€ 83 billion and over 780,000 jobs lost in EU due to counterfeiting
Nine studies from the European Union Intellectual Property Office (EUIPO) shows that on average 7.4% of legitimate sales of corresponding sectors known to be vulnerable to IP infringers are lost each year in the 28 Member states due to counterfeiting as well as piracy also in the sector of recorded music. The damages amount to € 83 billion in total, out of which €48 billion are directly lost by these sectors. Every year, an additional € 35 billion is also lost across the EU economy due to the indirect effects of counterfeiting and piracy in these sectors, as manufacturers buy fewer goods and services from suppliers, causing knock-on effects in other areas.
Those lost sales translate into close to 500,000 jobs directly lost or not created across these sectors in the EU, as legitimate manufacturers and in some case distributors of corresponding products employ fewer people than they would have done in the absence of counterfeiting and piracy. When the knock-on effect of counterfeits on other sectors is taken into account, an additional 300,000 jobs are lost elsewhere in the EU economy. The total yearly loss of government revenue as a result of counterfeit products in these sectors across the EU-28 is estimated at € 14.3 billion, in terms of household income taxes, social security contributions, corporate income taxes, VAT and excise taxes.
EUIPO’s Executive Director, António Campinos, said: “We knew that fake products can pose serious threats to health and security of consumers. We now also realise the serious economic damages they have for our economies, jobs and societies. Our goal is to support policy makers with relevant evidence and raise awareness of consumers so that their purchasing decisions are grounded on objective fact based information. This is all the more important at this time of the year, when consumers and citizens are doing their Christmas shopping and choosing gifts for their dear ones”.
This information is based on a series of studies undertaken by EUIPO into the economic impact of counterfeiting in industrial sectors in the EU. The 9 studies previously looked at the pharmaceutical sector, spirits and wine, recorded music sector, watches and jewellery, handbag and luggage, toys and games, sports goods, clothes, shoes and accessories and the cosmetics and personal care sector.
In Croatia it is estimated that € 261 million is directly lost annually as a result of counterfeiting, in the sectors identified, amounting to 8.9 % of the sales of these sectors. This translates into over 4,200 jobs directly lost in these sectors.
Impact on larger countries is even bigger. It is estimated that over € 9.4 billion is lost annually in France as a result of counterfeiting, with over 6 billion euros directly lost in mentioned sectors, amounting to 6.6% of their sales. This translates into 69,600 jobs lost, with 38,500 jobs directly lost in these sectors. France is the second most affected country if we consider direct and indirect sales lost due to counterfeiting and the third country most affected by direct lost sales.
Over € 9.1 billion is lost annually in Germany as a result of counterfeiting, with over 6.1 billion euros directly lost in the sectors identified, amounting to 5.6% of their sales. This translates into 84,400 jobs lost, with 60,000 jobs directly lost in these sectors. Germany is the third most affected with total sales and jobs lost due to counterfeiting, which reflects the importance of Germany as a producing country.
Bulgaria is relatively the most affected country most affected by lost sales due to counterfeiting. Their annual loss is more than double the EU average. Over € 382 million is lost annually in Bulgaria as a result of counterfeiting, with over 319 million euros directly lost in the sectors identified, amounting to 16.8% of their sales.
Romania is the second most affected by lost sales due to counterfeiting, also with more than double the EU average. € 830 million is directly lost every year, amounting to 15.9% of their sales. This translates into 26,600 jobs directly lost in these sectors.