per cent, excise at 15 per cent, octroi at 2 per cent and income tax at 45 per cent on PBT. The top brands were losing 10 per cent of their business to counterfeit products. FICCI and CII have different ways of dealing with counterfeiting. Ficci has set up a special Brand Protection Committee (BPC). CII plans to form a core group drawn from the industry and government agencies. The CII core group will come up with an umbrella strategy on counterfeiting. This will cut across industries. At another level, CII will look into the problems of specific segments. The core group is to be formed in a few days. It will take up matters of policy, implementation and enforcement. It will interact with thegovernment. There are plans to conduct training workshops for judges so as to educate them on the new and latest laws on intellectual property.
Armed with the first-mover advantage, Ficci's brand protection committee has already got companies such as P&G, HLL, Colgate, Marico, Smithkline Beecham, Coca-Cola, PepsiCo, Brittania, ISPL (Gillette) as its members. It also has members from the Indian music industry. ``The committee's mission is to collaborate with government authorities, industry and trade associations, companies, consumer bodies," says Bharat Patel, chairman of the committee.
It remains to be seen which companies join the CII's initiative which is still in its infancy. As an automobile industry observer says: at the end of the day both are working for the same cause and voicing the common concerns of industry. In its first initiative aimed at generating awareness about the subject, Ficci's brand protection committee (BPC) realising the value of the Net to bring about consumer awareness on counterfeiting, launched a website, www.fake-busters.com, last week. The site aims to spread awareness on the subject, provide actionable information to all the stakeholders, facilitate making of on-line complaints and reporting of counterfeit products, and above all, enroll consumers and authorities in the fight against counterfeiting. Though still under construction, the website is already trying to create a pull by offering gifts for every authentic sighting of a counterfeit! The initiative, says Mr Bharat Patel, chairman BPC and P&G, is in line with the four-fold strategy adopted by theBPC: