Once contained to the touristy marketplaces of South East Asia, counterfeiting is now infiltrating the cosmetics industry more than ever. The latest report from the Office for Harmonization in the Internal Market (OHIM) for the EU Observatory on Infringement and Intellectual Property Rights has found counterfeiting is becoming more and more prevalent within the make-up sector.
The report states the sales of counterfeit perfume, make-up and personal care products in the EU is currently costing legitimate manufacturers, retailers and distributors up to £3.4 billion annually. This accounts for nearly eight per cent of overall sales in the cosmetics market.
President of OHIM Antonio Campinos says the news is far from positive for the beauty industry and reveals a potential problem: “This report is just the first in a series of reports which, when taken together, will show the negative economic impact of counterfeiting and piracy on the EU economy.”
Campinos refers to the study’s prediction that counterfeiting will have a detrimental effect on the supply chain aspect of the industry. OHIM estimates businesses in the EU will lose £6.8 billion of sales revenue as a result of the increase in mock beauty products - equating to 50,000 job losses in total.
While OHIM’s study only analysed counterfeiting in the EU and UK, it implies there may be a trickle-down effect on the rest of the global beauty industry, including Australia.
