Consumer companies face global rise in counterfeit goods

NEW YORK — Consumer companies are fighting a growing global trade in counterfeit goods that is hurting their sales.

As global trade booms and free-trade zones grow, international crime syndicates are finding it easier to ship a wider variety of spurious products across borders. Counterfeiting has traditionally been a problem that companies faced in Asian markets, and counterfeiters tended to set their sights on luxury products like designer handbags. But fake versions of everyday consumable products — ranging from toothpaste to cigarettes — have now begun to make their way to developed and other markets around the world.

A June report by the Organization for Economic Co-operation and Development found that the global rise in counterfeiting has been accompanied by a notable divergence from high-value luxury items to common products that affect personal health and safety. Counterfeiters have begun targeting products like food and drink, medical equipment, personal-care items, toys, tobacco and automotive parts, the OECD found.

Government and anti-counterfeiting organizations estimate that counterfeit goods overall cost U.S. companies between $200 billion to $250 billion in revenue per year. Counterfeiting and piracy globally result in lost sales of $500 billion to $600 billion a year, which is about 5 percent to 7 percent of global trade, said Katie Wilson, a spokeswoman at the global anti-counterfeiting and piracy initiative of the U.S. Chamber of Commerce.

Counterfeit products also cost governments lost revenue in taxes. And there are other fallouts. Consumers are often willing to buy a fake Louis Vuitton handbag if it saves them a few hundred dollars, but counterfeit goods that are consumed in some form can be far more dangerous — they can potentially harm both consumers and product brands.

"Counterfeiting is no longer an issue about fake watches and handbags," said Bill Dobson, a spokesman for Bascap, or Business Action to Stop Counterfeiting and Piracy, an organization started by the International Chamber of Commerce. "This is now a problem on a global scale that is posing health and safety issues."

In recent weeks, one case highlighted the problem of counterfeiting in the United States: Colgate-Palmolive Co. said in mid-June that counterfeit toothpaste falsely packaged as "Colgate" and possibly containing harmful ingredients was found in several discount stores in four U.S. states.

When consumer products that could have harmful side effects are counterfeited, consumers may become reluctant to buy the product, said Alan Siegel, chairman of strategic branding firm Siegel & Gale. "It's a commodity market; there are 15 alternatives you can buy," he said.