€3.5bn lost every year across the EU due to fake jewellery, watches, handbags and luggage, EU IP agency shows

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The manufacture of counterfeit jewellery, watches, handbags and luggage costs EU businesses €3.5bneach year.

Two new reports from the Office for Harmonization in the Internal Market (OHIM), the EU’s largest intellectual property agency, reveal that 13.5% of sales of jewellery and watches and 12.7% of sales of handbags and luggage in the EU are lost due to counterfeiting.

Those lost sales translate into 27,000 jobs directly lost across the two sectors, as legitimate manufacturers employ fewer people than they would have done in the absence of counterfeiting.

Moreover, the total yearly loss of government revenue as a result of counterfeit products in these sectors across the EU in terms of household income taxes, social security contributions, corporate income taxes and VAT can be estimated at €1.1bn.

The president of OHIM, António Campinos, said: “The jewellery and watches sector and the handbags and luggage sector in the EU are overwhelmingly made up of micro-enterprises, which employ fewer than ten people. The average number of employees per enterprise in the jewellery and watches sector is just  three people. Such businesses are particularly vulnerable to the economic effects of counterfeiting.”

Today´s reports are the fifth and sixth in a series of studies released by OHIM via the European Observatory on Infringements of Intellectual Property Rights into the economic impact of counterfeiting in industrial sectors in the EU. The series previously looked at: the toys and games sector; the sports goods sector; the clothes, shoes and accessories sector; and the cosmetics and personal care items sector. Each report in the series centres on a sector known to be vulnerable to counterfeiting.

Italy: 

More than half of the EU’s total manufacture of handbags and luggage takes place in Italy, where the sector was worth €6.5bn in 2012. Italy also accounts for 40% of the EU’s exports and 35% of the sector’s total EU employment. The handbags and luggage manufacturing sector in Italy loses €520m every year as a result of counterfeiting – one third of total lost sales in the EU. Italy is also the largest producer of jewellery in the EU with production of €5bn each year. The jewellery and watches manufacturing sector in Italy loses approximately €400m every year due to counterfeiting.

France: 

France is the second-largest exporter of handbags and luggage in the EU-28. The sector was worth €2.7bn in 2012. The handbags and luggage manufacture sector in France loses approximately €99m every year as a result of counterfeiting. France also accounts for 19% of all employment within this sector in the EU-28. The jewellery and watches sector in France is worth approximately €1.5bn each year. The jewellery and watches manufacturing sector in France loses approximately €336m each year as a result of counterfeit products in the French marketplace.

Germany: 

The German handbags and luggage manufacturing sector loses €231m annually as a result of counterfeit products in the marketplace – 13.9% of all sales in this sector. The German jewellery and watches manufacturing sector – worth approximately €1.7bn each year – loses €247m annually as a result of counterfeit products in the German marketplace. Germany is the biggest producer of watches in the EU.

UK: 

The UK handbag and luggage manufacturing sector loses ₤149m annually as a result of counterfeit products in the marketplace – nearly 12% of all sales in this sector. The UK jewellery and watches manufacturing sector loses ₤138m annually as a result of counterfeiting.

Spain: 

The Spanish handbag and luggage sector loses €123m every year as a result of counterfeit products in the marketplace – 11% of all sales in this sector. The Spanish jewellery and watches manufacturing sector loses €204m annually as a result of counterfeiting.

Together, Italy, France, Germany, and Spain account for approximately two thirds of the total lost sales in the jewellery and watches manufacturing sector across the EU- 28.