Curb Counterfeiting Says Trade at Basel

Warning “this evil has become too vast to ignore,” jewelry and watch trade groups urged governments to take aggressive action against the rampant counterfeiting of luxury products.

“[We need] concerted global action … to cut off the head of this snake,” said Jacques J. Duchêne, president of the BaselWorld Exhibitors Committee, at a press conference at the opening of BaselWorld 2006.

He estimated that 40 million fake Swiss watches are sold annually worldwide, netting an estimated $610 million profit for counterfeiters. Fake goods of all kinds represent about 10 percent of total global trade, with an annual turnover of about $329 billion.

“Our watchmakers invest hugely in research, development, marketing, and in training their employees to offer customers the best quality, precision, materials, and brand positioning,” said Duchêne. “The imitators are profiting from this investment.”

Yet, he said, the problem gets scant attention from most governments and consumers. He decried “an all too casual attitude” in many countries about fake goods. “The fight against imitation products isn’t a high priority with the authorities, and counterfeiters profit from this neglect,” he noted.

As for consumers, “the fact is, imitation goods have become part of a new lifestyle,” he noted. “More and more consumers accept this, without showing any concern for the severe consequences.” He cited two factors that abet consumer indifference: the improving quality of counterfeits and the growing number of Internet sales and auction sites.

The public must understand, said Duchêne, that “they won’t be covered by any guarantee if they buy an imitation product, leaving them no protection if the product is faulty.” Furthermore, public acceptance lets not only counterfeiting go unchecked but also the money laundering and organized crime that accompany it, he said.

Gaetano Cavalieri, president of CIBJO and the Italian jewelry industry’s representative to the World Trade Organization, said Italy’s jewelry business—one of the world’s most successful—is being damaged by what he called “the flourishing industry” of counterfeit goods. In 2003 alone, he said, turnover of all counterfeit goods in Italy was more than $4.2 billion.

Patrice Bernard, representing the French Watch and Jewelry Association, said, “It’s high time to put an end to this piracy and its channels of distribution.” He also noted that workers producing counterfeits often work in conditions that “don’t respect human dignity.”

“Any serious fight against this problem can only occur through cooperation with governments of the countries where imitation products are manufactured,” said Duchêne. “Countries that import watches [should] strengthen relevant laws, something which France and Italy are already doing. And I assure you, the Swiss watchmaking industry is keeping governments aware of the situation.”

In separate comments later, Swiss federal councillor and economics minister Joseph Deiss said his government is “fully committed to protecting our [watch industry] trademarks and patents,” both on its own and in the WTO.