Guyana and the global trade in counterfeit goods

In the years since the issue of the trade in counterfeit goods has been on the radar of the local Food and Drugs Analyst Department, we have not been able to learn nearly as much as we ought to about the scale of the problem, the dangers that it poses and the extent to which its proliferation hurts both the manufacturers and the distributors of genuine brands. Perhaps more importantly, and particularly as it relates to counterfeit drugs, we remain blissfully unaware of the impact on the nation’s health.

Local media reporting on counterfeiting and the ways in which it impacts on commerce and on the country as a whole is strictly limited and the outcomes of such reporting have failed to throw up any statistics that can be helpful as far as analyzing the scale of the problem is concerned.

In its interviews with this newspaper over the years the Food and Drug Analyst Department has shared limited information on the proliferation of counterfeit goods, particularly drugs and cosmetics as well as what have been the Department’s limited and less than effective efforts to curb the problem.

The main challenge for the Department has been its lack of resources, a condition that has prevailed despite what this newspaper has been told are the “troubling’ proportions which the problem of counterfeit goods has reached. The challenge associated with monitoring the inward movement of goods – counterfeit or otherwise – into Guyana reposes, first, in the limited capacity of the Food and Drug Analyst Department to monitor imports at legitimate ports of entry and, secondly, the absence of effective policing of the country’s huge and porous borders.

What the Food and Drugs Analyst Department has been saying in recent times is, first, that it continues to work with local distributors of legitimate products who continue to be undersold by counterfeit merchants and, secondly, that against the backdrop of its limited capacity it continues to effect such limited monitoring as it can in the customary commercial areas targeting street vendors who appear to have fairly reliable access to limited volumes of counterfeit products. Rather less information is available on the wider local proliferation of counterfeit goods which reportedly involves several established business enterprises.

20141128fakeproductWe know from wider research that Guyana is less than the tip of the iceberg as far as the global counterfeit trade is concerned. In 2012 the global monitoring agency International Anti-Counterfeiting Coalition (IACC) estimated that activities in the counterfeit trade ‘sector’ resulted in revenue loss to manufacturers of genuine products totaling around US$600 billion and that the end of 2015 the overall value of the global trade in counterfeit and pirated goods could be worth as much as US$1.77 trillion.

In the absence of reliable statistics the local Food and Drugs Department and the Guyana National Bureau of Standards (GNBS) have both made public pronouncements from time to time on the issue of ‘fake’ goods, naming particular products, chiefly drugs, cosmetics, food items and vehicle spares in the process. What this newspaper has been able to determine based on statistics produced by the IACC is that local concerns over the particular items being counterfeited on the international market corresponds roughly with its own counterfeit value chart. The Coalition’s “ranking of counterfeit goods by losses in 2013” states that last year counterfeit drugs robbed the legitimate industry of around US$200 billion while counterfeit electronics accounted for US$169 billion.

The total losses suffered by the food industry on account of counterfeit production and distribution amounted to around US$49 billion while counterfeit auto parts resulted in losses to the sector totaling US$45 million.

The IACC counterfeit chart rating corresponds roughly with what would appear to be the assessment of the formal Guyana private sector regarding the proliferation of counterfeit goods. Just last week one of coastal Guyana’s leading auto parts dealers told this newspaper that it is not unlikely that “in excess of half” of the motor vehicles repaired and serviced in Guyana now have “at least one or two, and perhaps several ” counterparts, an assessment which offers some idea of the scale of the counterpart parts business.

Setting aside what this newspaper understands is an ongoing conversation between the Food and Drugs Analyst Department and legitimate distributors over what is believed to be the worsening problem of the counterfeit trade, the Department has also undertaken a limited public education programme aimed at sensitizing consumers to the need to examine their purchases carefully. That, however, will continue to face the inevitable competition with a consumer mindset that – at least in a significant number of cases will favour the cheaper imitation.

There is a school of thought – which has never been rejected by the Food and Drugs Analyst Department – that counterfeit imports may well have become an integral part of mainstream commerce and that there may well be instances in which elements of the formal trading sector are heavily involved in counterfeit trading.

Tim Phillips, the author of a book titled Knockoff: The Deadly Trade In Counterfeit Goods

makes some revealing pronouncements about the scale and commercial influence of the global counterfeit trade. He alludes to a 1984 United States Congressional Report which links the counterfeit goods trade to organized crime, arguing that counterfeit goods have been used as an alternative to accumulating cash which has become more difficult to conceal in these days of increased official focus on anti-terrorism.

Phillips writes that since 1984 the “scale and danger” of counterfeiting “is approximately 100 times larger than it was then. The organized crime gangs that were fingered in the government 1984 Report have expanded their business into a sophisticated global enterprise.”

What may well account for the apparent incremental growth of the counterfeit goods trade in countries like Guyana is what Phillips contends are the linkages that exist between the counterfeit industry and mainstream trading, a development that places the counterfeit industry in the ‘big league’ of international business with unofficial statistics indicating that counterfeit goods probably account for up to 7 per cent of global trade.

Here in Guyana with what is already a modest, underfunded and underequipped facility the Food and Drugs Analyst suffered a further inexplicable scaling down in recent years – including a decline in laboratory testing facilities – officials make no secret of the fact that Guyana is sadly lacking in the capacity to combat the trade in counterfeit goods.

On the basis of the available evidence the Food and Drugs Analyst Department is limited largely to using the media to alert consumers to the presence of fake products on the local market.

Such action, however, is limited to those occasions on which counterfeit goods are brought to their attention. It is, however, the lack of capacity to do much to stop or even significantly reduce the trade in counterfeit goods that is its critical weakness.

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