There has been a shift in the nature of organised crime in Europe due to the recession, according to Europol’s most recent serious and organised crime threat assesment. Namely through the selling and distribution of counterfeit goods in the EU. There has been an expansion in this illicit sector due to reduced consumer spending. Furthermore, it is not just luxury brands that are imitated in the process according to the Europol report.
“OCGS now also counterfeit daily consumer goods such as detergents, food stuffs, cosmetic products and pharmaceuticals”.
Between 2011 and 2012, the amounts of goods seized increased from 1.1 billion to 1.2 billion. However what was even more startling was the type of counterfeits that were now being smuggled. The product category that included food and beverages, body care items, medicine, electrical household items and toys had almost doubled on the charts in that year period. It now accounted for a much higher percentage of counterfeit goods. The amount of goods that accounted for these had increased from 14.5% to 28.6%.
Europol have discussed the implications that such a crime has on the Business sector. “counterfeit goods not only cause losses of billions of euros in unpaid duties and taxes, but also reduce the sales volumes, profits and investments of legitimate business”.
However the EU law enforcement agency also brought attention to a more harrowing topic, the negative health effects that poorly manufactured items can have upon users.
“Counterfeit products cause significant harm to the health and safety of consumers and even cause fatalities”.
According to the organisation, the illicit manufacture of medicines can lead to worsening conditions for convalescents.
“Counterfeit medicines can prevent effective treatment or exacerbate existing conditions and diseases”.
What was more shocking in the report was the negative effects detailed as a result of counterfeit luxury brands and even handbags and shoes.
During the count down to christmas, €250,000 worth of fake UGG boots and Jimmy Choo shoes were seized from a warehouse in Middleton in Cork.
At the time, the Irish revenue commission warned against the effects of poorly produced counterfeits.
“At best, fake goods do not deliver the expected and promised results of genuine products, while at worst they can seriously injure consumers.”
Counterfeit Vodka was outlined as the main concern for Irish consumers.
“Counterfeit vodka is a particular concern”, it said as high levels of methanol are frequently detected in seized products.
Almost 900 litres of counterfeit alcohol were confiscated on 12 separate occasions in 2013.
“Harmful levels of formaldehyde were found in counterfeit clothes and an analysis of counterfeit running shoes revealed illegal amounts of phtalates and Mercury”.
It was once reported by the BBC that “They use horse urine,” as a substitute in counterfeit perfumes.
Another common illicit good according to Europol was untested pesticide that was sourced in china. While this illustrates the growing difficulty for European famers in the economic climate, the pesticide can have a severe effect on the climate and upon the environment as well as on the user.
“Counterfeit pesticides mainly from china have the potential to cause serious damage to the environment and significant harm to the end consumer”.
At the NFU conference in Birmingham this year, Gerd Sonnleitner, Copa President voiced concerns over the economic position of Europe’s farmers. However Mr Sonnleitner outlined nonetheless that farmers will be required to manage with less subsidy support while meeting high production standards.
And even more worrying is the fact that sometimes these counterfeit goods can circulate their way into the legitimate market. Even products as crucial as medicine have been imitated and have circulated among the legitimate supply.
“Counterfeit health products are predominantly distributed via illicit online pharmacies, but in some cases counterfeit products also infiltrated the legitimate supply chain”.
Closer to home the BBC once reported an incident in Leicester where “Tens of thousands of bottles of dangerous fake vodka ended up in shops across the UK following a ‘sophisticated’ counterfeit operation”.
The issue has also facilitated the illegal immigration and exploitation of workers in order to keep up with the growing demand for cheaper produce. “Growing demand for cheap products and services simulates the expansion of a shadowy economy in which migrant labour is exploited”.
According to Europol, levels of ‘intra-EU trafficking are escalating’ and ‘The economic crisis has increased demand on the illegal labour market, which is exploited by ‘OCG’S’.
There was also a significant increase in emigrants who attempted to cross legal borders.
In responses to the issue Europol has stated how there was a ‘high tolerance towards the purchase of counterfeit goods including luxury items such as handbags and sunglasses, despite a low social tolerance for counterfeit pharmaceutical goods’. They assessed the fact that many OCG’s turned to the distribution of counterfeit goods because it was a ‘low risk but high profit’ crime. There are currently an estimated 3600 international organised crime groups active in the EU.
Europol concluded however that ‘the demand for counterfeit goods in general will remain buoyant’.