• GUEST BLOG: Why product and brand authentication programmes are important

    960 640 Stuart O'Brien

    Highly secure product and brand authentication programmes are becoming more important to businesses due to the developing issues with counterfeiting, duty evasion and other forms of illicit trade across all market sectors.

    Many businesses will already be aware of the counterfeiting issues surrounding items like banknotes and consumer goods. However, the problem now goes far wider and can cause issues in markets ranging from perfumery and cosmetics to aircraft parts, agricultural chemicals, fuels and pharmaceuticals.

    In fact, unlawful trade is likely to occur today wherever valuable products and brands are moving through unprotected supply chains. The estimates of the global value of counterfeit and illicit product sales do vary widely though.

    While official records of sales are not published due to such trade being illegal, current estimates range from US$700 billion according to Havoscope figures to US£1.7 trillion based on ICC research. What is clear, however, is that totally unregulated trade impacts everyone from brand owners and consumers to governments due to the following:

    • Brand owners lose sales, face the prospect of significant false liability claims which are hard to fight, as well as suffering considerable and sustained damage to brand equity unless it is categorically proven that a product is a fake.
    • Consumers can be harmed by counterfeit products — especially pharmaceuticals — while livelihoods can be destroyed when important supplies like crop protection products fail to function.
    • Governments stand to lose billions of dollars through issues with duty evasion in trade such as alcohol, tobacco and fuels. The effects of duty evasion can also be felt by legitimate taxpayers.

    Another problem here is that counterfeiters can usually afford to make substantial investments in equipment which are designed to produce fake products. Add to this the fact that licensed users of patented materials could be tempted to substitute cheap illegal generics, especially when living in a tough and uncertain economic era, the issue becomes even more clear.

    Fortunately, there are options available for businesses aiming to combat counterfeiting, duty evasion and other forms of illicit trade — even when the issue is difficult to detect or prove.

    Highly secure brand & product authentication programmes by specialist industrial technology companies like Tracerco can prove invaluable tools, for one, due to their ability to detect and deter counterfeiting, counter duty evasion, manage liability issues, detect product adulteration or dilution and manage licensed use.

    Then there are forensic solutions, which can prove effective when prosecuting perpetrators. Wide-scale publicity for an authentication programme within the supply chain should not be underestimated either, as such action can provide a strong deterrence without the need for the issue to revert to court action.

    The return on investment that is available for introducing these kinds of solutions into a business is high too, thanks to the cost of the technology often being recovered quickly once sustained brand equity, increased sales and reduced liabilities are calculated. There’s also the added benefit that all of these factors can result in improved shareholder value for the business concerned.

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    Stuart O'Brien

    All stories by: Stuart O'Brien