The European Union (EU) faces an increasingly pressing issue as counterfeit goods continue to cost the clothing, cosmetics, and toy industries a staggering EUR 16 billion in sales and nearly 200 000 jobs each year. This was highlighted in a study by the European Union Intellectual Property Office (EUIPO) which reveals the deep economic impact of fake products on these sectors and the serious health and safety issues they pose to consumers.
Alarming impact of counterfeits on clothing, cosmetic, and toy industries
The clothing industry bears the brunt of this illegal activity, losing close to EUR 12 billion in annual sales, which corresponds to 5.2 % of the sector’s overall turnover. The cosmetics and toy industries are also severely impacted, incurring losses of EUR 3 billion (4.8 % of sales) and EUR 1 billion (8.7 % of sales), respectively.
The study, drawing on data from 2018-2021, found that counterfeit goods not only affect sales but also lead to significant job losses. The clothing sector alone with an estimated reduction of 160 000 jobs, with the cosmetics and toy sectors losing 32 000 and 3 600 jobs, respectively.
Collectively across these sectors, Germany, France, Italy, Spain and Austria incurred the largest losses, with nearly €8 billion in reduced sales of genuine goods.
Widespread impact of counterfeits on health and safety, crime and the environment
Besides economic losses and job impacts, the report notes that counterfeiting fuels organised crime, undermines the trust in the rule of law and negatively affects the environment. Furthermore, counterfeiting in the cosmetics and toy sectors poses significant health and safety risks to consumers. These harmful products represent 15 % of counterfeit articles seized at the EU's borders, according to a 2022 EUIPO threat assessment of IP crime.
Europe’s multi-faceted approach to combat counterfeiting
The EUIPO's comprehensive approach to tackling counterfeiting includes collaboration with EUROPOL, the European Anti-Fraud Office (OLAF), and the European Commission. This multi-agency effort focuses on identifying and eliminating fake goods in the EU, with an emphasis on the interconnectedness of IP crime with other serious criminal activities.
João Negrão, Executive Director of the EUIPO, emphasizes the tangible costs of counterfeiting:
"Counterfeit goods have real costs – for consumers, for brands, and for our economies. This latest study shows the very real costs when it comes to lost sales and jobs in the EU. The findings on counterfeiting highlight the valuable work the EUIPO is conducting through the Observatory and the important collaboration we have with EUROPOL, the European Anti-Fraud Office OLAF and the European Commission to identify and stamp out fake goods in the EU."
Executive summary: Economic impact of counterfeiting in the clothing, cosmetics, and toy sectors in the EU
Full report: Economic impact of counterfeiting in the clothing, cosmetics, and toy sectors in the EU