- Counterfeit more readily available
- Cash-strapped consumers across the globe are targeted
- Birmingham pips London as most expensive place in the UK to buy counterfeit
Counterfeit products are more easily available and cheaper compared to four years ago, according to KPMG’s Counterfeit Christmas Index. The research found that in almost half the cities surveyed counterfeiters were undercutting genuine product prices by 80 per cent or more highlighting real concerns of lost revenue for brand owners.
KPMG global research across 20 cities* finds that shoppers continue to be tempted by counterfeit products which are offered at a fraction of the real product price across the UK and abroad.
KPMG’s mystery shoppers ‘window shopped’ for the counterfeit price of desirable items such as watches, CD’s, console games, DVD’s, polo shirts, replica football kit, sunglasses, trainers, jeans and the all-important “it” bag.
Counterfeit ‘hot spots’
According to the research, discounts for fakes were highest in Istanbul closely followed by Tel Aviv, Dubai and Hong Kong. In mainland Europe the average discounts were high but did not vary widely:
- Birmingham 70 percent
- Milan 71 percent
- London 74 percent
- Madrid 77 percent
- Athens 76 percent
- Lisbon 79 percent
David Eastwood, global and UK head of KPMG’s intellectual property and contract governance practice, said:
“The retail industry in the UK and abroad is facing pressure on many fronts. The last thing retailers need is easier availability of heavily discounted counterfeit product. With consumers short of cash, some are bound to be tempted to stray. Customs and companies alike should ensure their anti-counterfeiting strategies are bolstered to counteract the threat. Equally, all consumers should be aware of the social risks and health costs, sometimes life threatening, that counterfeit products and the counterfeiters create.”
Hard times for retailers
Discounts have increased since 2007. In six of the seven cities in the survey in 2007 counterfeit products are relatively cheaper in 2011 as are six of the eight product types surveyed in 2007. The highest discounts are typically found in countries where counterfeit is most readily available. On the face of it therefore, bigger discounts – ie relatively cheaper counterfeit – indicates the increasing availability of fakes.
The exceptions to this pattern were watches and trainers, and counterfeits generally in New York. This may reflect better enforcement by brand owners and law enforcement in these areas.
Counterfeiters broaden their offering with accessories
Counterfeiters make the most of accessories, selling counterfeit sunglasses, lipsticks and perfume to offer consumers the full designer makeover. Sunglasses were heavily discounted by 92 percent whereas lipsticks and perfumes by only 52 percent and 61 percent respectively.
High versus low discounts on counterfeit goods
Discounts on most counterfeited products remain high. Counterfeit camera memory cards and disposable batteries were the least discounted products that we surveyed and bags and watches the most at 94 percent. Camera cards were only discounted by 36 percent and disposable batteries by 40 per cent. As with lipstick and perfumes this might be because they are consumables rather than collectables like handbags, watches and sunglasses.
Birmingham knocks off London as most expensive place to buy counterfeit
For the first time the survey includes Birmingham, which moves straight to the top of the list as the most expensive place in the survey to buy counterfeit product. London drops three places to fourth on this measure with San Francisco (second) and Milan (third), both new entrants and both pricier than London for counterfeit.
David Eastwood concludes: “While counterfeit products may be enticing, particularly in these tough economic times, consumers really need to be aware of the risks. Counterfeit sunscreens, sunglasses, perfumes and batteries may seriously damage your health. Even if the health warnings aren’t enough of a deterrent, there is also a risk that wallets may suffer too. Some EU countries have fined consumers when caught buying fake goods.”
“The UK has taken a softer approach of educating consumers, rather than criminalising them. However, counterfeit goods are still classified as “banned goods” by UK Customs, can be confiscated and brand owners can prosecute. Therefore ‘Buyer beware’ should be firmly in the mind of any tempted consumer.”
- Ends -
For further information please contact:
Mike Petrook, KPMG Corporate Communications
Tel: 0207 311 5271 Mobile: 07917 384 576 Email: mike.petrook@kpmg.co.uk
KPMG Press Office: 0207 694 8773
Notes to editors:
European Court of Justice ruling – 12 July 2011
*KPMG’s Counterfeit Index considers the prices of counterfeit goods in 2011 across 20 cities and includes a basket of 18 products.
The availability of these products was tested across the world by a team of KPMG researchers. In calculating the average discount for each product category, we only included products, which were found in at least 16 of the 20 cities surveyed.
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
