Counterfeit problem in East Africa

Posted on December 14, 2016 12:33 am

More than half of the products sold in East African countries of Uganda, Kenya, Rwanda and Tanzania are classified as counterfeit.As counterfeit activity grows and seizures decrease, the outlook looks murky for East Africa’s brand owners. There are agencies tasked with border protection and national, regional security duties including the policing of counterfeit goods.But their efforts haven’t yielded much.East African Community has a robust legislative framework to address the importation of counterfeit goods. In 2015, officials from the member states held an “Ideas meeting” to workshop options for improving detection of Intellectual Property infringements at the East African borders. Industry stakeholders were optimistic following the conference that improvements to better tackle the problem of counterfeit goods were achievable.In 2013 Kenyan customs seized in excess of over 200,000 counterfeit goods with an estimated retail value of $3 million. In 2014 the number of counterfeit goods seized had almost doubled suggesting that the heady optimism following the Ideas Summit was well placed. The year 2015 however saw the number of counterfeit goods seized by East African countries customs dramatically fall back to close to 2010 levels. Early indications are that the figures for counterfeit goods seized in the year 2016 could be significantly lower again. In the first twelve months of customs operations, well regarded training events providing brand owners the opportunity to brief customs officers on their brands have been cancelled and anecdotal evidence suggests that the number of seizure notices being issued has slowed to a trickle. The seizure of counterfeit goods at the East African borders appears to have stalled.Brand owners live in hope that the apparent downturn in the number of counterfeit goods seized at East Africa’s borders represents mere teething issues to authorities in the region. If, however, it is indicative of a more general re-prioritisation of resources within the region’s customs departments, East African countries borders risk being wide open to counterfeit goods at a time when counterfeit activity continues to grow on a global scale.Counterfeit washing powder, cigarettes, sanitary pads and beer are among the more unusual products being brought into East Africa, as fake items increase in retail value and become more sophisticated each year according to a customs consultant based in the region I spoke to recently.In Kenya, suspected counterfeit goods imported into the country via cargo or international mail increased. The items had an estimated retail value of over $17 million.

Washing powder, Cigarettes, sunglasses, cosmetics, beer and batteries accounted for more than three quarter of all seizures. Counterfeiting is becoming more sophisticated and organised, and nearly any type of commodity is now at risk of being copied. The total number of 2016 counterfeit seizures are not yet available, however the most recent large seizures, which occurred two months ago, were of more than 30,000 of stationery materials and cosmetic products, according to customs sources.While electrical goods, fragrances, cosmetics and sneakers are still some of the most counterfeited items in East African region, authorities in those countries believe in the past half a decade there has been an influx of small items such as fake batteries, telephone accessories, sunglasses, toothbrushes and personal care products. Up to 95 per cent of all goods are manufactured in China, according to their findings. Customs in the region are authorised by more than 1,000 companies to search and seize goods that are suspected of infringing trademarks and copyright material.Inconsistencies in price and product packaging were clear indicators that products may be counterfeit but consumer advocacy group COFEK in Kenya said fake products make up 70 per cent of the what is sold in the market and are highly sophisticated manufacturing now means counterfeits are harder to detect. To them, gone are the days when knock-offs were easy to spot with their misspelt logos and shoddy craftsmanship. Today’s fakes almost mirror the real thing and are often supported by big online marketing budgets.The number of imported counterfeit products was a big challenge for consumers and retailers in East African region. Especially in the last three years, Customs have been really stretched but they just don’t have enough resources. Small counterfeit items could retail for anywhere between $0.5 to $10. For example, big brands sunglasses might be on sale for $5 at the Tanzanian market for example, yet the company’s website retails its products for over $90. I checked a Finland website selling a pair of Adidas shoes for $190 on the online Adidas store, but the same is on sale for $33 from a Kenyan website(name withheld), which indicate the price was definitely a good indicator that it was a counterfeit website. However, I must say that cheaper products were not necessarily indications of counterfeits as distributors are free to set their own retail prices based on the company’s recommended sale price but if the price is too good to be true, it probably is.

Contador Harrison