The link between counterfeiting and organized crime

International law enforcement and market experts have established a close link between counterfeiting and other forms of criminal activities. It has been found that the counterfeiting business helps criminals to fuel other illegal activities and vice-versa. EUROPOL (European Union Agency for Law Enforcement Cooperation) has even warned that counterfeiting is an increasingly attractive avenue for organized crime syndicates to diversify and increase their illicit businesses.

It has also been found that counterfeiters use similar routes and modus operandi to supply counterfeit goods as they do to smuggle drugs, firearms and human trafficking. Profits from other crimes and illicit activities also help in the production and distribution of counterfeit goods. Many reports from different countries have established the fact that profits from crimes like drug trafficking and other crimes were used to promote the business of counterfeiting and, similarly proceeds from the sale of duplicate goods were used to promote the criminal’s other illicit activities.

One of the main reasons why criminals choose counterfeiting over other criminal activities is due to its favourable ratio between potential profits and possible risks. According to Executive Director, UNODC (United Nations Office on Drugs and Crime) Yuri Fedotov, “In comparison to other crimes such as drug trafficking, the production and distribution of counterfeit goods present a low-risk/high-profit opportunity for criminals. Counterfeiting feeds money laundering activities and encourages corruption. There is also evidence of some involvement or overlap with drug trafficking and other serious crimes.”

As per trade, reports counterfeiting is now placed amongst the highest income sources for organized criminal activities. Counterfeiting or duplication also helps in money laundering by providing a platform through which criminal organization can invest the proceeds of their illicit activities. In a nutshell, organized crime syndicates use counterfeiting as a medium to optimize their other criminal activities.

The growth of counterfeiting in the packaged food industry

Lately, the Food Safety Department seized over 1000 Kg of counterfeit desi ghee from a market in Delhi. Besides the content, the forgers had copied the packaging, trademarks and logos of a popular desi ghee brand and were selling counterfeit in its name. However, the authorities caught the loopholes and seized a large number of fake desi ghee bottles.

Counterfeiting of packaged foods is not something new and there have been numerous incidents related to the same over the past years. From tea to common salt, butter to bread, edible oils to pickles, a large number of packaged eatables have been counterfeited and adulterated.

As per Allied Market Research, “Packaged Food Market size is expected to garner $3.03 trillion by 2020, registering a CAGR of 4.5% during the forecast period 2015 – 2020.” Due to such a massive growth of the packaged food industry, counterfeiters are trying their level best to sell packaged foods by copying the content and packaging of the product.

Counterfeit packaged food is not just harmful to the manufacturers but equally impacts the consumers. According to a paper published by Michigan State University, Global Counterfeit Food & Beverage Packaging: Impacts on Food Safety, “Counterfeit food threats are becoming more common as supply chains become more global and as imaging and manufacturing technology becomes more accessible.”

Counterfeiters refill the original product package, adulterate its contents and copy the labels, logos and other trademarks. In order to check tampering, adulteration and counterfeiting of the original products, manufacturers must use different kinds of anti-counterfeiting packaging technologies. These technologies not just accentuate the brand’s visibility but also secures the brand from duplication and other harmful activities.

Hot stamping: A revolutionary printing method against counterfeiting

Hot stamping is a revolutionary printing method which is environment-friendly, easy to implement, durable and can include a variety of colours and processes. The printing method has diversified, since its rise to popularity in the 19th century. Post 70s, hot stamping became one of the most popular printing technologies used on plastic products. Once majorly used for only plastic products, hot stamping is now being used for electronic components, cosmetic items, automobile parts to name a few.

Hot stamping involves a process in which a part of the object is efficiently marked with the foil. The hot stamping foil can endure harsh conditions of nature like pressure, temperature, scratches etc. Now, let’s understand the process of hot stamping.

  • In a hot stamping machine, a die is mounted and heated.
  • The product which needs to be stamped is placed beneath the die.
  • A painted roll leaf carrier is inserted between the die and the product.
  • The die presses down through it.
  • The dry paint or foil is impressed onto the surface of the product.

The hot stamping process is easy to apply to the product and packaging.  It is also economical, environment-friendly and secures the product from counterfeiting. Being one of the largest hot stamping foil manufacturers in India Holostik takes advantage of being the leader of the anti-counterfeiting industry in India. We are not only serving our clients in more than 14 different industries but also helping them to choose from different variants of HSF or hot stamping foil.

What are the effects of counterfeiting on the alcohol & beverages industry?

At the start of this year, two ill-fated hooch tragedies in the states of Uttarakhand, UP and Assam took more than 200 lives and shocked the entire nation. A big question was raised on the regulatory framework of the states’ excise departments and the government machinery. However, hooch tragedies have been happening in India for the past so many years.

Here are the number of people who died due to counterfeit and adulterated liquor in the last 10 years.

Year State No. of deaths
2009 Gujarat 136
2011 West Bengal 172
2015 Mumbai 102
2016 Bihar 13
2019 UP & Uttarakhand 99
2019 Assam 114

The disturbing figures

According to Illicit Markets- A threat to our National Interests published by FICCI and Thought Arbitrage Research Institute in 2015, the grey market loss to the alcoholic beverage industry stood at INR 14,140 crore in 2014 which had increased from INR 5,626 crore in 2012.  This resulted in a huge tax loss to the government with an estimated revenue of INR 6,309 crore.

The figures are quite disturbing and have a direct impact on the alcohol and beverages industry in many ways. Let’s discuss them one by one.

Effects of counterfeiting on the alcohol and beverage industry

  1. Loss of tax revenue: Counterfeiters or forgers use different channels or means to sell illicit liquor which leads to evasion of taxes meant to collected by state and central governments.
  2. Promotes criminal activities: No wonder, the sale of counterfeit alcohol directly or indirectly benefits criminals and crime syndicates who use the profits incurred from it on other crimes.
  3. Loss of brand image: The sale of counterfeit or spurious alcohol tarnishes the image of the company and its products.
  4. Loss of consumers: One of the biggest threats of counterfeit alcohol is its effect on the health of the consumers. Besides serious conditions like liver or kidney failure, counterfeit alcohol can also take away their precious life.

The solution

One of the best solutions against illicit liquor is the use of tax stamps which include both physical and digital security features. For example, tax stamps must include bar codes or QR codes along with a hologram for enhanced two-step security. This helps in checking the counterfeiting of liquor to a large extent as fraudulent are not able to copy the holographic features with ease. Moreover, the digital security feature also helps in tracking the product in the supply chain along with a host of other IT-enabled supply chain management features.

What are the reasons behind the growth of counterfeiting?

Counterfeiting is a global problem which is growing on a rapid scale devouring economic growth and affecting the society badly. According to a report by the OECD and the EU’s Intellectual Property Office, “The value of imported fake goods rose to $509 billion in 2016, up from $461 billion three years ago.”

The report also states, “Global sales of counterfeit and pirated goods have soared to $522 billion a year, amounting to a whopping 3.3 per cent of world trade.” Different experts cite different reasons behind the growth and expansion of counterfeiting but there are a few main reasons which are responsible for its monstrous growth.

The trend of knowingly buying fakes: One of the biggest reason behind the rise of fakes is that there is a big market for it. The rise of luxury brand value has deeply steeped in the heart of millions and the only possible way to afford it is to buy a fake luxury product which satisfies one’s obsession for costly goods and is affordable at the same time. There are a large number of people buying fakes compared to the ones who unknowingly fall victim to counterfeit products. Moreover, counterfeits offer a high-profit margin for distributors and retailers compared to genuine products.

Poor IP laws and weak monitoring of supply chains: The governments in different countries need to make stringent intellectual property laws and should equip authorities with advance mechanisms to monitor supply chains. Perhaps one of the reasons behind the flourishing counterfeit business is due to the absence of these two steps. In the presence of strict IP laws, the chances of copyright violations come down drastically and curb the practice of counterfeiting. Besides, government authorities should also be equipped with advanced monitoring technologies to look out for any loopholes.

The rise of counterfeit business on the web: Nowadays, counterfeiting has intruded the online marketplace. We regularly encounter spurious websites and social media links on the web which showcase alluring deals on different kinds of products. But do we really know how the product actually looks like? According to the International Trademark Association, “Criminals prefer to sell counterfeits on the Internet for many reasons. They can hide behind the anonymity of the Internet with the Dark Web even their IP addresses can be hidden. The Internet gives them the reach to sell to consumers globally-outside of the national limits of law enforcement.”

The growth of free trade zones: Another factor behind the growth of counterfeiting worldwide is the rise of free trade zones in different parts of the world. Free trade zones provide tax advantages and other exemptions which helps to boost the economy of the host country. However, it also leads to a rise in counterfeiting and piracy as there are little checks and easy transport facilities available in these zones.

Lack of use of anti-counterfeiting technologies: Many organisations do not take counterfeiting seriously and they ridicule the use of anti-counterfeiting technologies. However, the fact is that duplication eats their business from within like cancer and at times the financial damage is huge. It is high time that organisations utilise the power of anti-counterfeiting technologies to deter counterfeiters from sneaking into their profits.

What are the negative outcomes of counterfeit fertilizers?

Lately, there has been an increase in raids on counterfeit fertilizers across India. Counterfeit and adulterated fertilizers have been detected at different stages of the supply chain. International reports suggest that counterfeit fertilizers are not just a problem limited to India but are prevalent in Indonesia, Vietnam, Turkey and many countries in Africa.

Fertilizers are often adulterated with fillers which contain harmful chemicals. It has been usually seen that expensive fertilizers are mixed with cheap grade ingredients.

The boom of the green revolution in our country and the resulting increase in demand for fertilizers created a lucrative opportunity for counterfeiters to sell adulterated fertilizers on a large scale.

However, counterfeit fertilizers have led to a lot of negative outcomes. Counterfeit fertilizers damage the crops, makes the fertile land barren and most importantly weakens the country’s economy.

Due to low yields, farmers are not able to repay their debts to the bank which causes an unnecessary financial burden. This forces the banking institutions to further increase the interest on the loans which demotivates the farmers to borrow them. It’s like a vicious cycle which never ends and leads to massive financial losses.

Continuous deterioration of farming output creates a cause of concern for commodity traders and investors. Moreover, legitimate fertilizer manufacturing companies face a massive financial setback due to the sale of counterfeits and suffer from a poor brand image among consumers which takes years to heal.

Anti-counterfeiting solutions can play an important role in curbing counterfeiting in the fertilizer manufacturing industry. Holostik is a name to reckon with the best anti-counterfeiting solutions provider. The company provides customized solutions to deal with the duplication and adulteration of fertilizers. The company’s unique packaging solutions encompass high-end anti-duplication solutions which make it impossible for the forgers to adulterate or copy the product.

An IBEF report states, “Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added by agriculture, forestry and fishing is estimated at Rs 17.67 trillion (US$ 274.23 billion) in FY18.” With such a massive contribution to the economy, it is high time that the Indian agro-industry players, authorities and the Government take necessary measures to tackle the menace of duplication.

What are the advantages of digital authentication?

Authentication technologies play a pivotal role in protecting brand reputation, value, market share and above all trust of customers. As counterfeiters use new methods and technologies for duplication it has become highly critical for legitimate manufacturers to utilize the power of digital authentication.

Digital authentication technologies are being widely used by companies across the globe to tackle the problem of counterfeiting. Some of the widely used digital authentication technologies comprises of bar codes, QR (Quick Response) codes, RFIDs, taggants etc.

Among these authentication technologies bar codes and QR codes are being massively used by organizations to secure their products and safeguard and manage their supply chains.

As per a trade report, “The barcode sector of the technology segment constituted the highest share in the anti-counterfeit packaging market; and is projected to grow at a second-highest rate during the forecast period as it is highly preferred for brand protection in almost all industries but especially in personal care & cosmetics products. This is due to the information and code embossed over the barcode and does not allow the covert data to be displayed on the label, making it difficult for counterfeiters to copy. A barcode helps companies to integrate product lines and reduce the total cost of ownership.”

QR codes or 2D bar codes are not much different from bar codes except that they can store much more information compared to a normal barcode. Both these machine-readable codes can be scanned with handheld devices and mobile phones. Perhaps, one of the biggest advantages of these digital authentication technologies is that they provide quick and convenient authentication in real time.

Here are some benefits of digital authentication technologies:

1.Real-time authentication: Digital technologies like bar-codes and QR codes offer instant authentication of the product in real time. This means that you don’t have to wait much in order to check the genuineness of the product.

2.Stores large amount of information: From the name of the product to manufacturing and expiry date, nutritional value and much more, bar codes and QR codes can store a large amount of information which reflects on the screen once scanned. It helps the consumer and other stakeholders in the supply chain to know about the necessary information related to the product.

3.Unique for every single product: Bar codes and QR codes are unique for every single or individual product manufactured by the company. Thus, these solutions give a unique identity to each product in the supply chain and ensure their comprehensive and detailed monitoring.

4.Can be amalgamated with physical authentication technologies: Holostik which is a pioneer in anti-counterfeiting technologies in India offers a unique smart security hologram which includes a QR code and a hologram for two-phased authentication of the product. Quite evidently, one can’t deny the great quality of digital technologies to easily amalgamate with physical technologies.

‘Fake drugs cause death of 2,50,000 children every year’ warn US doctors

Doctors have asked for an urgent international effort to combat the harmful effect of bad drugs that are thought to kill hundreds of thousands of people around the world everywhere.

The doctors cautioned that an increase in counterfeit and cheap grade medicines means that 2,50,000 children are thought to die because of them.

A large number of children are thought to die due to cheap grade vaccines and antibiotics which are meant to treat acute infections and diseases such as hepatitis, yellow fever and meningitis.

“The penalties are a slap on the hand, but we are talking about murder by fake medicine here,” said Joel Breman, a senior scientist emeritus at the US National Institutes of Health in Maryland.

Writing in the American Journal of Tropical Medicine and Hygiene, doctors from the US government, universities, hospitals and the pharmaceutical firm Pfizer warn that the rise in “falsified and substandard medicines” has become a “public health emergency”. On top of the direct harm they cause, bad drugs are a major driver of antimicrobial resistance, which fuels the rise of superbugs. “This is an urgent public health issue and we need to take action,” Breman said.

Source: theguardian.com

Why holography plays a dominant role in product packaging?

Holography not just helps in securing the product against duplication but also helps in making the product highly attractive for the end-consumer. In a highly competitive market product manufacturers leave no stone unturned to attract potential consumers and retain loyal ones. Holograms and other holographic packaging products are an effective way to catch the attention of consumers. There is also a wide scope of innovation in security holograms.

Some examples include new printing techniques, innovative embossing processes along with a plethora of 3D visual effects and features which can be incorporated in the holograms.

Security holograms can also encompass other anti-tampering, covert, overt, forensic and digital features which substantially increases its effectiveness in packaging.

Another widely used packaging product is the holographic wide web film which is used for a wide variety of flexible applications. Holographic wide web films are used for printing, making gift wraps, lamination, product packaging and enticing marketing stickers. This holographic product helps in reinforcing brand identities, capturing customer attention and bringing new life to mature or ageing pack design.

Of late, there is a high demand for many other holographic security and packaging products. Some of them include holographic security pouches, holographic wads/liners, holographic shrink sleeves, holographic tax stamps, holographic stamping foil and holographic security labels.

Holostik is one of the global leaders in the anti-counterfeiting and packaging industry and provides different holographic products in a customized format as per the need of the consumers. Each of these holographic products is used by different industries and has different applications. However holographic products can also serve multiple purposes of providing security and aesthetic appeal to the product.

Holostik has also made a revolutionary change in product packaging with the incorporation of bar codes/QR codes on most of the holographic products with exceptions like hot stamping foil. Holostik strongly believes that physical and digital technologies are complementary to each other and are not competing.

Holostik: Ensuring comprehensive security of products and supply chain

One of the biggest challenges for companies today is the security of their supply chain. Any kind of lapses in a supply chain can lead to theft, counterfeiting, adulteration and other problems which can severely impact the performance of an organisation.

Industries, regulatory agencies and governments across the world have realised the importance of implementing security measures in order to secure the product and supply chain. This comprehensive security approach helps all the stakeholders of the supply chain.

When it comes to ensuring the security of the brand most organisations believe that it is enough to secure the product against any kind of duplication and tampering. However, the actual scenario is quite different as a product is susceptible to different problems at different stages of the supply chain. This means that product authentication does not guarantee the security of a product from theft and damages.

Today, when the performance of the company highly depends on the health of the supply chain it is equally important to secure the product along with the supply chain.

Holostik provides cutting-edge anti-counterfeiting solutions for ensuring the safety of the product and the supply chain. In order to secure the product, the company has a gamut of solutions ranging from security holograms, security labels, QR based holograms, labels and much more. Holostik provides security labels and holograms and smart QR based holograms for product authentication and it also offers track and trace services which ensure the tracking and tracing of product in the supply chain.

A comprehensive security approach can be implemented with the help of a customised smart hologram or customised holographic label which caters product authentication along with track and trace functionality. With Holostik’s robust track and trace services, manufacturers can remain carefree from any kind of product theft, tampering, adulteration in a supply chain.