East Asian counterfeit goods worth as much as drug trade

Posted on 17 Apr 2013 by Tim Brown
These counterfeit goods were seized by Border Force in November 2012.
These counterfeit goods were seized by Border Force in November 2012.

The UN Office on Drugs and Crime (UNODC) has estimated the value of counterfeit goods and medicines from East Asia and the Pacific region are worth as much as the area's illicit drug trade.

UNODC today released an assessment of organised crime in the East Asia and the Pacific (EAP) region which it says is worth a total of $90bn per annum.

Drug trafficking accounts for an estimated one third of the value of transnational organised crime but an equal third ($24.4bn) are related to counterfeit goods and another $5bn to fraudulent medicines.

High levels of demand for counterfeit products in many different parts of the world, including the UK and Europe, coupled with the region’s growing economy and ability to meet this demand, has been a driver for the growth of counterfeiting.

But the assumption that counterfeit goods are made exclusively without the knowledge of the legitimate designers and manufacturers is incorrect according to journalist Roberto Saviano, author of the Italian bestselling book Gomorrah.

In his book, published in 2006, he alleges that shady businessmen actually broker production of legitimate and illegitimate garments on behalf of some of the most exclusive ‘made in Italy’ labels.

Using the Italian fashion industry as an example, he alleges that representatives from the fashion houses meet with businesses in the Naples area and present the garments for manufacture.

The businesses then tender for the contract. Although usually one factory is chosen, other factories often also commence work on the same project if they believe they can make the same garments at the same price and in the same time.

The fashion houses then send the materials to all the factories that want to work on the contract (generally cheap Chinese fabrics). The first factory to deliver the finished garments to the desired standard ‘wins’ and is paid.

The unsuccessful factories then sell off the products as counterfeits, even though they have been turned out by the very same skilled hands and using the same materials as the real items.

An extract from the book reads: ‘Not only is the workmanship perfect, but the materials are exactly the same, either bought directly on the Chinese market or sent by the designer labels to the underground factories participating in the auctions.’

‘This means that the clothes made by the clans aren’t the typical counterfeit goods, cheap imitations, or copies passed off as the real thing, but rather a sort of false-true. All that’s missing is the final step: the brand name, the official authorisation of the motherhouse. But the clans usurp that authorization without bothering to ask anybody’s permission…’

According to the book, designer labels have been slow to protest for fear of losing access to factories in both Europe and Asia, transportation systems, and many retail outlets around the world, all of which are controlled or influenced by Camorristi.

The Manufacturer tried to speak to the UNODC regarding this practice but they were unavailable for comment at the time of publication.