CEO – how would you describe counterfeiting Italian style?
RW – Let's start with some numbers. Indicam, an Italian association of Italian manufacturers against counterfeiting, reckon that Italy is in first place in Europe for the production for counterfeit goods, and holds third place in the world! Just behind South Corea and Taiwan. Italy is also considered to be number one in Europe as a market for counterfeits. Without forgetting a third factor.
CEO – That is?
RW – Italy is also in the foremost as a port-of-call for counterfeit goods en-route to the rest of Europe.
CEO – What are the principal sectors that are hit by Italian counterfeiting?
RW – Mostly leisure products, ie designer clothing watches, home entertainment DVDs, CDs, video game software, etc.
The turnover has been calculated to be around 6 billion Euros per annum.
CEO – What about pharmaceuticals, spare parts for motor vehicles etc. A problem we know exists is South East Asia for example.
RW – The problem certainly exists but the proportions are limited. Italians are careful, sophisticated, shoppers and, whereas they are happy to spend less on “luxury” “non essential” goods, they tend to steer clear of fakes that are potentially dangerous for them.
CEO – How is it that Italians are such keen clients for counterfeit goods? In the rest of the world we have the impression that Italians are hooked on designer clothes, for example, and would never accept an imitation!
RW – Yes the Italians are hooked on designer clothes but they also have a well developed sense of quality. So when they see a quality counterfeit bag or blouse, costing a fraction of the price, they say why not? I remember, years ago, when the Louis Vuitton bags were very expensive and limited in numbers for the Italian market. Counterfeits suddenly appeared and the “smart set” made a point of buying them and showing them off “Look at this great bag. It cost practically nothing darling!”.
CEO – So you're saying it is the high quality of counterfeit goods that persuades Italians to purchase. But don't they realise that the counterfeiting industry is a cover for Organised Crime?
RW – The high quality that counterfeiters have reached is a very important factor. Another one, a sad one, is that counterfeiting, as opposed to prostitution, drug pushing and burglary shows its respectable face to the world. It's hard to feel guilty when a poor immigrant offers you a fake, good quality CD or a Fendi bag that looks great. Nobody thinks about the sweat-shops and the squalor that are behind this façade. |
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CEO – What about the production side of counterfeit? How did that develop to such a level in Italy.
RW – Apart from the obvious answer of demand and supply, you need to realise that the Italian manufacturing industry, driven by rigid labours laws, was quick to discover the benefits of domestic outsourcing, long before shifting manufacture to the Far East first and eastern Europe later. Italy today has hundreds of thousands of small to medium workshops factories producing everything from screws to high fashion clothing. It only takes a very small fraction to indulge in overrunning third party production lines, or just making copies, to explain the size of the problem.
Another interesting angle is that Italian counterfeit goods are gaining a reputation world-wide just like the original, made in Italy, articles. Fake Rolex watches are now being offered on the Internet, guaranteed “Italian-crafted”. How about that?
CEO – And the port-of-call phenomenon?
RW – Semi assembled or un-labelled goods are increasingly arriving in Italy that are destined for other European countries. The point is that it is hard for customs officers to identity as counterfeit anonymous goods or goods that are not known in Italy.
A few years ago we were contacted by an American manufacturer of up-market sports wear. The brand was not present in Italy but was very popular in the UK and the US. They had noticed that copies of their goods were being sold at rock-bottom prices in the UK. We investigated and, by following the transport trail backwards from the UK, discovered a large warehouse in North Italy. The goods were being imported, labelled and packaged, at practically no risk and then sent on to the UK where they were, in fact, a quality commodity.
The wholesaler was running a two-tier operation, legitimate and counterfeit. The counterfeit goods were kept hidden behind a false wall. When the place was raided and we looked behind the wall we found a veritable Aladdin's cave.
CEO – What are the main obstacles to fighting counterfeiting in Italy?
RW – Things have improved greatly over the past few years but bureaucracy is still a big problem. For example process serving. In Italy it is the registered fiscal address that counts not the operations centre.
In the case I mentioned earlier the warehouse was located in one province and its registered legal address in another. We had to organise a joint-action involving two different courts on the dame day. All this during August which is holiday month in Italy. No mean feat!
CEO – Tell us something about Pyramid International.
RW – We set up in Italy many years ago, and cater, above all, to multinational firms operating in and around Italy. The added value we offer is a combination of hands-on local knowledge and international experience. |
