Two new studies of the Office for Harmonisation in the Internal Market (OHIM) show that counterfeit jewellery and wristwatch sales in EU member states have steadily decreased by 13.5%. Sales of counterfeit hand bags and travel bags have decreased by 12.7%.
Losses caused by counterfeit products in both sectors mean 27,000 lost jobs, because manufacturers are forced to hire fewer employees.
In addition these losses, the total decline of budget revenue is estimated ad EUR 1.1 billion in both sectors in the EU. Losses to the state budget are made up of non-paid taxes like VAT, social fees and PIT.
OHIM Antonia Campinos emphasizes that jewellery, wristwatches, hand bags and travel bags are manufactured in the EU mainly by small companies that employ ten or fewer people. Most of those companies suffer major losses due to counterfeit goods.
The study estimates that sales of jewellery and wristwatches in Latvia suffer losses of 14.7% (EUR 5 million). The situation in Lithuania is very similar to Latvia. Sales in Estonia suffer losses of 12.9% (EUR 3 million).
The situation with sales of hand bags and travel bags in Latvia shows a decline of 27.8% (EUR 4 million). A comparison of relative indexes shows that the situation in Latvia is one of the worst in the EU.
More than half of hand bags and travel bags produced in EU are made in Italy (the sector’s volume was EUR 6.5 billion in 2012). Italy provides 40% of exports and 35% of jobs in this sector in the EU. Counterfeit products cause losses worth EUR 520 million to the Italian market. It is also one-third of the lost trade volume in the EU. Italy is one of the largest producers of jewellery in the EU. Italy suffers losses worth approximately EUR 400 million annually due to counterfeit goods.
«Unfortunately, Latvia’s hand bag market suffers from counterfeit products significantly. Big brand products are counterfeited the most. As mentioned in the study, companies suffer millions worth of losses. People buy counterfeit products and this only increases the criminals’ desire to keep producing them. It is clear to me why this happens. People want to acquire good quality products, but most of the time they cannot afford them. Counterfeit products cost less but look almost identical the real deal. Designer products are classified as items of luxury. By buying counterfeit goods, the buyer makes it look like he or she can afford such things. Unfortunately, counterfeit products are usually of very poor quality. Not only does this practice hurt producers, it also supports illegal activities,» – says designer Iveta Semenova.