The cosmetics and perfumery industry is one of the market areas most affected by counterfeiting and smuggling operations. In 2015, it was estimated that the total revenue lost to imitation products across the European Union was t4.7bn or 7.8% of total sales, according to a report into counterfeiting in the beauty industry by the EU Observatory on Infringements of IP Rights, a body overseen by the European Union Intellectual Property Office.
Aside from the economic losses created by these goods, imitation cosmetics and fragrances have been found to contain toxic levels of hazardous substances, such as cyanides, arsenic, lead and mercury, all of which are harmful to consumer health. In some cases the chemicals have been found to cause allergic reactions including skin irritations, rashes, burns and swelling, as well as longer term health problems.
According to the Police Intellectual Property Crime Unit (PIPCU) it is estimated that consumers spend at least £90m annually on fake goods in the UK alone. The imitation products are usually produced in poor manufacturing conditions in unsanitary and unhygienic factories where safety laws and regulations are ignored. With the popularity of e-commerce rising, the production and sale of fake goods on the web is increasing. Counterfeit beauty products in particular are becoming progressively more common and easily available on auction sites, online marketplaces, rogue websites and social media, causing a decrease in sales and profits for legitimate companies and brands.
In order to create more awareness about the dangers surrounding imitation products, the PIPCU launched an awareness campaign warning consumers of the risks posed by counterfeit beauty and fragrance products in 2015. The campaign, called Wake Up – Don’t Fake Up!, highlighted the dangers of buying and using counterfeit goods such as make-up, perfume and sun cream.
The percentage of fake goods seized by customs because of health and safety concerns has doubled in recent years. In 2014, the PIPCU dismantled a criminal operation suspected of importing and selling counterfeit goods. The team seized a shipping container that contained more than 4,700 counterfeit versions of one of the UK’s most popular beauty brands, including foundations, lip glosses, eyeshadows and eyebrow pencils.
To combat the fakes, manufacturers have adopted various authentication techniques to prove the product is genuine and to ensure that security of the product is at an optimal level. Packaging is one of the key tools companies can use to demonstrate the credibility of the product and it is now becoming more crucial than ever before to implement anti-counterfeiting packaging strategies to help companies reduce losses while also guaranteeing the safety and security of these goods.
Dr Liz Wilks, Asia Pulp and PaperUsing high quality materials is one of the most vital steps cosmetics producers can take in ensuring consumers can tell the difference between a real and imitation product
Authentication Techniques
Anti-counterfeiting packaging technology, such as visual authentication, will help to combat the expansion of the fraud business and will allow products to retain their integrity and customer loyalty. Dr Liz Wilks, Director of Sustainability and Stakeholder Engagement Europe at Asia Pulp and Paper, tells SPC: “As well as reducing overall sales
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