Fake brands are harmful for company's image

Rucha Biju Chitrodia / TNN / Sep 28, 2007, 00:06 IST

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Companies have been doing their bit to counter counterfeits and passoffs (products that carry a similar, but not identical brandname; like, a Vicks ripoff in Gujarat was called Vikas).

Fake brands are harmful for company's image

How does a common man distinguish between a genuine, branded product and a fake? A consumer recently found a feather in a salt shaker. Another complained of a dead fly in a biscuit pack. While such products may look like the real thing on first sight, there is a fair chance that these were either tampered with or are duplicates. In any case, consumers would end up losing both their money and faith in the brand.
Companies have been doing their bit to counter counterfeits and passoffs (products that carry a similar, but not identical brandname; like, a Vicks ripoff in Gujarat was called Vikas).After all, fakes dent company sales and ultimately, the brand image.
For the purpose, in 2000-01, Ficci had set up a Brand Protection Committee (BPC). Its objective is to fight fakes by working with government authorities, industry and consumer groups.
"The industry has now renewed its rigour on this (effort). We have had a meeting with Ficci for a timebound action plan," says Ashok Gupta, coordinator at BPC and executive director, legal, Hindustan Unilever.

The action plan, firstly, proposes sub-committees for each industry segment such as FMCG, pharmaceuticals, petroleum, textiles and IT. The sub-committee heads will report all incidents of counterfeiting to Ficci, which in turn will activate a watchdog programme. Says Edward Rodricks, consultant at Ficci for the watchdog programme, "Ficci-appointed detective agencies will scour the market."
The findings will be reported to individual companies and in-depth investigation will be recommended, if required. The watchdog will supervise the probe and on its completion, advise the concerned company on the action to be taken—criminal, civil or a combination of both.

Raids and post-raid action will also be monitored. Consumers will be educated about the evils of counterfeits with the help of publicity campaigns. They are being encouraged to report counterfeits on Ficci's national hotline 91-22-24968000.
Consumer organisations agree it is companies' duty to control the menace of fakes. R Desikan of Chennai consumer group Concert says, "The brand-owner has a tremendous responsibility to protect a brand and must not refuse to own up to the fact of spurious products."
Companies, though, may not want to publicise instances of fakes as they fear adverse publicity, says Pritee Shah of Ahmedabad's Consumer Education & Research Centre. "But instead of raising their hands, they must take action by using the government machinery and their resources." In this direction, "The committee's agenda is to persuade the Central government to bring about legislative changes and the state government to enforce IPR," says Gupta. Stricter penalities are required as counterfeiters get bail within a few hours, he adds.
Deepak Acharya, general council at Procter & Gamble and BPC founding-member, adds, "Right now, most states consider harm to body as more detrimental. IPR violation is seen as a victim-less crime." The committee is trying to impress upon the government to make IPR a cognisable offence under the Trademarks Act. Consumer organisations second the call for stricter enforcement. Says Bejon Misra of Delhi's Consumer Voice, "Till the enforcement machinery is not empowered to confiscate goods and destroy them there and then, rather than wait for a court order, the menace will not stop." It has been observed that confiscated goods return into the supply chain and thus the market.
Vaijayanti Pandit, director, western region, Ficci, says sometimes counterfeits appear in the market within 24 hours of a new product's launch. Acharya, however, specifies that some states have a good mechanism in place. "In Mumbai, we have counterfeits of a different kind—imported goods." Surprisingly, says an industry source, even the manufacturing and storage of counterfeits mimic brands' marketshares.

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