EAC grapples with fake goods
The deputy director, enforcement and legal services, Anti-Counterfeit Agency, Ms Magdalene Munyao, inspects documentation of suspected fake electronic gadgets at an earlier event. PHOTO/FILE
What you need to know:
- Region losing about Sh56 billion to counterfeits mainly imported from the Orient
Businesses in the East Africa are losing about Sh56 billion annually in missed opportunities to counterfeit products, making it the biggest headache for manufacturers and importers of genuine products.
Whereas those involved in producing fake or substandard goods smile all the way to the bank, genuine producers are bleeding and calling for help.
For buyers hard pressed with varying and competing consumption needs, cheap becomes attractive. This only means one thing — lost business and strain in resources as the country moves to deal with the negative effects of counterfeit products.
“We are estimating that our region is losing about $600 billion per year due to counterfeits,” says outgoing East African Community secretary general Juma Mwapachu.
Kenya Anti-Counterfeit Agency official Casper Aluoch says the most popular sub-standard products originate from Asian countries such as China, Singapore, Taiwan and Malaysia.
Equally interesting is that the same countries are producers of some of the best quality products in the world, with those in the know noting that it is mostly a question of pricing.
The agency recently impounded Bic ballpoint pens worth Sh10 million at the Port of Mombasa purporting to have been manufactured under the Haco Tiger Brands.
“We normally sell at least 150 million ballpoint pens across the East African market per year. But the sales have gone down tremendously this year due to counterfeits,” says Haco Tiger brands managing director Polycarp Igathe, adding: “This trend must be stopped to save our business.”
Haco’s case is not an isolated one. A fortnight ago, officers from the Kenya Bureau of Standards (Kebs) regional office in Eldoret seized thousands of labels of Viceroy brandy, a popular spirit among local consumers.
“Our inspectors at the Eldoret Airport suspected foul play when they noticed Viceroy labels being airlifted to Nairobi. They contacted Kwal officers who disclaimed the cargo. We seized them but the owner is still at large,” says Kebs deputy regional manager in Eldoret Isaac Mureithi.
Mobile handset and electronic distributors are also grappling with the same issue.
Other common contraband products in the region, besides alcoholic drinks, are sugar, pharmaceuticals and rice.
In Uganda, Nice House of Plastics, known for producing toothbrushes, recently lost revenue worth Sh2 million in terms of toothbrushes to counterfeits from Asia.
The director of the Fair Competition Commission in Tanzania, Mr John Mponela, says counterfeit Kiwi shoe polish has been phased out of the Tanzanian market after a sensitisation drive on differentiating the original from a fake.
This, Mr Mponela says, has helped many firms in Tanzania get a bigger market share and stay afloat following consumers’ realisation that similar products from outside Tanzania are not genuine as previously assumed.
Anti-counterfeiting agencies in the region have, however, a big task at hand due to the new global nature of counterfeiting and the absence of enough staff at ports of entry. More than 2,000 containers arrive at Dar es Salaam and Mombasa ports every day, posing a big challenge to understaffed and lethargic anti-counterfeiting bodies.
Similarly, the few inspectors available lack expertise to detect poor quality products.
The biggest hurdle to fighting the menace has been lack of a common EAC legislative framework to ensure fair trade practices and consumer protection.
“Each of the member states is initiating different types of laws but none of these are robust enough to counter the problem, yet counterfeits cross borders,” says Mr Mwapachu.
Intercept and seize
He says laws that would empower security officials to intercept and seize any counterfeit shipment by sea, air or land and subject them to a fine, or see the same destroyed, are yet to be put in place.
The existing Anti-Counterfeit Act (2008) of Kenya and the Merchandise Mark Act of Tanzania are not stringent enough to control such business at Mombasa and Dar es Salaam ports, respectively.
Mr He Shuangqi from the Chinese embassy in Uganda told a newspaper in Kampala early this year that local importers who overlook quality for price were partly to blame for counterfeit Chinese products.
The Chinese official said since the 2008 baby milk incident which saw more than 200,000 infants fall sick, the Chinese Government has been tough on manufacturers of substandard products.