FMCGs lose 30% revenue to fakes

With the biggest brands and e-commerce giants falling prey to counterfeit products, time has come to address this issue across sectors – FMCG being one of the most significant as consumers are directly exposed to these counterfeits in their day-to-day lives.

Accounting for over 30% business revenue, reports suggest that Fast Moving Consumer Goods (FMCG) packaged industry remains the worst affected industry due to counterfeiting because of the huge losses on business and impact on consumer health.

In India, Consumer goods sectors that are relatively more prone to counterfeit trading are alcohol, consumer packaged goods, personal care products, tobacco, mobiles and mobile components, automobile components and computer hardware and software. The estimated value of counterfeit and smuggled goods of these, grew from Rs 729 billion in 2012 to Rs 1,054 billion in 2014, according to a study by consultancy firm KPMG.

Recently, The Food and Drug Administration (FDA) busted a racket and seized fake cosmetics products worth Rs 2.39 crore from a shop at the Sarang Street of Crawford market.

The FDA team found an elaborate set-up in the cramped room complete with machinery and packaging equipment. Products belonging to brands such as L'Oreal, Lakme, Revlon, Olay, Elle 18, Nivea, Fair & Lovely and several others were found in the premises. Every year millions of people are deceived into buying counterfeited food and beverages, posing significant health and safety risks, leading the demand of anti-counterfeit packaging (ACP).

Even more astounding are the figures of the FMCG industry - A study by advisory firm KPMG and the Federation of Indian Chambers of Commerce and Industry (Ficci) indicates that sales of fake consumer goods are growing faster than the overall consumer products market.

Counterfeiting in packaged food has resulted in many cases where consumer health has been impacted, and brand equity built over many years has suffered. Technological advancement, especially in the print industry, has helped counterfeiters create replicas of leading FMCG brands, thereby, making the FMCG and alcoholic beverages sector more vulnerable to the illicit trading of counterfeits in India.

With increased incidents of counterfeiting activity in FMCG industry, secured anti-counterfeiting packaging (ACP) has become the first line of defense against un-authorized attempts to steal, replace or modify merchandise of all types. Further, in combination with digital authentication technologies, they can be medium for consumer engagement.

In a move to address these concerns in the FMCG sector, Authentication Solution Providers’ Association (ASPA) and Messe Frankfurt India (MFI) have joined hands to bring authentication solutions to the forefront through a focused exhibition cum conference - ‘The Authentication Forum’, in the city next month. The conference will take place from 8 – 9 February, 2017 at Taj Mahal Hotel, Man Singh Road, New Delhi.

ASPA has already developed authentic solutions that are empowering consumers, brand owners and government authorities to easily identify genuine goods and products. They have developed a mobile and web application and an SMS facility that will enable brand owners and consumers to authenticate the originality of the products.

At present, various government authorities and brand owners are adopting these solutions in the interest of society. More than five states in India are already using security holograms and other initiatives in the pipeline will be discussed at this forum. One of the key highlights of ‘The Authentication Forum’ will be its display area where leading anti-counterfeiting solutions companies will demonstrate these technological offerings and discuss the latest generation authentication solutions.