Govts in EU lose €15b a year to counterfeiting

Governments across the EU lose up to EUR 15 billion per year in total due to the presence of counterfeit goods in the marketplace through reduced direct and indirect taxes, as well as social contributions which are not paid by illegal manufacturers, according to a new report released by the European Union Intellectual Property Office (EUIPO) on Wednesday.

The economic and social damage caused by counterfeiting deprives governments of revenue and can support serious crimes like drug trafficking and money laundering, said the EUIPO in a press release.

In addition, according to EUIPO’s estimation, up to EUR 19 billion of sales are lost every year in the EU by the cosmetics and personal care sector, the wine and spirits sector, the pharmaceutical sector and the toys and games sector due to counterfeiting.

Lost sales in the cosmetics and personal care sector in particular have increased by over EUR 2.5 billion since the last such analysis was published by the EUIPO in 2019 – the highest increase across the sectors studied.

About 14.1% of the cosmetic and personal care sector’s sales turnover (EUR 9.6 billion) is lost annually across the EU due to the presence of counterfeit products. In Finland, that figure stands at 10.4%.

Research carried out by the EUIPO and Europol also reveals the links between counterfeiting and other serious crimes.

Since 2016, law-enforcers across the EU have carried out 29 major anti-counterfeiting and piracy operations, targeting organised gangs which were also involved in other serious crimes including drug-trafficking and money-laundering.

“Counterfeiting is not a victimless crime. Fake products take sales away from legitimate businesses, and deprive governments of much-needed revenue. They carry clear health and safety risks for those who use them. But as our joint work with Europol shows, the proceeds from counterfeiting can also support serious organised crime. To fully tackle this, concerted international action is needed at all levels,” said EUIPO Executive Director Christian Archambeau.