The growing challenge of counterfeiting in the FMCG industry

Of late, the FMCG sector has been suffering from the problem of counterfeiting. As per a report by FICCI CASCADE around 35% of FMCG items are fake. The study also reveals that around 80% of consumers believe that they are buying genuine goods.

The growth of fake goods in the FMCG sector has had an impact on both consumers and producers. While the manufacturers suffer from a tarnished brand image and low sales the consumer is at the risk of losing money and a bad impact on his or her health. He also says that unscrupulous manufacturers are also detrimental to the national economy.

Counterfeiters also repackage fake goods to make them visually similar to the genuine ones. It has been seen that old plastic water bottles are being repackaged and sold in the market, the same is the case with many other goods. Such deceptive duplication leads to a loss of consumers and brand owners as well.

In India, a large number of the population settled in rural parts of the country suffer from rampant counterfeiting of FMCG goods. With a little check of authorities and poor regulation and manufacturing guidelines counterfeiting is easily slipping in the pockets of the common man.

Advancements in technology and easy procurement of the same have made it possible for counterfeiters to establish little backyard factories and hubs for the manufacturing of duplicate items. It has also been observed that counterfeiters are making fake labels and packaging to dupe consumers. In the year 2014-2015 sale of FMCG, tobacco and alcoholic beverages constituted 65 percent of the total sales.

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Why manufacturers require anti-counterfeiting technologies?

The global market for all counterfeit items is booming. According to the Global Brand and Counterfeiting Report, “The worldwide value of counterfeiting stood at a massive 1.2 Trillion dollars.” It is not just the consumer who faces the brunt of counterfeiting, but manufacturers also have to face the negative impact of counterfeiting.

There are many reasons which are responsible for the growth of counterfeiting in the manufacturing sector. According to a market, expert counterfeiting is becoming a bigger issue in the manufacturing sector for two reasons: The global marketplace is bringing in more players every day, and purchasing departments are pressured to continually lower the cost for what they pay for goods and services.

Another growing threat of counterfeiting in the manufacturing sector is the rise of counterfeit aftermarket parts and spare parts. Of late, particularly, in the auto industry, there has been a rise of fake auto components.

According to the magazine Business World, “The fake auto parts such as a clutch, lamps, steering arm, bearings, filters, and brake linings for two-wheelers, cars, and buses labelled under the name of genuine auto component manufacturers are supplied to the dealers and marketers all over the country.” The article also mentions that fake parts are available at 30-40% lower costs.

Industry experts also warn that it is not just the product which is being mimicked but counterfeiters try their level best to copy the packaging and branding of the product. Many times, they also have nice websites with photos of warehouses and workshops to make them look trustworthy.

In these testing times when counterfeiters have access to advance technology, it has become important to check the growth and sale of counterfeits in different industries. Moreover, there should be constant monitoring of the supply chains and the regular use of cutting-edge anti-counterfeiting technologies. A proper combination of physical and digital anti-counterfeiting technologies can check and monitor the growth of counterfeiting. The use of anti-tampering and scratch solutions will further add up to the anti-duplication game.