Stemming the tide of counterfeit productsBy Omolara Otuyemi

Globally, consumer desires range from basic needs to psychological ones. Sadly, as consumers seek quality, authenticity, and value for their money, they can easily become victims of counterfeit products created through deception or profiteering motives. Unscrupulous individuals exploit the consumer’s needs by producing counterfeit goods, which not only undermine consumer’s trust but also pose significant risks to health and safety.

Counterfeit products are fake or replica items designed to deceive consumers into believing they are purchasing authentic brands. The increase in the number of counterfeit products is driven by the sheer increase in consumer demand, with its attendant challenges to the economy, public health, and workforce.

Counterfeit products are prevalent in various sectors, including pharmaceuticals and Fast-Moving Consumer Goods (FMCG) such as beverages, toiletries, cleaning supplies, packaged foods, and other household items. Not only do these counterfeit products endanger public safety, but they also contribute to economic instability and stifle innovation.

According to the World Customs Organization (WCO), counterfeit products infringe upon intellectual property rights. Therefore, it is essential to involve government agencies equipped to identify these counterfeit items and ensure that proper diligence is exercised in removing them from store shelves.

Consumer protection aims to safeguard individuals from unfair or deceptive business practices, promoting fair competition and transparency. This is particularly crucial in tackling the serious health risks associated with counterfeiting, which significantly affects consumer safety across various sectors.

For instance, counterfeit medications in the pharmaceutical industry may contain incorrect dosages or harmful ingredients, leading to ineffective treatments or severe health consequences.

Statistics from the Pharmaceutical Security Institute (PSI) recorded nearly 6,000 pharmaceutical crime incidents in 2021, reflecting a 38% increase from the previous year and the highest rate since records began 20 years ago. Geographically, North America reported the most seizures at 2,442, followed by the Asia-Pacific region (1,747), Latin America (770), the Near East (705), Eurasia (646), Europe (374), and Africa (187).

Similarly, the food and beverage sector faces threats from counterfeit products that may contain unregulated substances, resulting in foodborne illnesses or allergic reactions. The global counterfeit market has been estimated to be worth a staggering $450 billion.

According to the National Agency for Food and Drug Administration and Control (NAFDAC), Nigeria is the developing world’s largest market for counterfeit drugs, with approximately 13% to 15% of drugs in the country being fake. In the last three years, NAFDAC has seized counterfeit drugs valued at around 2 trillion naira ($4.8 billion).

In the book and optical media sectors, the Nigerian Copyright Commission (NCC) estimates that the country loses N918 trillion ($3 billion) annually to piracy. Additionally, the Beauty & Personal Care market, worth as much as $7.87 billion in 2023, is expected to grow at an annual rate of 16.48% through 2027. The risk in cosmetics is that fake products may contain toxic chemicals causing skin irritations or chronic health issues such as cancer.

In the automotive industry, the Standards Organisation of Nigeria (SON) estimates that about 75% of auto spare parts are counterfeit.
The alcoholic beverage sector is also a known hub for counterfeit products, prompting international brands like Azul and Hennessy to publish statistics on their production.

Azul has openly said they produce about 100 bottles of Azul in a year, however, the number of Azul drank in nightclubs in a week across Nigerian night clubs has well exceeded the said numbers produced in a year by the Azul company.

Counterfeit Hennesey and many other alcoholic brands have extensively permeated the hospitality sector. It is not gain saying that many Nigerians, especially Lagosians have willingly and unwillingly become victims of counterfeit products.

Agencies like the National Agency for Food and Drug Administration Control (NAFDAC) and the Lagos State Consumer Protection Agency (LASCOPA) are actively working to combat this pervasive issue. LASCOPA has been empowered to shut down facilities involved in counterfeit production and ensure the safety of consumer goods.
The mandate of LASCOPA includes protecting consumers, ensuring they receive value for their money, and destroying products deemed unsafe for use or consumption. The Agency has been proactive in addressing facilities that harbor unsafe products, striving to rid Lagos of unhealthy, unwholesome, unsafe, and substandard goods.

While consumer demand is often said to be the driving factor behind the proliferation of counterfeit products, the motivation to generate higher profit margins by bypassing quality control measures is also significant.

The impact of counterfeit goods cannot be excessive. According to the International Chamber of Commerce (ICC), the global economy loses about $400 billion every year due to counterfeit products. Consequently, this results in genuine products being overlooked as consumers lose trust, which can lead to job insecurity and subsequently impact the GDP of affected countries.

The pharmaceutical and food sectors are particularly vulnerable, as counterfeit medications and contaminated food products can lead to dire health consequences. A lack of regulation allows these dangerous products to enter the market with minimal oversight, putting consumers at risk of hospitalization or worse.

In combating this menace, governments play a crucial role in the fight against counterfeit products. Countries like the United States, Japan, China, and members of the European Union have implemented stringent penalties for the production and sale of counterfeit goods. For instance, in the U.S. fines of up to $5 million and up to 20 years in prison can be imposed on offenders, while in Japan, China, and Nigeria the sentences can be up to 10 years.

However, the pressing question remains: is this level of punishment sufficient to deter the production or display of harmful counterfeit products?

To effectively curb this problem, governments need to be intentional about conducting inspections and raising public awareness aimed at educating citizens about the hazards associated with counterfeit products, particularly those imported from overseas.

Addressing the problem of counterfeit products requires a concerted effort from all stakeholders, including government agencies, businesses, and consumers. Together, we can promote a safer marketplace that prioritizes authenticity and consumer safety. The ongoing battle against counterfeiting is not just about protecting brands; it’s about safeguarding the health and well-being of individuals and society at large.

Otuyemi is of the Features Unit, Ministry of Information and Strategy, Alausa, Ikeja.