EXECUTIVE SUMMARY

One of the latest threats facing the global manufacturing industr is the !resence of s!urious"substandard in the mar#et$ The %orld &ealth Organi'ation (%&O) estimates that counterfeit account for a!!ro*imatel +,-. of the total /orld/ide trade inmanufacturing$ According to the %&O0 1a counterfeit !roduct is one /hich is deliberatel and fraudulentl mislabeled /ith res!ect to identit 0 com!osition0 and"or source$1 This definition of counterfeit includes not onl com!letel fa#e !roduct but also those that ha2e been tam!ered /ith0 adulterated0 diluted0 re!ac#aged0 or relabeled so as to misre!resent the dosage0 origin0 or e*!iration date0 as /ell as those substandard !roduct that are chea!l !roduced in order to ma#e unla/ful !rofits$ Re!orts sho/ that substandard !roduct are a2ailable in the mar#et /orld/ide$ These re!orts are not onl from the !oor or de2elo!ing countries but also from the de2elo!ed /orld$ &o/e2er0 this !roblem is much more se2ere in de2elo!ing countries than in countries such as the US0 U30 Canada0 and other industriali'ed countries$ In 45550 the health ministr in Russia re!orted that +6 drugs /ere counterfeit$ The follo/ing ear0 a!!ro*imatel 7$6. of all !harmaceuticals in Russia /ere found to be fa#e$ The United States 8ood and 9rug Administration (US 89A) re!orted that in s!ite of stringent controls0 the number of cases of counterfeit drugs had increased in 455: com!ared to the number of cases fi2e ears earlier$

Introduction of spurious products

S!urious !roduct are those !roduct /hich ha2e a loo# li#e name identit 0 color0 !attern0 design and could ha2e same identical name $ The are counterfeit or fa#e !roduct$ These are !roducts that are similar in sha!e0 si'e and colour to the !rominent brands$ Manufacturers of such s!urious brands mostl ride !igg bac# on the ad2ertising cam!aign of larger !la ers and establish their o/n brand in the region$ The loo#,ali#es s!ort colour schemes that resemble that of !o!ular brands0 but the brand name is totall different$ The s!ell,ali#es are more dubious than the loo#,ali#es$ The !ac#aging is similar to that of established brands0 and ou ma ha2e a ;Viggo< instead of a ;Vicco< or a ;=omes< instead of a ;=onds<$ The third 2ariet is the e*act du!licate$ These carr the name and address of the genuine com!an 0 but the !roduct inside is s!urious$

Counterfeit and Pass off Products

Counterfeiting is a #ind of du!lication /here e2en the original manufacturer /ould not be able to distinguish bet/een a genuine and a fa#e !roduct$ These fa#e !roducts bear the identical name of the original !roduct0 its !ac#aging0 gra!hics0 color !attern0 design and e2en same name and address as the genuine manufacturer$ A !ass,off !roduct0 on the other hand0 is one that comes /ith a fe/ minor changes from the original !roduct$ The slight changes are made to a2oid being categori'ed legall as counterfeits$ > The Economist> defines counterfeit as0 >something that is forged0 co!ied or imitated /ithout the !er!etrator ha2ing the right to do it0 and /ith the !ur!ose of decei2ing or defrauding$> Such rights are legall enshrined in !atents (lin#ed /ith in2entions)0 co! right (/hich co2ers literar 0 musical and artistic /or#s and soft/are)0 trademar#s (/hich include /ords0 !ictures and s mbols)0 industrial designs and other forms of intellectual,!ro!ert !rotection$ Counterfeiting decei2es the consumer$ It thus tarnishes the image of a genuine manufacturer0 as its brand is a !romise of ?ualit and 2alue$ The @rand , a com!an 1s most 2aluable asset can be destro ed /hen a trademar# is im!osed on counterfeit !roducts of inferior ?ualit $ %hen a brand loses 2alue0 legitimate business loses sales and this can !ose a long, term threat to !rofitabilit $ Counterfeit !roducts include an !roduct bearing an unauthori'ed re!resentation of a manufacturer1s trademar# or trade name$ E*am!les of !roducts /hich ha2e been counterfeited include !rescri!tion and o2er,the,counter drugs0 clothing0 credit cards0 /atches0 !acema#ers0 and machine and automobile re!lacement !arts$ @ecause counterfeit !roducts are often of sub,standard ?ualit 0 there are !otential safet ris#s /hich ma cause !ersonal inAur as /ell as economic loss$

Counterfeiting decei2es the consumer$ It thus tarnishes the image of a genuine manufacturer0 as its brand is a !romise of ?ualit and 2alue$ The @rand , a com!an 1s most 2aluable asset can be destro ed /hen a trademar# is im!osed on counterfeit !roducts of inferior ?ualit $ %hen a brand loses 2alue0 legitimate business loses sales and this can !ose a long, term threat to !rofitabilit $ Onl in India0 the >fa#e> mar#et is estimated to be /orth more than B4 billion and it1s gro/ing b nearl 45. e2er ear$ The cost to the to! com!anies in India is a /ho!!ing Rs C0555 crore !er annum due to com!etition from counterfeit !roducts or loo#,ali#es0 e*cluding the crores of ru!ees s!ent to !rotect to!,selling brands from this threat$ The !ractice of counterfeiting is illegal$ India does ha2e la/s !rotecting Intellectual =ro!ert $ &o/e2er0 in !ractice0 !rotection is /ea#$ 8ighting counterfeiting re?uires clear rules on enforcement and trained !olice0 Audges and customs officials$ It also re?uires the inclination and the authorit to chec# and sei'e sus!ected counterfeits$ Counterfeiting as a menace is a global !henomenon$ Com!anies /ill ne2er /in the /ar against counterfeiting on their o/n$ At best the /ill #ee! counterfeiters on the run$ In order to ebb the rising tide of counterfeit0 industr needs to /or# in tandem /ith the go2ernment and create consumer a/areness$ =ass offs are those !roducts /hose brand names are !la ed around /ith0 to sound and resemble the original !roducts$ This ho/e2er is onl are face of the massi2e illegal trade in the sale of fa#e !roducts in the rural mar#et$

TYPES OF SPURIOUS PRODUCTS

S!urious brands are !assed off in three formsD 1. Loo !a"i es# These are !roducts that are similar in sha!e0 si'e and colour to the !rominent brands$ Manufacturers of such s!urious brands mostl ride !igg bac# on the ad2ertising cam!aign of larger !la ers and establish their o/n brand in the region$ The loo#,ali#es s!ort colour schemes that resemble that of !o!ular brands0 but the brand name is totall different$ The loo#,ali#e business is done o!enl $ The manufacturers do !romotional cam!aigns and e2en go to the e*tent of dis!la ing their manufacturing units< names and addresses on !roduct /ra!!ers$ The !roduct too ma be of acce!table ?ualit and is !riced :5,:+ !ercent lo/er than that of the established brands$ The margins offered to /holesalers and retailers are also higher than /hat established com!anies offer$

$. Spe""!a"i es# The s!ell,ali#es are more dubious than the loo#,ali#es$ The !ac#aging is similar to that of established brands0 and ou ma ha2e a ;Viggo< instead of a ;Vicco< or a ;=omes< instead of a ;=onds<$ These are ob2iousl intended to cheat$ Such s!ell,ali#es generall ha2e the genuine !roduct<s MR= !rinted on them0 but the retailer /illingl lo/ers the !rice after a bit of bargaining$ Most s!ell,ali#es ha2e an e*tremel 2ague manufacturers< address on the !ac#aging that is im!ossible to trace$

%. Dup"icates# The third 2ariet is the e*act du!licate$ These carr the name and address of the genuine com!an 0 but the !roduct inside is s!urious$ 9u!licates ha2e the established manufacturer<s address0 as the !ac#aging is usuall bought from Aun# sho!s$ Used !ac#ets are refilled /ith s!urious !roducts and !assed off as the real thing$ The are the most dubious of the lot because the can rarel be identified$ 9u!licates hit cold be2erages hardest because the bottles are easil a2ailable and can be refilled /ith some colourful ;soda /ater<$

Eliminating s!urious brands is not an o2ernight affair0 but their cam!aign to do so ma get them negati2e !ublicit as /ellE consumers ma a2oid the !roduct altogether0 fearing that the ma be bu ing du!licates$ And finding the counterfeiters is 2er difficult as these fl ,b ,night o!erators can easil change the locations the o!erate from$ @esides0 e2en if a manufacturer is nabbed0 getting bail is not difficult as the offence is non, cogni'able$ It merel halts the illegal acti2it for a tem!orar !eriod$ It<s soon bac# to business at a different address0 in a different grab$

T&'LE
India is the /orld1s Fleading !roducer1 of counterfeit drugs and the 8MCG industr in India loses Rs 40655 crore !er ear to fa#e goods manufacturers$ >Hame the !roduct and ou /ill find bet/een t/o and 455 co!ies of it that com!ete for customer attention$ At times it also ha!!ens that in the usual !ac#et of :5 tablets ta#en o2er the counter b customers0 a cou!le of it ma be fa#e0 /hich had been remo2ed at some !oint of time in the chain$11 Scar $

List of Fa e (rands a)ai"a("e in rura" areas

Ori*ina" Product 9air Mil# 3it 3at Coffee @ite Mango @ite =olo

Fa e Product 9ail Mil# 3ir 3at Coffee Toffee Mango ri!e I Mango @its Rolo

Vic#s &ead and Shoulders Sunsil# Thums U! Jehar Jifebuo Tata =onds 8air I Jo2el =arachute Clinic =lus =arle K G Colgate Tooth!aste Vicco Ju* =e!si LU=

Vibe*0 Vi#as &ead and Sho/ers Sunmil# Toss U! Jahar Jo2ebo Teta =omes =ure I Jo2el =arashudh Cosmic =lus =arla K G Collegiate Tooth!aste Viggo Ju# Ti!s 0 Si!s 0 9i!s :U=

+here spurious (rands e,ists

'R&-DS 9abur Vati#a Clinic Clear Surf E*cel O* gen &orlic#s All

-o. of "oo a"i e .a/or States 'rands 4 7=un"&ar0 Assam 9el0 Assam0 @ihar0 M$=$ @ihar0 %$@$0 GuA0 M$=$0 Maha Assam0 3arnata#a %$@$0 @ihar0 M$=$ Assam0 @ihar0 Maha RaA0 U$=$ =un " &ar U$=$0 M$=$ Assam U$=$0 GuA0 M$=$ @ihar0 GuA0

He/ Act + 4

Colgate 9ental M Cream Colgate Tooth 6 =o/der 9abur Amla 7C

=anteen =ro,V L He/ Ariel =o/er C Com!act Iode* 46

These loo#,ali#e or imitation !roducts effecti2el com!ete against the originals in the mar#et !lace thereb costing the legitimate industr crores in re2enue$ As !er the latest media re!orts there are around :4- 2ersions of =arachute &air Oil and CC t !es of Vic#s Va!oRub$ According to a re!ort from the &indu ne/s!a!er0 it /as re2ealed that for e2er :55 genuine stri!s of Vic#s Action +55 there /ere +C loo#,ali#e stri!s in mar#et$ Similarl there /ere around se2en loo#,ali#es for e2er :55 genuine Vic#s Cough 9ro!sE fi2e loo#,ali#es for e2er :55

genuine Vic#s Va!oRubE in total0 there are :56 Finfringers1 on the Vic#s franchise$

It is eas0 to "aunch spurious products

=roduct counterfeiting is big business$ It is !rofitable as /ell$ The counterfeiter ma#es mone b dece!tionN deliberatel assuming the identit of an established0 re!utable manufacturer$ The counterfeiter does not need to in2est in e*!ensi2e ?ualit material or ?ualit control since the !roduct he is !roducing is inferior$ &e does not need to incur e*!enditure on RI90 ad2ertising cam!aigns or mar#eting as he is riding !igg bac# on a manufacturer /ho has in2ested enormousl in de2elo!ing or !romoting a brand$ All he needs to do is thus co! a !o!ular !roduct0 sell it at a discount and ra#e in the !rofits as his o2erall costs are lo/ in com!arison to those of a genuine manufacturer$

+h0 spurious products e,ists more in rura" areas

The reason for the s!read of S!urious0 Counterfeit and adulterated !roducts all across the countr is that illegal manufacturers ma#e a tremendous !rofit from the !roduction and distribution of these goods$ The reason for such !rofitabilit is that man of these indi2iduals carr on fl b night o!erations in small labs or in old factories and garages$ The 0 unli#e legitimate manufacturers do not s!end an mone or resources in establishing /orld,class labs /ith international

safet and h giene standards$ The s!end no time or funds conducting clinical tests or research I de2elo!ment (RI9) for the !roducts the !roduce$ As the do not ha2e an substantial o2erheads0 all the mone deri2ed from the sale of such !roducts goes directl into their !oc#ets$ All these manufacturers ha2e to do is to sim!l co! the formula0 com!osition0 te*ture etc of the original !roduct0 re!roduce it<s !ac#aging and then sell it in the mar#et$ The fa#e or imitated !roducts cash in on the success of the original !roduct$ The cost of ad2ertising0 research0 de2elo!ment0 trials0 o2erheads0 etc is all borne b the original com!an or !roduct manufacturer$ Ad2ertising cam!aigns cost large 8MCG com!anies crores of ru!ees$ All the s!urious manufacturer has to do is co! the entire !roduct at the cost of a fe/ thousand ru!ees and sell it in the mar#et !lace$ E2en the ingredients are bad imitations of the original and most consumers are not able to ma#e out the difference or find out onl after !urchasing the !roduct$ Mean/hile the s!urious manufacturer ma#es a #illing in the bargain$ 9ue to the ad2ances in technolog an measures ado!ted b the original !roduct manufacturer to counter and !re2ent an imitation /ould almost be of no use as the s!urious manufacturers /ould ?uic#l ada!t and re!roduce the same !roduct /ithin a fe/ months$ A lac# of enforcement of e*isting la/s b the concerned authorities has contributed to the /ides!read imitation of these #inds of !roducts$ The manufacturers of such drugs and medicines are ?uite confident that since the offence is difficult to !ro2e the /ould not face an serious charges $So far the offence being a bailable one0 illegal drug ma#ers could onl be boo#ed for minor charges$ The rate of con2iction for such offences /as e*tremel lo/$ 9es!ite crores of ru!ees /orth of drugs being sei'ed b la/ enforcement authorities from time to time it seems to ha2e had no real effect on the manufacture and trade in fa#e and counterfeit !roducts$ Raids conducted b the rele2ant authorities had real no

effect and as soon as the raids /ere o2er the s!urious manufactures /ould shift their o!erations to another localit $ There /ould be almost no follo/ u! action b the authorities$ Most im!ortantl since there is almost no consumer a/areness about Counterfeit0 S!urious and Adulterated !roducts the counterfeiters are able to continue selling their dangerous !roducts$

The !roblem of fa#es is more ram!ant in rural areas due to lo/ literac le2els and consumers reliance on !roduct identification through

Pneumonic

In rural India0 /here the incidence of !irac is four times that of urban India0 the im!act of counterfeits is e2en more !ronounced$ &o/e2er0 the consumer is either una/are or a!athetic to the menace$ >Since s!urious goods sold under fa#e

brands !h sicall im!act the consumer0 a consumer !ush is needed to act as a necessar catal st to address the !roblem011 he sa s$ Since the rural consumer is illiterate and e*!osed to 2arious brands onl through the media0 the chances of him going to the mar#et /ith a fla/ed brand recall and being du!ed are high$ This e2entuall affects his !ost,!urchase decisions and can harm the image of the com!an $ The fa#e or imitated !roducts cash in on the success of the original !roduct$ The cost of ad2ertising0 research0 de2elo!ment0 trials0 o2erheads0 etc is all borne b the original com!an or !roduct manufacturer$ Ad2ertising cam!aigns cost large 8MCG com!anies crores of ru!ees$ All the s!urious manufacturer has to do is co! the entire !roduct at the cost of a fe/ thousand ru!ees and sell it in the mar#et !lace$ E2en the ingredients are bad imitations of the original and most consumers are not able to ma#e out the difference or find out onl after !urchasing the !roduct$ Mean/hile the s!urious manufacturer ma#es a #illing in the bargain$ 9ue to the ad2ances in technolog an measures ado!ted b the original !roduct manufacturer to counter and !re2ent an imitation /ould almost be of no use as the s!urious manufacturers /ould ?uic#l ada!t and re!roduce the same !roduct /ithin a fe/ months$ A lac# of enforcement of e*isting la/s b the concerned authorities has contributed to the /ides!read imitation of these #inds of !roducts$ The manufacturers of such drugs and medicines are ?uite confident that since the offence is difficult to !ro2e the /ould not face an serious charges $So far the offence being a bail able one0 illegal drug ma#ers could onl be boo#ed for minor charges$ The rate of con2iction for such offences /as e*tremel lo/$ 9es!ite crores of ru!ees /orth of drugs being sei'ed b la/ enforcement authorities from time to time it seems to ha2e had no real effect on the manufacture and trade in fa#e and counterfeit !roducts$ Jea2e alone the 2ast uneducated masses that li2e in this countr 0 hardl an of the educated informed consumer /ould also be in a habit of 2erif ing the accurac of the !roduct

name or manufacturer before bu ing goods at the local #irana sho!$ A recent stud conducted b AC Heilson re2eals that -5. of consumers reali'e the ha2e brought a counterfeit or fa#e !roduct onl after the ha2e consumed it$ And there ma be a large number of those /ho ne2er reali'e the same e2en after consum!tionO Rural consumers also find uni?ue uses for !roducts$ A /ashing machine being used to churn lassi in =unAab is no/ !art of fol#lore0 but here are more anecdotes0 &orlic#s is used as health be2erage for cattle in @ihar0 in &ar ana0 GodreA &air 9 e is used to ma#e a !itch blac# beaut out of a buffalo and Horth Indian /ea2ers are using condoms$ 8or /hatP %ell0 to !rotect their fingersO Villagers react differentl to different !roducts0 colours0 si'es0 etc$ in different !arts of India$ Thus utmost care in terms of understanding consumer !s che needs to be ta#en /hile mar#eting !roducts to rural India$ Thus0 it is im!ortant to stud the thought !rocess that goes into ma#ing a !urchase decision0 so that mar#eters can reach this huge unta!!ed 9ue to a lac# of consumer a/areness0 /ea# enforcement of e*isting la/s and ra!id inno2ations in technolog 0 the !roduction and distribution of fa#e and counterfeit !roducts has become so /ides!read that0 toda no consumer can be sure of the authenticit of the !roduct he or she he has !urchased$ Toda man consumers are du!ed into belie2ing that the !roducts the are bu ing are genuine /hen in realit the are actuall fa#e$ Such s!urious !roducts ha2e greatl ham!ered the gro/th of consumer goods industr and negati2el im!acted consumer good/ill$ The loo#,ali#e manufacturers1 strateg is to !igg bac# on the ad2ertising cam!aign of the larger !la er and establish

their o/n brand in the region$ The researchers found that the loo#,ali#es business is not a clandestine o!eration$ =romotional cam!aigns such as /all !aintings and dis!la stalls are used and the manufacturers ha2e no ?ualms about dis!la ing their manufacturing units1 name and address on the !roduct /ra!!er$ The !roduct too is al/a s of acce!table ?ualit $ &o/e2er0 the loo#,ali#e !roduct is !riced :5,:+ !er cent lo/er than the established brand0 /ith margins offered to /holesalers and retailers higher than /hat established com!anies offer$ &o/e2er0 it1s not the same case /ith s!ell,ali#es and du!licates$ The manufacturers in2ol2ed in both these ob2iousl intend to cheat$ Such s!ell,ali#es generall ha2e the genuine !roduct1s MR= rate !rinted on them0 but the retailer /illingl brings do/n the !rice after a bit of bargaining$ Most s!ell,ali#es ha2e an e*tremel 2ague manufacturers1 address on the !ac#aging that is im!ossible to trace$ @ut du!licates ha2e the established manufacturer1s address0 as the !ac#aging is usuall bought from the raddi/alla route and filled /ith a s!urious !roduct$ In terms of ?ualit 0 MART found that s!ell,ali#es and du!licates ha2e 2er !oor ?ualit and the consumer realises that he or she is du!ed after using the !roduct$ In fact0 the Hielsen re!ort re2ealed that eight out of :5 customers /ho !urchased such !roducts /ere cheated un/ittingl $ %hat ma#es things /orse is the marginal !enetration of the genuine !roduct into these areas$ Another interesting obser2ation is that 8MCG counterfeit !roducts onl come in the smallest si'e of !ac#aging$ In the rural segment and slums /here fa#e !roducts thri2e0 the consumers lo/ !urchasing !o/er ma#es sachets and 4+g and 75g !ac#s !o!ular$ And it is in the case of these small !ac#s that consumers are du!ed more easil as the ?uantit is not large enough for the bu er to discern its ?ualit $ This is s!eciall so in sachets of sham!oo0 hair oils0 detergents and so on$

@ut if small is s!urious in the 8MCG sector0 it is not so in the other segments /here counterfeit is ram!ant$ Cr ing for similar attention is the branded garment industr 0 boo# !ublishing0 music industr 0 mo2ies and information technolog $ And man more challenges$

&du"terated Products ! & Dan*erous .i,

Introduction

The nature0 t !e0 ?ualit I ?uantit of food !la an im!ortant role in the maintenance of health and /ell being of all indi2iduals$ 8ood safet is an essential !ublic health issue for all consumers$ &o/e2er man consumers in India I other de2elo!ing countries0 are often e*!osed to /illful adulteration

of their food stoc# and su!!l $ Adulteration of mil# and mil# !roducts0 s!ices0 edible oils0 and e2en alcohol I be2erages and the use of colours to mas# !roduct ?ualit to cheat the consumer are ?uite common$ This can lead to health ha'ards and to financial losses for consumers0 families0 communities0 and countries$ A!art form this0 such e!isodes in2o#e !ublic outrage and anger as it 2iolates !ublic trust in the integrit and safet of the food su!!l $

+hat Is &du"terated Food1

According to the =re2ention of 8ood Adulteration Act0 :M+C an article of food shall be regarded as adulterated ,

If the article sold b a 2endor is not of the nature0 substance or ?ualit demanded b the !urchaser or /hich it !ur!orts to beE If the article contains an substance affecting its ?ualit or of it is so !rocessed as to inAuriousl affect its nature0 substance or ?ualit E

If an inferior or chea!er substance has been substituted /holl or !artl for the article0 or an constituent of the article has been /holl or !artl abstracted from it0 so as to affecting its ?ualit or of it is so !rocessed as to inAuriousl affect its nature0 substance or ?ualit E

If the article had been !re!ared0 !ac#ed or #e!t under unsanitar conditions /hereb it has become contaminated or inAurious to healthE

If the article consists /holl or in !art of an filth 0 !utrid0 disgusting0 rotten0 decom!osed or diseased animal

or 2egetable substance or being insect,infested0 or is other/ise unfit for human consum!tionE

If the article is obtained from a diseased animalE

If the article contains an !oisonous or other ingredient /hich is inAurious to healthE

If the container of the article is com!osed of an !oisonous or deleterious substance /hich renders its contents inAurious to healthE

If the article contains an !rohibited colouring matter or !reser2ati2e0 or an !ermitted colouring matter or !reser2ati2e in e*cess of the !rescribed limitsE

If the ?ualit or !urit of the article falls belo/ the !rescribed standard0 or its constituents are !resent in !ro!ortions other standard0 or its constituents are !resent in !ro!ortions other than those !rescribed0 /hether or not rendering it inAurious to health$

Sim!l !ut0 an substance that degrades or lo/ers the ?ualit of food is an adulterant$ %hen ou see different t !es of s/eets and edible !roducts /ith bright coloring0 /hich are meant to ma#e the food item a!!ear more a!!eti'ing0 it could contain dangerous and to*ic d es$ Man of these d es I colorings are banned as the cause serious health ha'ards and ma also contain carcinogens /hich ma cause cancer in the long run$ It no/ common for Mil# 2endors in man !arts of the countr to add /ater in their mil#$ Most stomach disorder cases among children are due to adulterated I contaminated mil#$

According to a recent ne/s re!ort0 caustic soda and chemicals0 such as h drogen !ero*ide /ere being used to increase the shelf,life of mil#$ 9air o/ners also use harmful chemicals such as 'entam cin in the mil#$ Soft drin#s ha2e also become a maAor target for adulterators across man !arts of the countr $ The !re!are their o/n coc#tail and sim!l !our it into an old bottle and sell it$ Most consumers are not able to tell the difference and the !urchase the !roduct$ This is es!eciall ram!ant in the rural !arts of the countr /here consumers are onl semi,literate at most and often fall 2ictim to the adulterators$ Colas0 @iscuits0 Chi!s0 Snac#s etc are all being affected b this menace$ Most branded !roducts in India ha2e become a 2ictim of this dangerous menace$ A recent stud estimates that nearl :5 . of all soft drin#s are s!urious$ According to a stud b t/o HGO<s the adulteration le2els in India are at around :5 !ercent$ In de2elo!ing countries li#e India /here a large number of !eo!le eat and consume meals coo#ed b street 2endors one can ne2er be sure of the ?ualit of ingredients used in the !re!arations$ As a result man are made using dangerous and chea! ingredients that result in a number of indi2iduals falling ill and being ta#en to hos!ital$

Precautions

In order to /in the crusade against such adulterated foods and be2erages the e*isting la/s and standards need to be 2igorousl enforced b the rele2ant authorities and harsher !enalties need to be introduced in order to deter such indi2iduals in the future$ 8ood standards for commodities li#e cereals0 mil# !roducts edible oils0 fruits and 2egetables need to strictl !rioriti'ed$

The countr needs to follo/ international food standard such as the Code* standards that aim to ensure strict standards for food safet $$ Also the 89A<s I 8ood testing laboratories all across the countr need to be gi2en more funds to carr out and !erform their functions$

2ea"th ha3ards due to spurious products and adu"terated *oods

Most of the !roducts co!ied are to!,selling brands and consumers could be seriousl affected /hile consuming lo/ ?ualit adulterated !roducts0 !articularl in the food and drug categories$ These are usuall manufactured under unh gienic conditions and /ithout !ro!er technical su!er2ision$

The dangers of counterfeiting are /ides!read$ Counterfeit !roducts are !otentiall ha'ardous$ Acts of counterfeiting can and do create se2ere !ublic health ris#s and safet ha'ards0 besides economic harm$ 1. There is am!le e2idence of !eo!le being inAured or made seriousl ill , and in some cases d ing , after consuming or using a fa#e !roduct$ $. Illegal manufacturers co! the !roduct from start to finish and sell it as the original$ Man of these do not contain the re?uired ingredients and such cosmetics and s#in care !roducts ma contain harmful and to*ic chemicals /hich can cause serious s#in and bod aliments that can lead to infection0 rashes and allergies$ 7$ S!urious sham!oos ha2e e2en been #no/ to cause hair loss and balding$ C$ Counterfeit !roducts0 medicines0 cosmetics0 adulterated foods and be2erages can be dangerous and lethal to unsus!ecting consumers$

+$ A closer ins!ection at some of the counterfeit medicines a2ailable in the mar#et /ould re2eal that ingredients li#e sugar0 chal# !o/der0 /heat flour0 !aste0 fine sand0 limestone !o/der etc are used to ma#e the s!urious drugs$ Man of these #inds of medicines ma be relati2el harmless (although there can be some serious side effects) and ha2e no medicinal or curati2e 2alue as these ingredients are carefull chosen b the illegal manufacturers so that the do not ha2e an serious negati2e effects and do not sho/ u! !rominentl during clinical tests$

6$ &o/e2er all fa#e drugs are not made this /a $ Man are !roduced using some of the same chemicals that are used in the original !roduct$ L$ &o/e2er the dosage0 ?ualit and ?uantit of the ingredient or chemicals are not chec#ed and u!on consuming the medicine a !erson ma suffer an thing from a high fe2er0 nausea and sic#ness to death$ -$ Another reason to be e*tremel cautious is that it is not onl ordinar medicines but life sa2ing drugs (anti,cancer0T@0 Aids etc) as /ell that are being !roduced this /a $ The main difference here is that due to the com!le* nature of the drug and the 2ariet of ingredients used0 s!urious drug manufactures ha2e been #no/ to use the /rong chemicals to !roduce their drugs /hich has resulted in se2eral deaths all across the countr $ These t !es of medicines /ould create more !roblems for the consumer rather than cure the !re,e*isting aliment$

2o4 to identif0 spurious products

The menace of these loo#,ali#e and !ass,off !roducts is not eas to detect since the carr the similar brand name0 gra!hics0 !ac#aging colors and get,u! /ith minor alterations$ This can confuse bu ers0 and the often don<t e2en #no/ that the are bu ing a fa#e !roduct$ These s!urious !roducts re!licating /ell,#no/n brands are of lo/er ?ualit and efficac 0 /ith ad2erse side effects and safet ha'ards to consumers$ 8or

e*am!le0 a lo/,?ualit beaut !roduct can cause s#in rashes and other health !roblems$ MART1s stud has thro/n u! some interesting facts that could hel! in understanding the o!erations underta#en b illegal manufacturers$ Researchers Anirban Ghosh and Vi#ram @halla of the Management 9e2elo!ment Institute (M9I)0 Gurgaon under the guidance of MART =resident0 =radee! 3ash a!0 found that there are three #inds of fa#es in the rural mar#et$ The loo#,ali#es s!ort a colour scheme that resembles a !o!ular brand0 but the brand name is totall different0 for e*am!le0 Shagun for Jifebuo and Jalita Amla for 9abur Amla$ The second categor are the s!ell,ali#es /here ou /ill ha2e a FViggo1 for a FVicco1 or a F=omes1 for a F=onds1 and the !ac#aging loo#s similar$ The third 2ariet are the e*act du!licates /hich carr the name and address of the genuine com!an 0 but the !roduct inside is s!urious$

The colour of the fa#e 1/his# 1 li?uid is slightl !aler than the genuine /his# $ The labels on the bottles0 although 2irtuall identical are slightl lighter in !rint ?ualit on the fa#e item$ The bottle sha!es and ca!s are 2irtuall identical but the le2els to /hich the bottles are filled is different in the fa#e item to that of the genuine item$

Strate*ies to Counter Spurious 'rands

1. Settin* up a specia" tas force# Com!an can set u! an alert tas# to curb the menace of du!licate manufacturers0 offering incenti2es to informers$ 8or e*am!le0 Co#e has been conducting raids against such manufacturers$ To counter the !roblem0 it has !ut into !lace an elaborate s stem$ It has C- consumer

res!onse coordinators across the countr /ho /or# /ith their teams and redress consumer com!laints directl 0 including o2ercharging and s!urious bottling$ @esides0 it has a large net/or# of route salesman /ho ha2e a one,to,one relationshi! /ith the retailers on their beat and #ee! their ears to the ground$ %hen the s!ot sus!icious acti2it 0 the inform com!an officials$ So though it is im!ossible to sto! counterfeiters totall 0 it is !ossible to minimi'e the damage the cause$

2. Up*radin* pac a*in*# Constant u!grading of !ac#aging ma#es it difficult for manufacturers of counterfeits to re!licate !roducts$ 9abur is ma#ing its !ac#aging more so!histicated and ca!ital, intensi2e to foil counterfeits$ In :MMM0 6L !ercent of the sales of its Jal 9ant ManAan /ere eaten into because its !lastic blo/,moulded container /as eas to du!licate$ Ho/ it has come u! /ith !remium four,colour shrin# slee2e !ac#aging0 /hich has a grain te*ture and /ater bubbles0 ma#ing it difficult to re!licate$ This resulted in sales gro/th of :4 !ercent for the com!an $ 9abur<s !o!ular Amla &air Oil too has been facing an increase in counterfeits during the !ast ear,and,a,half0 and the com!an is tr ing to find a solution to the !roblem$ 3. 'etter rura" distri(ution net4or # In order to tac#le s!urious brands0 increasing their !resence in rural mar#ets is more im!ortant for mar#eters than legal action$ A better rural distribution net/or# /ill force manufacturers of fa#e !roducts to flee the scene$ Colgate0 for instance0 has such high rural !enetration that fa#es are hardl to be found$ In fact0 the MART stud suggests that it is the demand,su!!l ga! that fuels the !roblem in this sector$ 9istributors a!!ointed b com!anies

stic# to the 2illages closest to their to/n0 /hile counterfeit !roducts are ser2iced b mobile distributors /ho ser2ice tin sho!s and !aan/allas0 on c cles$ @esides0 in some seasons fa#e !roducts reach retailers /ell before the genuine brand can$ 8or instance0 during summer0 fa#es abound in cold drin#s and talcum !o/der0 /hile in /inter it<s cold cream and !etroleum Aell (Vaseline)$ 4. The peri"s of *oin* sma""# Another interesting obser2ation is 8MCG counterfeits onl occur in the smallest si'e of !ac#aging$ In the rural segment and slums0 the consumer<s lo/ !urchasing !o/er ma#es sachets of 4+ g and 75 g !ac#s !o!ular$ And these consumers are du!ed easil as the ?uantit is not large enough for them to !a attention to its ?ualit $ This is es!eciall so in sachets of sham!oos0 hair oils0 detergents and so on$ Around +5 manufacturers0 legal e*!erts and the research com!an AC Hielsen ha2e come together to form a @rand =rotection Committee under the aegis of the 8ederation of Indian Chambers of Commerce and Industr (8ICCI)$ The @rand =rotection Committee has !ut in !lace a four,fold strateg 0 including focusing on the enforcement of la/s0 !ublishing the negati2e economic im!act of fa#e !roducts0 ta#ing direct action against illegal manufacturers0 traders0 /holesalers and retailers0 and enhancing communication among the sta#eholders$

Loss suffered (0 the industries

The 8MCG industr in India loses Rs$-555 Crore0 /hich is about :+. of total mar#et si'e0 !er ear to fa#e goods manufacturers$ =arma Industr in India loses around Rs$C555 Crore i$e$ C5. to counterfeiters$ Hame a !roduct and ou /ill find bet/een 4 and 455 co!ies of it that com!ete for customer

attention$ The go2ernment loses Rs$:+555 crore and the industr all in all loses Rs$750555 crore to the counterfeits$ &o/e2er0 the main hidden cost to societ comes in the form of the damage to local and !articularl national economies caused b trade in counterfeits$ Jocal economies are damaged b the loss of sales of genuine !roducts that could be made b legal traders and national economies lose millions of dollars in un!aid ta*es and e*cise re2enue$ The AC Hielsen stud estimates the Indian go2ernment loss on account of ta* e2asions b unauthori'ed manufacturers to be around Rs 655 crores$ So0 the sale of counterfeit !roducts has far reaching effects$ It is no longer a 2ictimless crime that onl affects large cor!orations$ Un/ar consumers ha2e suffered0 a fe/ ha2e died and in man cases the !rofits from counterfeiting su!!ort anti, social acti2ities li#e traffic#ing and terrorism$ Counterfeiting of goods is !lain bad business$ The !ractice of counterfeiting is illegal$ India does ha2e la/s !rotecting Intellectual =ro!ert $ &o/e2er0 in !ractice0 !rotection is /ea#$ 8ighting counterfeiting re?uires clear rules on enforcement and trained !olice0 Audges and customs officials$ It also re?uires the inclination and the authorit to chec# and sei'e sus!ected counterfeits$ It thus re?uires the /illingness to !ut counterfeiters in the doc# and out of business as the !enalties for counterfeiting is light com!ared /ith0 for instance dealing in illicit drugs$ The need of the hour is an im!osition of stiff !enalties0 e2en criminal0 if re?uired$

:$ It is estimated that the annual loss suffered b the industr is more than Rs$4+55 crore /hereas the Maharashtra go2ernment loses re2enue of Rs$ 44+ crore e2er ear$ According to a stud conducted b AC Hielsen last ear0 the go2ernment loses on an a2erage :5 !er cent on the sales ta*0 :+ !er cent on e*cise dut and 4 !er cent on octroi$

4$ It is not Aust the consumer<s health and safet that get affected b the use of counterfeit !roducts0 s!urious drugs0 cosmetics and adulterated foods I be2erages$ The im!act of this dangerous and illegal industr has also had an ad2erse im!act on the consumer<s !oc#et as /ell as that of the econom $ 7$ A!art from these counterfeit and !ass,off !roducts are harming India<s re!utation among foreign in2estors as a good I !rofitable !lace to carr on business0 it ma result in ha2ing an ad2erse im!act on foreign in2estment in India0 and hence the Indian econom $ C$ Each time one of the original manufacturers disco2ers that there are chea! co!ies or imitations of his !roduct a2ailable in the mar#et he /ould attem!t to sto! the counterfeiters b changing the !roduct0 using ne/ and im!ro2ed tam!er,!roof !ac#aging0 ne/ labels0 logos0 ado!ting and using holograms etc$ +$ All this translates into more mone being s!ent on the !roduct b the manufacturer and this cost is e2entuall !assed on to the consumer through higher !rices$ 6$ In fact man Aobs are lost in India and through out the /orld as industries cannot com!ete /ith the menace of s!urious !roducts$ L$ %or#ers are laid offE units are closed do/n and due to the !oor ?ualit of the imitations and loo# ali#e brands consumers begin to loose faith in the original brand itself /hich in turn has a negati2e affect on the nation<s econom $ -$ As stated before the Indian go2ernment has lost around Rs M55 crores on account of ta* e2asions b such unauthori'ed manufacturers$ M$ According to a sur2e done b 8ICCI0 the music industr lost around B-5 million$ The same stud sho/s the 8MCG sector

/hich is the 7rd largest industr in India loosing B655,B:0-55 million in the Indian mar#et$ :5$ According to recent media re!orts the !roducts that /ere fair and lo2el creams and clinic !lus sham!oos$ There are ::7 fairI lo2el creams and 7- #inds of clinic !lus sham!oos$ :5. of all cosmetics and toiletries /orld/ide are counterfeit$

Compan0 initiati)es
&"most e)er0one in the )a"ue chain is affected 4hen a (rand is attac ed.

Consumer ris#

Gets life 2alue0 feels cheated and could e2en his life b consuming s!urious goods$

@rand o/ner , Go2ernment ,

loses !rofits0 brand 2alue and customers$ loses ta* re2enue and incurs additional e*!enditure on enforcements due to the =ressure$ to raid counterfeits$

Societ

The resultant deterioration of culture0 breeds 9ishonest beha2ior$

In rural India0 /here the incidence of !irac is four times that of urban India0 the im!act of counterfeits is e2en more !ronounced$ &o/e2er0 the consumer is either una/are of or a!athetic to the menace$ Since s!urious goods sold under fa#e brands !h sicall im!act the consumer0 a consumer !ush is needed to act as a necessar catal st to address the !roblem :$ &industan Je2er has initiated s!ecial tam!er,!roof !ac#s for its deodorant s!ra 1AXE10 /hose no''le can1t be detached from the bod /hile =rocter and Gamble uses s!ecial labels for its Vic#s Va!oRub /hich do not !eel off e2en if soa#ed o2ernight in /ater$ This ma#es it difficult for s!urious goods ma#ers to imitate$ 4$ %oc#hardt has introduced hologra!hic !ac#aging on the blister !ac# of its !ain management brand0 S!asmo =ro* 2on0 to fight the !roblem of counterfeiting$ 7$ %hen =IG realised that its !roduct Vic#s Va!oRub /as under attac# b loo# ali#e goods0 it made label tam!er,!roof$

C$ Gillette India Jimited toda along /ith the crime branch of the Mumbai !olice0 conducted raids on the dealers and retailers of Gillette branded counterfeit and infringing !roducts$ The Gillette !ersonal care range Q sha2e foam0 sha2e gels0 aftersha2e gels0 aftersha2e s!lash and deodorant s!ra Q come /ith a s!ecial label0 !rice stic#er and a com!an hologram stri!0 that hel!s consumers in distinguishing genuine !roducts from fa#es$ +$ In addition0 Sonata has also launched a national consumer a/areness cam!aign dri2en through a !oster cam!aign that informs consumers about the guidelines to be follo/ed /hile !urchasing a genuine brand /atch$ 6$ 8or instance0 &industan Je2er and =rocter I Gamble are /or#ing /ith 8ICCI1s Mumbai,based @rand =rotection Committee (@=C)$ The @=C trac#s do/n manufacturers and sellers of s!urious goods and tries to eliminate these channels b interacting /ith the Go2ernment agencies and Audiciar $ L$ Most of the s!urious !roducts are finding their /a in the mar#et due to strong brand !ull and lac# of reach of genuine Tata Agrico !roducts$ Therefore0 the first and foremost ste! /e are ta#ing is to e*tend the reach of our distribution net/or# to ma#e the !roducts a2ailable to the consumers$ %e also !ro!ose to underta#e communication cam!aigns through this com!rehensi2e distribution net/or# to educate the consumer about the features of genuine Tata Agrico !roducts$=arallel 0 the brand !rotection cell also ta#es action from time to time to deter the su!!lier of s!urious !roducts$ -$ Consider =IG1s e*!erience$ According to official sources0 the com!an 1s troubles began in Se!tember :MM-0 /hen maAor changes too# !lace in the Vic#s franchise$ The com!an mo2ed from the old Vic#s !ac#aging to the Global F@lue1 mega branding !ac#aging0 the !rice of Vic#s !roducts increased and the com!an /as simultaneousl /or#ing on a ne/ distribution s stem$ In 9ecember :MM-0 the first of the loo#,ali#e brands

started a!!earing in the mar#et$ Re!orts from =IG1s field force !ic#ed u! si* !ass,off brands , Endo Action0 Ret Action0 Anadol Action0 A=I Action0 Vicas and Vi#as cough dro!s$ In Ranuar :MMM0 =IG mo2ed the courts and the infringing !roducts of all si* !ass,off brands /ere sei'ed$=IG /ent in for a store audit research /ith ORG,MARG to define the e*act im!act of loo#, ali#es and !ass,offs on the Vic#s business$ It re2ealed that for e2er :55 genuine stri!s of Vic#s Action +55 there /ere +C loo#,ali#e stri!s in mar#et$ Similarl there are se2en loo#,ali#es for e2er :55 genuine Vic#s Cough 9ro!sE fi2e loo#,ali#es for e2er :55 genuine Vic#s Va!oRubE in total0 there are :56 Finfringers1 on the Vic#s franchise$ Ariel0 %his!er and Sham!oos are also affected0 but to a smaller e*tent$ M$ =e!si1s e*!erience has been similar$ It has had to deal /ith co! cat drin#s called 9i!s 0 Ti!s 0 Si!si0 Toss U!0 9ream Cola0 :U=0 Jahar0 and so on$ The !roblem !ea#s in summer0 /hen the consum!tion of colas and Auices 'ooms$ It is eas for manufacturers to set u! sho! /ith a buc#et0 !lent of sugar0 artificial fla2ours0 dangerous colours and soda$ And of course0 these fa#es !igg bac# on the success of the original$Though =e!si and Co#e ha2e dro!!ed !rices substantiall to ma#e their !roducts the fla2our of the masses0 s!urious !roducts still score because of !oor consumer a/areness$ And fa#e !roduct manufacturers rea! /indfalls because there are barel an in!ut costs0 no safet standards in2ol2ed0 e*cise or ta*es !aid$ :5$ According to Asho# Gu!ta0 General Manager (Jegal)0 &JJ0 technolog had become so so!histicated no/ that re!roducing logos and !ac#aging /ith multi,colour scanning machines /as eas $ &e said &JJ regularl ma#es discreet en?uiries0 and maintains a s stem of chec#s and balances$ &e added that in the e2ent &JJ found a su!!lier !ilfering or selling a !ass,off or bogus !roduct0 &JJ /ould terminate its contract /ith the su!!lier and ma#e it !a for losses incurred$ Those &JJ !roducts that a!!ealed most to counterfeiters /ere 8air and Jo2el 0 in the s#in care segment0 and Clinic =lus Sham!oo$Gu!ta said that the s!eed in tac#ling counterfeits and

!ro2ing the guilt of the offending !art /as of !aramount im!ortance$ Some of &JJ1s !roducts also /arn !otential counterfeiters of !rosecution0 ensuring that counterfeiters are actuall /arned at the start of their dubious acti2ities$ ::$ Com!anies are also tr ing to tac#le the !roblem another /a $ The are going in for u!graded !ac#aging so that manufacturers of counterfeits find it difficult to re!licate their !roducts$ 9abur is one of them that is ma#ing its !ac#aging more so!histicated and ca!ital,intensi2e$ Its Jal 9ant ManAan0 at the !ea# of the !roblem in :MMM0 had about si*,se2en !er cent of its sales eaten into$ %hen 9abur re!laced its Jal 9ant ManAan !lastic blo/ moulded container /ith a !remium four, colour shrin# slee2e !ac#aging /hich had a grain te*ture and /ater bubbles0 the !ac#aging /as difficult to re!licate$ This resulted in a sales gro/th of :4 !er cent in the original !roduct$9abur1s !o!ular Amla &air Oil has been facing an increase in counterfeits for the !ast ear,and,a,half and the com!an is tr ing to /or# a /a out of it$ Though four raids ha2e been conducted in the !ast si* months and the com!an has re!laced its glass bottle /ith a !et bottle0 illegal manufacturing continues$ 9abur finds that a subtle difference in !ac#aging such as a gold foil stam!ing on the label or introducing holograms is not enough for home !roduct consumers0 s!eciall the less educated /ho find it difficult to ma#e out the difference bet/een a genuine and a fa#e$ :4$ Coca Cola too is in the !rocess of e*!loring changes in its !ac#aging$ The are tr ing to create technolog to incor!orate cert

5a)ach "aunched to chec fa e products =RS =ermacel =2t Jtd has come out /ith a full integrated solution to counter brand attac# and du!lication0 ram!ant in the Indian consumer mar#et$ The solution0 christened 13a2ach10 could fight a /ide range of counterfeiting !roblems e*!erienced b manufacturers mainl in the automoti2e0 8MGC and agro chemicals sectors$ 3a2ach offers a combination of both o2ert and co2ert solutions that effecti2el chec#s counterfeiting !roblems0 adding that the losses to due to du!lication of !roducts in India$ In the 8MCG industr alone0 losses due to influ* of fa#e goods are huge$ In south India0 o2er 7+ !er cent of the automobile s!are !arts are du!licates$ 3a2ach uses a combination of the latest 2isual"o!tical technologies such as holograms0 cutting edge !rinting techni?ues and s!ecialised in#s to create customised solutions for each brand$

.ore a(out 5a)ach 6 Industries

The counterfeiting and di2ersion of !roducts !oses a ris# to cor!orate !rofits and re!utations$ As a com!an 1s first line of defence0 the !ac#aging of !roducts that must be con2incing and 2erifiable$ 3a2ach solutions are being im!lemented toda in a 2ariet of industries from !harmaceuticals to consumer !roducts$ A combination of so!histicated technologies im!lemented in 3a2ach,integrated solutions has been a 2er effecti2e tool for most industries$ Abo2e all0 these technologies ha2e gi2en com!anies un!aralleled !o/er in fighting counterfeiters$ 3a2ach has co2ert and o2ert ca!abilities that can be easil 2erified at the !oint of sale or distribution /ithout the need for s!ecial e?ui!ment$ The uni?ue characteristics of 3a2ach solutions !re2ent accurate re!lication or effecti2e co! ing b con2entional techni?ues$ 3a2ach solutions can also be designed to include tam!er e2ident features /hereb an attem!ts of alteration or remo2al are e*!osed$

Pharmaceutica"s =rofessionall ,!roduced counterfeit drugs that bear a strong resemblance to the !ills the mimic are creating a maAor headache for !harmaceutical com!anies$ Josses in re2enues and !otentiall enormous liabilities loom$ In addition0 unauthorised di2ersion in the su!!l chain b distributors0 ins!ired b the !otential of cross,border !rice arbitrage0 are eroding margins and creating additional legal liabilit $ In the !harmaceutical industr 0 counterfeiting !oses additional ris#s that can threaten the health and safet of consumers$ The abilit of combining 3a2ach /ith current !ac#aging formats gi2es !harmaceu, tical com!anies a cost,effecti2e solution for anti,counterfeiting and tam!er,e2ident a!!lications$ 8or e*am!le0 3a2ach solutions can be used on labels0 closures0 blister !ac#s0 and all t !es of !rimar and secondar !ac#aging$ 3a2ach seals 2alidate !harmaceutical !ac#aging0 so that !harmacists can easil 2erif that the are recei2ing authentic drugs through the correct

su!!l chain$

&utomoti)e and .anufacturin*

The !rimar authentication and securit issues faced b the automoti2e and manufacturing industr are counterfeiting and !roduct liabilit $ 9e!ending on the !articular situation0 3a2ach suggests a /ealth of !ossible solutions$3a2ach also /or#s /ith indi2idual customers to de2elo! a custom,tailored solution that res!onds to the re?uirements of the s!ecific a!!lication$

Consumer 7oods %ithin the consumer goods industr 0 3a2ach /or#s !rimaril /ith brand o/ners /ithin the fast mo2ing consumer goods (8MCG) industr $ 3a2ach has a /ide 2ariet of customised solutions that address man of the challenges faced b com!anies /ithin this industr on a dail basis0 such as counterfeiting0 !roduct di2ersion0 unauthorised !roduction and liabilit issues$

La4s 7o)ernin*

8ollo/ing are the la/s under /hich legal action can be ta#en against manufacturers and sellers of fa#e !roductsD :$ Indian =enal Code :-65 4$ 9rugs and Cosmetics Act0 :MC5 7$ =re2ention of 8ood Adulteration Act0 :M+C C$ Consumer =rotection Act0 :M-6 +$ @ureau of Indian Standards Act0 :M-6 and 6$ Trademar#s Act0 :MMM

There are a number of la/s dealing /ith infringement such as the Indian =enal Code :-650 the Trade and Merchandise Mar#s Act :M+-0 the Co! rights Act0 the 9esign Act0 the MRT=0 the 9rugs and Cosmetics Act0 the Common Ja/ and the Ja/ of Torts$ &o/e2er0 certain loo!holes e*ist in la/ /hich is often ad2antageous to and aids the counterfeiter$

Im!lementing agencies face enormous !roblems in issuing /arrants0 arresting the cul!rits0 sei'ing the goods0 storage of sei'ed goods and !resenting the e2idence in court$ The cor!orates subse?uentl ha2e to !resent 2oluminous e2idence in court along /ith data such as in2oices and user data and strong e2idence to out/it the e*tremel intelligent counterfeiter$ The !rocess ta#es too long and is time consuming often leading to destruction of 2ital e2idence$ =unishments are not !uniti2e and sentences are fe/ /ith most of them esca!ing Aail sentences0 /hich are rarel more than three ears$ The counterfeiters close sho! and mo2e on to another location to esca!e the la/ and thus continue counterfeiting$

At a recent national /or#sho! on >=rotecting brands Q a /ar against counterfeiting11 held in He/ 9elhi b the @rand =rotection Committee (@=C) of 8ICCI0 all the sta#eholders Q cor!orates0 Go2ernment0 Audicial luminaries0 la/ ers and !olice officials along /ith re!resentati2es of the consumer ad2ocac grou!s gathered together to e*!ress their concerns and find solutions to combat this !roblem$

The -ecessar0 Le*a" 'att"e

%orld/ide0 one of the most effecti2e /a s b /hich the battle against !irac 0 counterfeit and s!urious !roducts has been fought is through use of legal tools$ There are certain legal !ro2isions that /ould aid the consumer in his fight against this menace$ Consumers /ould ha2e to loo# at the situation and sim!l see /hich of the rele2ant la/s /ould hel! them /ith res!ect to their !roblems$

The Dru*s and Cosmetics &ct8 19:; can be used to defend and !rotect consumers interests$ =ro2isions under this act include !unishments I fines for misbranding drugs0 confiscating of such drugs (sec :C)0 !re2ention of the im!ort of such drugs (sec:5) etc$ It !rohibits the sale of such drugs under section :-$ It also !ro2ides for the setting u! of Central 9rugs Jaborator for testing batches of drugs$ It also !rescribes strict standards that are to be follo/ed b drug manufacturers and im!orters$ It also clearl defines a misbranded drug under section :L$ Section :7 clearl states that /hoe2er contra2enes an !art of this act /ill be !unishable /ith im!risonment /hich ma e*tend to one ear0 or /ith fine /hich ma e*tend to fi2e hundred ru!ees0 or /ith both$ If con2icted again of the same offence then0 in addition he shall be !unishable /ith im!risonment0 /hich ma e*tend to t/o ears0 or /ith fine /hich ma e*tend to one thousand ru!ees0 or /ith both$

Pre)ention of Food &du"teration &ct8 19<: !rohibits the manufacture0 sale0 etc$ of certain food articles$ Among others0 it states that no !erson shall manufacture0 store0 sell or distribute an misbranded food0 adulterated food$ It states that an article of food shall be deemed to be misbranded if it is an imitation of0 or is a substitute for0 or resembles in a manner li#el to decei2e0 another article of food0 and is not cons!icuousl labeled so as to indicate its true character0 if it is falsel stated to be the !roduct of an !lace or countr 0 if it is sold b a name /hich belongs to another article of food0 if it is so colored0 fla2ored0 coated0 !o/dered or !olished as to conceal an damage to the article or to a!!ear of greater 2alue than it reall is0 if false claims are made for it u!on the label or other/ise$ It also !ro2ides for food ins!ectors to ta#e sam!les of an #ind of food !roduct and e*amine it$ =enalties can be im!osed under section :6 for im!ose a sentence of im!risonment for a term /hich shall not be less than three months but /hich ma e*tend to t/o ears0 and /ith fine /hich shall not be less than fi2e hundred ru!ees$ The Trade .ar s &ct8 1999!This Act !ro2ides for registration of trade,mar#s0!re2ention of the use of fraudulent mar#s and =rotection of registered trade,mar#s among others$ The trade mar# Act also allo/s registration to be secured for distinct names0 de2ices0 labels0 /ords0 colours0 sha!es0 sounds that define and distinguish one manufacturer<s goods or ser2ices from another<s in the mar#et$ This hel!s in !re2enting an one else from co! ing or imitating their !roducts$ It !ro2ides for !unishments under section :57 for A!!l ing 8alse Trade Mar#s !unishable /ith im!risonment for a term /hich shall not be less than si* months but /hich ma e*tend to three ears and /ith fine /hich shall not be less than fift thousand ru!ees but /hich ma e*tend to t/o la#h ru!ees$ Under section :5C of the act there is a !enalt for selling goods or !ro2iding ser2ices to /hich false trade mar# or false trade descri!tion is a!!lied$ The !unishment for this is the same as abo2e$ Such counterfeiters can also be !unished b an enhanced =enalt on second or subse?uent con2iction under sec :5+ of the act$

Indian Cop0ri*ht &ct8 19<= In cases of !irac 0 illegal du!lication I counterfeiting of /or#s such as com!uter !rograms0 soft/are0 com!uter databases0 dramatic0 artistic and musical /or#s0 cinematogra!hic films and sound recordings one can al/a s find relief under the co! right act$ The co! right act offers legal !rotection to the original creators of all these !roducts or /or#s$ It !re2ents an one else from re!roducing the !roduct0 distributing the !roduct or selling the !roduct0 at least not /ithout the original creators< !rior !ermission$ Under section :C of this Act0 it is illegal to ma#e or distribute co!ies of co! righted soft/are /ithout !ro!er or s!ecific authori'ation$ A ci2il and criminal action ma be instituted for inAunction0 actual damages (including infringer1s !rofits) or statutor damages !er infringement etc$ Section 67 @0 sti!ulates a minimum Aail term of L da s /hich can be e*tended u! to 7 ears$ The Act further states fines ranging from Rs$ +50555 to 40 550555$

Consumer Protection &ct8 19>? Under the Consumer =rotection Act0 :M-6 one can a!!roach the consumer courts under the heading of Unfair trade =ractices /hich means an unfair or dece!ti2e method"!ractice ado!ted b a seller for the !ur!ose of !romoting the sale0 use or su!!l of an goods or for the !ro2ision of an ser2ice$ Such unfair trade !ractice /ill includeD Ma#ing false or misleading re!resentations that goods"ser2ices are of a !articular standard"?ualit "?uantit "grade0 Re!resenting that goods" ser2ices ha2e characteristics" uses" accessories" s!onsorshi!s etc$ /hich the do not ha2e or gi2ing an guarantee as to !erformance"efficac that is not based on an ade?uate or !ro!er test0 Misleading the !ublic concerning the !rice at /hich !roducts I ser2ices are soldE Ad2ertising the su!!l of goods"ser2ices at bargain !rices0 /hen in fact the are not meant to be offered for sale at such bargain !ricesE Offering of

gifts0 !ri'e /ith the intention of not !ro2iding them as offered or if the !rice of the gift"!ri'e is actuall included full or !artl in the item sold0 non com!liance of !roduct safet standard0 &oarding or destruction of goods$ If an !roduct sold in the mar#et contains a defect a consumer can a!!roach the consumer court for redressal$ 9efect means an fault0 im!erfection or shortcoming in the ?ualit 0 ?uantit 0 !otenc 0 !urit or standard /hich is re?uired to be maintained b or under an la/ for the time being in force or under an contract /hich e*!ress or im!lied or as is claimed b the trader in an manner /hatsoe2er0 in relation to an goods$ The @ureau of Indian Standards notifies the ?ualit standards for 2arious items including consumer goods$ There are also !enalties for those /ho use the SISIT standard mar# /ithout obtaining the re?uisite license$

Food La4s The details of 2arious food la/s in o!eration in India is as underD , 1. Pre)ention of Food &du"teration &ct @.inistr0 of 2ea"thA The Act la s do/n s!ecifications for 2arious food !roducts and is mandator $ The Ministr of &ealth in :MM+ had constituted a Tas# 8orce under the chairmanshi! of Shri E$S$ Ven#ataramaiah0 Chief Rustice of India (retired)$ The Tas# 8orce recommended that there should be em!hasis on good manufacturing !ractices instead of detection of adulteration and !rosecution$ It also e*!ress concern about lac# of laborator e?ui!ments and ?uantified !ersons$ In addition it also suggested that the name of =8A Act be changed to 8ood Safet Act$ $. &*ricu"ture Produce @7radin* B .ar in*A &ct @.inistr0 of Rura" De)e"opmentA This Act is commonl #no/n as AGMAR3 and is 2oluntar $ The Act la s do/n the s!ecifications for 2arious agricultural commodities including some !rocessed foods$ %. La4s (ein* operated (0 'ureau of Indian Standards @'ISA @IS is the largest bod for formulating standards for 2arious food items$ These standards are also 2oluntar $ :. Essentia" Commodities &ct A number of ?ualit control orders ha2e been issued under Essential Commodities Act such as 8=O0 MM=O0 Meat =roduct Order and Vegetable Oils Control Order$ These orders are mandator and !rimaril meant for regulating the h gienic conditions$ The need to be clubbed under one order /hich ma called 8ood =roducts Order$

'. 2armoni3ation of Food La4s The re2ie/ of multi!le la/s is necessar to ha2e a uniform and logical a!!roach for regulating the ?ualit of food$ The follo/ing action is being ta#en b 2arious MinistriesD, 1. The Ministr of Ci2il Su!!lies I Consumer Affairs has brought out a !a!er for consideration of Committee of Secretaries (COS)$ The !a!er recommends that @IS should formulate standards for all food items in the countr $ This /ill be a maAor ste! to/ards harmoni'ation of food la/s and is still under consideration of COS for finali'ation$ $. The Tas# 8orce constituted b the =rime Minister under the chairmanshi! of Shri Hulsi %adia has submitted its re!ort /hich is under the consideration of the Go2ernment$ The Tas# 8orce had ad2ocated !romotion of food safet and ?ualit $ The Tas# 8orce has further made follo/ing suggestionsD,
o

8ood Regulation Authorit (8RA) be set u! to formulate and u!date food standards for domestic and e*!ort mar#et$ 8RA should re!lace the =8A to conform to international standards$ The Tas# 8orce has gi2en ten s!ecific recommendations such as !ro2ision of storage sim!licitor0 sim!lification of sam!ling !rocedure0 sim!lification of !rocedure for nominee0 time limit for !rosecution0 standard methods of anal sis to be !rescribed0 !enalt should graded according to the gra2it of offences and !ro2ision of ade?uate"infrastructure and laboratories$ &armonisation of Indian standard /ith ?ualit norms of Code* and %TO$ The Central Committee of food Standard (CC8S) should be re!laced b 8RA Go2erning @od for e*!editious decisions$

Source D, Ministr of 8ood =rocessing Industries Dru*s La4s At !resent the follo/ing Acts and Rules made thereunder that go2ern the manufacture0 sale0 im!ort0 e*!ort and clinical research of drugs and cosmetics in India$

The 9rugs and Cosmetics Act0 :MC5 The obAect of this Act is to regulate the im!ort0 manufacture0 distribution and sale of drugs$ The =harmac Act0 :MCThe aim of this la/ is to regulate the !rofession of =harmac in India$ The 9rugs and Magic Remedies (ObAectionable Ad2ertisement) Act0 :M+C This Act is meant to control the Ad2ertisements regarding drugs$ It !rohibits the ad2ertising of remedies alleged to !ossess magic ?ualities and to !ro2ide for matters connected there/ith$ The Harcotic 9rugs and =s chotro!ic Substances Act0 :M-+ This is an Act to consolidate and amend the la/ relating to Harcotic 9rugs0 to ma#e stringent !ro2isions for the control and regulation of o!erations relating to Harcotic 9rugs and =s chotro!ic Substances and for matters connected there/ith$ The Medicinal and Toilet =re!arations (E*cise 9uties) Act0 :M+6 The 9rugs (=rices Control) Order :MM+ (under the Essential Commodities Act)

FICCICs initiati)e to fi*ht spurious products#

Recentl the @rand =rotection Committee (@=C) /as instituted under the aus!ices of 8ederation of Indian Chamber of Commerce and Industr (8ICCI)0 /ith the intention of facilitating trademar# !rotection in India and !rotecting the interests of consumer and industr interests against the menace of !ass,off and counterfeit !roducts$ Man com!anies ha2e Aoined together to ta#e u! this battle against the counterfeiters all across the countr $ @=C com!rises of man consumer non, durable com!anies such as &industan Je2er0 Colgate0 =roctor I Gamble0 9abur0 =e!si0 Gla*o Smith3line and man others$ @esides0 automobile and lubricant com!anies such as IOCJ0 &=CJ @=CJ0 Telco0 Castro and @aAaA Auto are also associated /ith it$ More raids and sei'ures are being carried out against countefreit manufacturers in urban as /ell as rural areas @=C<s mission is to /or# co,o!erati2el /ith the Central I State Go2ernment authorities0 industr and trade associations0 indi2idual com!anies and other organi'ations including consumer !rotection grou!s to eliminate counterfeit and !ass,off !roducts$ @=C has four,fold Strateg to counter the menace of counterfeit and !ass,off !roductsD

Ad2ocate more effecti2e enforcement of e*isting Ja/s and Rules$ Measure and !ublici'e negati2e im!act of Counterfeit$ O!en communication channels bet/een sta#eholders to generate a/areness and stimulate action against counterfeit"!ass,off !roducts$ Ta#e action against infringers 2ia Regulator Authorities$

Recent 'PC acti)ities# !! @=C has set in motion the !rocess of setting u! s!ecial

I=R Cells in the =olice in the States of Maharashtra and Madh a =radesh$ It has e2en initiated Common Enforcement Raids and /or#ed /ith enforcement authorities to raid high infringing mar#ets in 9elhi0 Ahmedabad0 @angalore0 Mumbai and Indore$ It creates immense media and industr a/areness on !arallel industr of counterfeits and !ass,off !roducts$ It has made se2eral re!resentations to the Go2ernment$ Re!resentations ha2e also been made to the Ja/ Ministr for changing "amending Trade Mar# Ja/s currentl not in fa2our of genuine @rand<s Manufacturers$ Jatel 0 it has launched a /ebsite to increase a/areness of general !ublic and other o!inion leaders on the counterfeit issues$ In fact The Hational Association of Soft/are and Ser2ices Com!anies (Hasscom) has e2en established a s!ecial Anti,=irac (&otline) , 5::,75: +C:Mat He/ 9elhi and a toll free number , :655 77CC++$ The initiati2es ta#en b Hasscom against !irac ha2e hel!ed in reducing soft/are !irac in India from a high -M !ercent in :MM7 to 65 !ercent during :MMM$Of course a lot more needs to be done if /e are to succeed in this crusade against !irac I counterfeit !roducts$

Summar0 of Report of the 'rand Protection Committee D FICCI

The @rand =rotection Committee (@=C) has been set u! under 8ederation of Indian Chamber of Commerce and Industr (8ICCI) to fight s!urious !roducts 2i'$ counterfeit and !ass,off or loo#,ali#e !roducts in select categories of consumer goods0 including OTC 9rugs (e$g$ &ousehold Medicines)and Cosmetics$ In the nearl t/o ears since @=C has been in e*istence (from August 4555)0 it hasmade substantial !rogress in its !rimar obAecti2e of fighting s!urious !roducts$

&nti!counterfeit .easures and Resu"ts

9uring this !eriod @=C has set in motion the !rocess of setting u! s!ecial I=R Cells in the=olice in t/o states$ @=C has initiated Common Enforcement Actions (Raids etc$) sei'ing o2erRs$ :+ crs$ of counterfeits and !ass,offs in the last ear and a half$ %or#ed /ith EnforcementAuthorities to raid high infringing mar#ets in 9elhi0 Ahmedabad0 @angalore0 Mumbai andIndore$ @ conducting a Hational /or#sho! in 8ebruar 45540 it has created immense mediaand industr a/areness on !arallel industr of counterfeits and !ass off !roducts$ The Hational/or#sho! had acti2e !artici!ation from the consumer acti2ists0 Go2t$ and =olice authoritiesincl$ the Union Ja/ Minister and the Rudiciar $ It has made sustained efforts all through out tohighlight to the Go2t at both state and central le2el the magnitude of the !roblem$ Re!eatedstudies b ORG Marg and ACHeilsen in select categories of consumer goods ha2e gi2enestimates of the e*tent of the !roblem0 /hich has hel!ed /hen ma#ing re!resentations to theGo2t$ The Hielsen stud indicates that turno2er of S!urious !roducts in !ac#aged consumergoods industr is around Rs$ 4655 crores /ith Go2t$ losing re2enues of Rs$M55 crores in e*cisedut 0 sales ta* and octroi$ ORG store audit indicates for e*am!le that there are ::7 loo#,ali#esof 8air I Jo2el Cream 0 CC of Vic#s Va!oRub and 46 of lode* and the turno2er of theses!urious !roducts is bet/een +. to :+. of genuine brands$ The stud also indicated that saleof such s!urious !roducts is as much0 if not more0 in Chemist sho!s as in General or 3,iranastores$ The Hielsen Stud also indicated that -5. of consumer /ho !urchased a !ass,off orloo#,ali#e !roduct felt cheated as the had /anted to !urchase the genuine brand but /eremisled b the similarit of !ac# design and brand name$

Representations to the 7o)t

@=C has made se2eral re!resentations to the Go2t$ A dialogue /ith the Re2enue Secretar has beeninitiated to !ro!ose the need for suitable amendments in the central e*cise Act to curb the menace ofcounterfeits and !ass offs$ Re!resentations ha2e also been made to the Ja/ Ministr forchanging"amending Trade Mar# la/s currentl not in fa2or of manufacturers of genuine @rand1so/ners$ Setting u! of s!ecial I=R =olicing Cells s in the states of Maharashtra and Madh a =radeshhas been initiated$ The 89A0 E*cise0 Sales Ta* and =olice are all being coordinated 2ia the s!ecialcell"nodal agenc to ta#e com!rehensi2e action against the infringers$ Meeting /ith Maharashtra =9AD Sustained efforts from @=C for better enforcement of la/s b regulator authorit ultimatel succeeded in setting u! a regular re2ie/ mechanism$ In a meeting /iththe Industr in the month of Rune 455:0 the 8ood and 9rugs Administration in the state ofMaharashtra0 agreed to set u! a re2ie/ mechanism /hereb @=C and to! 89A officials /ill meet onmonthl basis and e*change information on the s!urious 9rug and Cosmetic !roducts in the mar#ets$@ased on the information from the Industr 0 89A is initiating enforcement action$ This is a 2er !ositi2e de2elo!ment as Maharashtra 89A no/ recogni'es that the issue on S!urious 9rugs andCosmetics is ram!ant and needs to be resol2ed$ 8a#e,busters$comD In A!ril 455:0 @=C , 0 a /ebsite to increasea/areness of general !ublic and other o!inion leaders on the counterfeit issues$ 8a#e,busters$com isan inno2ati2e tool0 /hich brings all the sta#eholders of the anti,counterfeit issues together$ Site!ro2ides im!ortant information on anti,counterfeit cam!aign of the industr coalition and allo/s a!erson to lodge a com!laint on a2ailabilit of counterfeit !roducts in the mar#et$ %ebsite alsodis!la s current !ac#aging of !o!ular brands to hel! consumer #no/ /hether !roduct !urchased is a!ass,off !roduct or counterfeit$ $ Re/ard Scheme launchedD A re/ard scheme has been launched /here an one informing @=C ofs!urious goods1 infringement

acti2ities resulting in a successful raid /ould get a re/ard in /hich theu!!er limit is Rs$+ lacs$ =osters gi2ing detail of this re/ard are being !ut u! at strategic locations/here infringement acti2ities are the highest$ Another email Address has been created for this !ur!ose called

7o)ernment initiati)es The go2ernment has enacted the la/s and it is u! to the !olice and other agencies to ensure that the la/s are im!lemented$ In fact0 it is not the !aucit of the la/s but the ineffecti2e im!lementation of the la/s0 /hich causes the real !roblem$ The /ar against s!urious goods seems to be intensif ing /ith the Go2ernment no/ mooting an inde!endent authorit to initiate action to !rotect consumers from the menace of counterfeit0 fa#e0 s!urious and contraband !roducts$ The setting u! of an inde!endent authorit is a recommendation from the %or#ing Grou! on counterfeit0 fa#e0 s!urious and contraband !roducts set u! b the 9e!artment of Consumer Affairs0 /hich submitted its final re!ort recentl $ The 9e!artment of Consumer Affairs is alread contem!lating the setting u! of a Hational Consumer =rotection Authorit 0 /hich /ould focus on critical areas affecting consumer health and !ro2ision of safe drin#ing /ater0 mil#0 food and drugs0 the re!ort !ointed out$

Anti,counterfeit dri2e hits Maharashtra<s countr side :$ =am!hlets0 noteboo# co2ers distributed in C0555 2illages /arning about ha'ards of fa#es Soni a Tri!athi

4$ =am!hlets0 noteboo# co2ers and notices are being distributed /arning !eo!le about the !re2alence of s!urious !roducts across the 2illages of Maharashtra0 Madh a =radesh and GuAarat$ In an a/areness dri2e0 Rural Relations , a consumer relation organisation , is attem!ting to caution 2illagers regarding counterfeit !roducts a2ailable in the mar#et 7$ More !eo!le are falling !re to counterfeit !roducts in the rural mar#ets e2er da $ SThese !roducts don<t ha2e a 2alid address or an ingredients< list and are not e2en registered0T he sa s$ SThere are o2er :45 du!licate !roducts of =arle,G biscuits0 for instance$ Tooth!astes0 tea0 hair oil and face,creams ha2e their counterfeits too$T =eo!le o!t for ;fa#es< as the come chea!$ Go2ernment tries to inform !eo!le about the ha'ards of these !roducts$ Go2ernment /ant !eo!le to s!end more and !urchase better !roducts$ This dri2e is not to endorse an brand$ The go around introducing themsel2es as ;2illage de2elo!ers< and targetting segments armed /ith !am!hlets in local languages /hich ha2e logos cautioning !eo!le regarding counterfeit !roducts$ One /a the ha2e de2ised of getting through to the !eo!le is their children$ S=eo!le listen to /hat children sa in small 2illages$ Go2ernment /ill educate secondar school students b distributing among them noteboo# co2ers /ith information on them$ The dri2e /as #ic#ed off si* months ago in o2er C55 2illages across Maharashtra0 Madh a =radesh and GuAarat and !lan to e*tend the dri2e in as man 2illages$ It has chal#ed out C0555 2illages in Maharashtra /ith a !o!ulation bet/een 40555 and :50555 and also /anted to co2er a 2illage /ith around 7+5 families$

C$ Recentl the @rand =rotection Committee (@=C) /as instituted under the aus!ices of 8ederation of Indian Chamber of Commerce and Industr (8ICCI)0 /ith the intention of facilitating trademar# !rotection in India and !rotecting the interests of consumer and industr interests against the menace

of !ass,off and counterfeit !roducts$ Man com!anies ha2e Aoined together to ta#e u! this battle against the counterfeiters all across the countr $ The fight against s!urious !roducts0 counterfeit and !ass,off"loo#,ali#e !roducts in man categories of 8ast Mo2ing Consumer Goods (8MCG)0 9rugs0 Te*tile0 and Automobiles I Jubricants$ @=C com!rises of man consumer non,durable com!anies such as &industan Je2er0 Colgate0 =roctor I Gamble0 Marico0 9abur0 =e!si0 Gla*o Smith3line and man others$ @esides0 automobile and lubricant com!anies such as IOCJ0 &=CJ @=CJ0 Telco0 Castro and @aAaA Auto are also associated /ith it$ More raids and sei'ures are being carried out against countefreit manufacturers in urban as /ell as rural areas @=C<s mission is to /or# co,o!erati2el /ith the Central I State Go2ernment authorities0 industr and trade associations0 indi2idual com!anies and other organi'ations including consumer !rotection grou!s to eliminate counterfeit and !ass,off !roducts$

'PC has four!fo"d Strate*0 to counter the menace of counterfeit and pass!off products#

:$

Ad2ocate more effecti2e enforcement of e*isting Ja/s and Rules$ Measure and !ublici'e negati2e im!act of Counterfeit$ O!en communication channels bet/een sta#eholders to generate a/areness and stimulate action against counterfeit"!ass,off !roducts$ Ta#e action against infringers 2ia Regulator Authorities$

4$ 7$

C$

Dup"ication is more in choc"ate (rands

The rural consumers b loo#ing into the ads of leading chocolate com!anies un#no/ingl !urchase the fa#e chocolate brands because of their im!ulses$

&ence0 the researcher has conducted a sur2e in the !ett sho!s in rural areas to find out the fa#e chocolates a2ailable$ It has been found out that fa#e chocolates and toffees are a2ailable in more number of !ett sho!s for the leading brands$

+hat strate*ies choc"ate companies can adopt to i"" fa e (rands Product# %ithout com!romising on ?ualit 0 the leading chocolate com!anies can reduce their si'e to match the rural demand$ Pricin*# As the rural consumers are bothered about econom !ricing the leading chocolate com!anies can follo/ the strateg of >!enetration !ricing> Promotion# The traditional method of !romotions has to be changed b the MHCs and Hational Com!anies in attac#ing the fa#e !roducts$ A !ortion of the ad budget can be allocated for retailers1 margin$ Through ad cam!aigns0 the com!anies can also create a/areness among consumers regarding the e2ils of fa#e !roducts$ Ph0sica" Distri(ution# Sales !rofessionals of the local region /ho ha2e familiarit in the local (regional) language can be a!!ointed to loo# after the sales of rural areas0 so that the can easil con2erse /ith the retailers and can build good/ill$

Spurious dru*s spoi"s india

The /ides!read manufacture and sale of s!urious drugs in India !laces e2er member of the general !ublic at serious ris# to their life$ According to se2eral re!orts0 out of the a!!ro*imatel Rs:M0555 crores /orth of business annuall in

the !harmaceutical sector in India0 a!!ro*imatel RsC0555 crores is on account of s!urious drugs alone$ Sub,strength s!urious drugs such as anti,malarial drugs not onl fail to cure but o2er time0 create resistance in the malarial !arasite /ith disastrous conse?uences for the !atient$ Sub,strength s!urious drugs such as anti,malarial drugs not onl fail to cure but o2er time0 create resistance in the malarial !arasite /ith disastrous conse?uences for the !atient$ E2en /hen spurious dru*s do not endanger life0 the can lea2e the !atient seriousl ill and those /ith inade?uate !otenc do bigger harm to the societ in general$ 9rug resistance de2elo!s /hen !atients consume drugs /ith inade?uate !otenc forcing them to loo# for costlier ne/ generation drugs$ And these !atients could !ut the entire societ at ris# b s!reading drug resistance$ Unli#e other cases /here the consumer #no/s his intent0 the s!urious drug industr thri2es on consumers1 ignorance0 lac# of stiff !enalt for indulging in such acti2it and finall on la* regulator s stem$ =ac#aging is so nearl !erfect that distinguishing a s!urious drug from a genuine one is almost im!ossible as the fa#e ma#ers are in2esting nearl 45 !ercent of the total in2estment in !ac#aging$(a recent finding)$ The conse?uences are not restricted to consumers or the !atients alone$ %ith a mar et share of near"0 $; per cent of the tota" dru* mar et in India. The s!urious drug industr 1s thirst for more is clear to see$ It has alread set its e e on the e*!ort mar#et and succeeded in ta#ing s!urious drugs be ond our shores$ Man are sent o2erseas0 too es!eciall to the states of the erst/hile So2iet Union$ Se2eral !eo!le ha2e been arrested /hile tr ing to smuggle out s!urious drugs in bul# to these countries$ Africa and Jatin America ha2e ta#en cogni'ance of the increased e*!ort of s!urious"sub,standard drugs from India and ha2e started com!laining about it$ And /orse0 nearl 7,+ !er cent of the drugs landing in the U$S$ are s!urious$ The U$S$ has alread !ut India in the 75: /atch list threat some months ago$ If im!lemented it /ould totall ban

e*!ort of drugs from India and sound the death #nell for the Indian drug industr $ =unAab0 &ar ana0 &imachal =radesh0 9elhi0 Uttar =radesh0 @ihar0 GuArat and to some e*tent Madh a =radesh ha2e the bul# of s!urious drug manufacturing units$ In U=0 the maAor sale of s!urious drugs is in Agra0 Juc#no/ and Varanasi$The Indian !harma industr 0 including those manufacturing fa#es and s!urious drugs0 is gro/ing at the rate of about 45 !er cent annuall 0 /hich means that e2er ear the chances of our bu ing a medicine that can do more harm than good (as some e2en contain to*ic material) are also rising !ro!ortionatel $ &ccordin* to an industr0 estimate8 1< percent of the dru*s and pharmaceutica"s so"d in India are either spurious or su(standard and the !ercentage is onl gro/ing /ith no effecti2e chec# on this illegal acti2it $ Increasing !ressure of a !o/erful industr lobb on the go2ernment to allo/ certain drugs and cough !re!arations as OTC and the go2ernment1s mo2e to classif a set of a ur2edic !re!arations as food su!!lements ma add a ne/ dimension to the !roblem of s!urious and substandard drugs in future$ @ !ermitting drugs for minor ailments as OTC and allo/ing them to be sold b stores other than medical sho!s0 monitoring of their safet and efficac /ill be almost im!ossible for state drug authorities Aust because of the huge number of such stores in each state In India0 drug !irating is made !ossible b the e*isted !atents regime$ These la/s offered !rotection onl for manufacturing !rocesses and not for the !roducts themsel2es$ @esides0 !rotection for !rocess /as also a2ailable for a !eriod of se2en ears0 unli#e in the %est0 /here !atent !rotection is for a !eriod of 45 ears$ As a result0 under e*isting Indian !atent la/s0 Indian drug com!anies /ere /ell /ithin their rights to re2erse,engineer /ell,#no/n brands and sell them as their creation$ Significantl 0 drug !irac of this #ind is reduced from 455+0 /hen India and man other de2elo!ing countries e*tended !rocess !atents to !roducts too under the %orld Trade Organi'ation$ In 2ie/ of this de2elo!ment0 some Indian drug

com!anies are alread mo2ing a/a from the manufacture of generics to the de2elo!ment of ne/ drugs through research and de2elo!ment$ SUnfortunatel a 2er big mar#et of s!urious drugs is flourishing in our countr $ Guilt !eo!le /ho !la /ith the li2es of millions are rarel brought to boo#s$ It is unfortunate that no action is ta#en against them$$$$TThe !enalties and !ro2isions e*isting under the 9rugs and Cosmetics Act0 :MC5 are ineffecti2e$ One of the reasons for the e*isting !enalties not being effecti2e is that the manufacture and sale of s!urious drugs is !rimaril a clandestine acti2it 0 /hich is sho/ing increasing in2ol2ement of organi'ed crime in recent ears$ @esides0 offenders are able to easil obtain bail0 as the offences are non,cogni'able and bailable under the e*isting !ro2isions of the Act$ The offenders remain on bail due to dela in dis!osal of cases for manufacture and sale of adulterated and s!urious drugs

'asic Precautions or action to (e ta en (0 consumers

The /hole e*ercise of !rotecting brands /ould remain futile unless the consumer is #e!t in mind$ Cor!orates s!end huge sums on ad2ertising and !rotecting brands /ithout a thought for consumers /ho b choice ha2e brand lo alt $ There is no doubt that the consumers also need to be cautious /hen bu ing !roducts$ Counterfeiting of !roducts is ram!ant and com!anies must change their !olic to include redressal mechanisms for unsus!ecting consumers /ho ha2e been cheated$ Consumers ha2e to come together and reali'e that some !rudence and caution on their !art can long /a in countering this menace$ Some basic and sim!le measures that can be ado!ted b consumers all across the countr are ,

:$

Ma#e sure ou bu all our !roducts from a re!uted sho! or establishment$ Tr to sto! eating foods from roadside 2endors0 as man of them do not follo/ safet and h giene standards /hile !re!aring their food$ Al/a s chec# the labels of all !roducts thoroughl $ You should be on the loo# out for badl !rinted labels0 absence of the label itself or lac# of details of the medicine0 fault sealing and differences in the colour of the !ac#ing$ %hile bu ing medicines ou0 the consumer should al/a s loo# for the batch number0 manufacturing date0 e*!ir date0 manufacturing license number0 manufacturer1s name"address etc on the !ac#$

4$

7$

C$

+$

%ith res!ect to cosmetics0 s#in and beaut !roducts it is necessar loo# out for an e*traneous matter in li?uid !re!arations0 lum!s in creams or ointments and as al/a s0 chec# the labels and read the list of ingredients carefull $

6$

L$

-$

M$

:5$

Al/a s insist on as#ing for a bill " recei!t or cash memo for all !roducts that ou ma !urchase$ This /ill be es!eciall useful if I /hen ou need to sho/ !roof of our !urchase$ You must al/a s destro em!t !ac#s0 bottles and containers of used or lefto2er medicines to a2oid rec cling or refilling$ Ma#e a com!laint or re!ort to the com!an if it is sus!ected that original !roduct is being du!licated or imitated$ It is im!ortant to tr and ensure that com!an /ill lodge com!laints either /ith the local !olice or the necessar authorities in the state$ If ou are a/are of an !articular mar#0 logo or hologram the !roduct is su!!osed to ha2e0 !lease ensure it is !resent before ou bu the !roduct It also im!ortant for original manufacturers to ma#e sure that the label loo#s distinct and consistent so that consumers can tell the difference bet/een a genuine and a fa#e one$

.ain states in India 4hich has ma/or mar et for spurious products

Pun/a( a ma/or mar et for spurious products#

After 9elhi0 =unAab has emerged as a maAor mar#et of s!urious and du!licate !roducts in Horth India$ The branded com!anies are concerned that consum!tion and !roduction of 2arious du!licate and fa#e !roducts in the state$ %hich include 8MCG !roducts0 medicines0 auto,!arts0 com!uter soft/are0 !esticide and seeds0 ha2e alread crossed o2er Rs :555 crore annuall in the state$ Precautions The com!anies are no/ hiring the consultanc firms to trac# do/n the mar#ets0 /hich are !roducing and selling their s!urious !roducts$ Amritsar0 Mandi Gobindgarh and e2en Chandigarh are on the radar of these com!anies0 A!art from conducting raids on retailers0 the consultant firms ha2e come /ith ne/ technologies to the !rotect the brands besides offering consumer a/areness !rogrammes as a solution to chec# the menaces$ A large number of small scale units ha2e come u! in =unAab /hich ha2e mastered the art of ma#ing 1almost1 same !roducts that are being manufactured b big brands in the !harma0 auto !arts0 te*tile0 seeds and other sectors$ In fact0 the com!anies are losing :5 to C5 !er cent of their mar#et due to the sales of s!urious and du!licate !roducts$ At the national le2el the com!anies are losing business 2olume Uannuall 0 /hich include !harmaceutical0 auto,!arts0 soft/are0 music0agro,chemicals0 li?uor and soft drin#s$ A team of Tisco raided the !remises of a firm in Mandi Gobindgarh0 /hich /as selling steel under the name of the com!an after !rocessing im!orted scra! from %orld Trade Centre$ Some other com!anies ha2e also hired agencies to raid the firms in Judhiana0 Amritsar and Ralandhar that /ere manufacturing s!urious auto,!arts0 s!orts goods0 soft/are and other items$ The officials of the @IS also admitted that due to length and cumbersome Audicial !rocess to !unish the guilt 0

the MHCs and Indian @rands /ere finding it almost im!ossible to chec# the du!lication of their !roducts$

+ar on counterfeit and spurious products !The facts

The Indian econom has undergone a number changes in the last decade due to liberalisation and globalisation$ A!art from the !ositi2e effects of increased goods and ser2ices a2ailable to consumers0 the negati2e effects of counterfeiting0 adulteration and manufacture of s!urious goods has become an increasingl dangerous menace to consumer choice0 health and the econom $ Though this !roblem has al/a s e*isted0 no/ more than e2er0 counterfeit and s!urious !roducts ha2e in2aded e2er as!ect of our li2es$ 8rom !roducts such as radios0 ge sers0 com!uter soft/ares I !hones to food items0 be2erages0 cosmetics and medicines0 all ha2e been illegall du!licated0 co!ied and counterfeited$ 9ue to a lac# of consumer a/areness0 /ea# enforcement of e*isting la/s and ra!id inno2ations in technolog 0 the !roduction and distribution of fa#e and counterfeit !roducts has become so /ides!read that0 toda no consumer can be sure of the authenticit of the !roduct he or she he has !urchased$ Toda man consumers are du!ed into belie2ing that the !roducts the are bu ing are genuine /hen in realit the are actuall fa#e$ Such s!urious !roducts ha2e greatl ham!ered the gro/th of consumer goods industr and negati2el im!acted consumer good/ill$

It is clear that Counterfeit and !ass off !roducts infringe at least t/o of the consumer<s rights0 name"0# ! Ri*ht to (e Informed ,Means right to be informed about the ?ualit 0 ?uantit 0 !otenc 0 !urit 0 standard and !rice of goods so as to !rotect the consumer against unfair trade !ractices$

Ri*ht to Safet0 , Means right to be !rotected against the mar#eting of goods and ser2ices0 /hich are ha'ardous to life and !ro!ert $ The !urchased goods and ser2ices a2ailed of should not onl meet their immediate needs0 but also fulfil long term interests$

Since the pro("ems of (rand protection are practica" as 4e"" as "e*a"8 an anti!pirac0 strate*0 in)o")es the fo""o4in* four pron* actionE

:$ Jabelling Jable the !roducts clearl 0 distincti2el and consistentl to ensure that consumers can tell the difference bet/een a genuine and a fa#e0 or if need be0 to ensure that a court can tell the difference$ 4$ Identification A range of means can be em!lo ed to monitor and trac# the sale of goods that infringe the brand,related rights$ These includeD

engaging !ri2ate in?uir agents to collect e2idence through sur2eillance and tra! !urchasesE monitoring high,ris# outlets and !romotional channels that counterfeiters fre?uentl use to ad2ertise and sell their goods (such as mar#ets0 discount stores0 classified and trade !a!ers)E and focusing on identif ing the manufacturers and su!!liers of counterfeit goods$ &o/e2er0 be a/are that !ri2ac and sur2eillance legislation regulates the gathering and use of some t !es of e2idence$

Enforcement

Once the counterfeiters are identified0 the affected com!an ma /ant to ta#e legal action against them$ Using the legal remedies a2ailable this can ta#e a 2ariet of forms0 from issuing /arning letters0 to commencing ci2il !roceedings or criminal action through to a 2ariet of o!tions in bet/een$ It is also im!ortant for the industr to liasion regularl /ith state and a range of other in2estigati2e and enforcement bodies$ @order !rotection Since man !irated goods are im!orted from !laces /here manufacturing costs are chea!er0 these enable Customs officers to sei'e !roducts0 at the !oint of entr 0 that infringe ones co! right or trade mar#s$ @ briefing Customs on genuine and unauthorised !roducts0 and regularl u!dating Customs on rele2ant information0 the !ros!ects of a successful sei'ure are significantl enhanced$ The o!ening u! of the Indian econom cou!led /ith gro/ing com!etition and indeed gro/ing consumer a/areness0 /ould collecti2el hel! to chec# the dangers of counterfeiting0 s!urious and !irated !roducts etc$ &o/e2er0 to combat the dangers of the !irac or counterfeiting of !roducts etc0 /e ha2e to learn much more from the e*!eriences and technological de2elo!ments of others in this field$ I0 therefore0 /elcome the in2ol2ement of US Chambers of Commerce for toda 1s interacti2e meeting on this im!ortant subAect /here /e ma ha2e to learn man things from each other$

I am glad that associations of trade and Industr such as CII0 8ICCI0 ASSOC&AM etc$ come for/ard on a !latform to chec# the gro/ing menace of !irac and counterfeiting and started to !la a lead role on an ongoing basis to ensure that the interests of consumers are !rotected and onl safe and genuiue !roducts find their /a into the mar#et$

You /ould be interested to learn0 that /ith a 2ie/ to !romote and !rotect the interests of consumers0 the 9e!artment of Consumer Affairs has set u! Si* %or#ing Grou!s to loo# in to different areas of consumer /elfare$ Of the si* grou!s0 one Grou! is s!ecificall for Counterfeit0 8a#e0 S!urious0 and Contraband =roducts$ The other fi2e grou!s are on (:) 8ood Safet E (4) Misleading Ad2ertisements (7) 9rugs0 =harmaceuticals and Medical 9e2ices D (C) Consumer &ealth I Safet concerning Tobacco =roducts and D (+) a Grou! to formulate the He/ Acts or amend the e*isting Act relating to Consumer Interest$ The %or#ing Grou! on Counterfeit0 8a#e S!urious and Contraband !roducts com!rises not onl of the re!resentati2es of 2arious sta#eholder ministries0 but also re!resentati2es of CII0 ASSOC&AM0 8ICCI and !rominent HGO1s$ The terms of reference of this grou! is to identif the !roblems that the Consumers face in relation to such =roducts0 both indigenous and im!orted0 a2ailable in the mar#etE and0 to suggest !re2enti2e as /ell as remedial measures to curb the im!ort as /ell as manufacture and sale of counterfeit0 fa#e0 s!urious and contraband !roducts in the countr $ The recommendations of these %or#ing Grou!s are e*!ected to hel! focus on !articular areas$ I ho!e the outcome of this >Interacti2e Meeting on Issues of =irac and @rand =rotection in e*!anding India US business =otential>0 organi'ed b 8ICCI /ill also hel! to !ro2ide useful in!uts for the %or#ing Grou!s set u! b Ministr $ 9r$ Chandra M$ Gulhati0 =roduction and sale of fa#e drugs is essentiall a criminal act$ =roduction and sale of substandard drugs can be deliberate or due to negligence$

 8ault can also lie /ith distributors and retailers /ith regard to storage of tem!erature sensiti2e items that can render standard into substandard !roducts e$g$ Insulin$ Fa e Dru*s in India# E2er no/ and then the mass media both in India and abroad carries stories on manufacture and sale of huge number of fa#e drugs in India$ 8igures ?uoted range from 45 to 4+. Im!licationD E2er +th0 if not Cth medicine being sold in o2er 6550555 retail chemist sho!s is fa#e$ @ased on this assum!tion0 the total fa#e mar#et business should be at least Rs$ 60+55 crores e2er earO End"ess Repetition of Unre"ia("e Data# SOne /idel ?uoted %&O statistic !laces India as the leader0 /ith as much as 7+. of /orld<s !roduction (of fa#e drugs)TD ne/s item in the Jancet0 4 Rune 455:$ As !art of the Se2idenceT the case of narcotic analgesics being smuggled b U'be# carriers but sei'ed at He/ 9elhi air!ort /as ?uoted$ The factD the narcotic analgesics /ere illegall !roduced for smuggling but /ere HOT 8A3E$ 9es!ite re!eated denials b %&O0 this misinformation continues to be re!eated b the media e2en toda $ Confusion due to Different Definitions# In India0 the descri!tions fa#e0 s!urious and counterfeit con2e the same meaning$ &o/e2er as !er %&O definition counterfeit drugs are those that ha2e Sbeen deliberatel and fraudulentl mislabelled /ith res!ect to identit and"or source$T

 9es!ite such a /ide definition bet/een 4554 and 455C0 not a single case of counterfeit case /as re!orted to %&O$ In America counterfeit drugs include genuine0 foreign medicines"brands not a!!ro2ed b the United States Food and Dru* &dministration @USFD&A. Ho /onder according to US89A0 SU! to 4+. of all drugs consumed in !oor countries are thought to be counterfeit or substandard$T (RefD The Jancet0 Vol$ 7640 44 Ho2ember 4557)$ %&O S8act SheetT %ithout 9ata0 %ithout =roofD SThere has been no full international sur2e but estimates from %&O and the !harmaceutical industr suggest that at least +. of medicines in circulation (/orld/ide) ma be counterfeitT (RefD The Jancet0 + October 4554) SCounterfeiting in =eru is as high as -5. according to Merc#0 Shar!0 and 9ohme$T &o/ come e2er one is ali2eO SIn 45540 India<s !harmaceutical com!anies suggested that in India<s maAor cities0 one in fi2e medicines sold /as a fa#e$ The claimed a loss in re2enue of bet/een C. and +. annuall $ The industr also estimated that illegal drugs had gro/n from :5. to 45. of the total mar#et$T RefD %&O 8act Sheet re2ised0 :C Ho2ember 4556$

Fi*ures DonCt Ta""0# If fa#e drugs are so much in abundance in India0 then /h does the industr claim that their Sloss of re2enueT is bet/een C and +.P It should be more li#e 45. or e2en more$ It can be less OHJY if fa#e drugs fall o2er/helmingl in the chea!er range$

 @ut /h chea! fa#e drugs should be manufactured and sold since the !rofits are not be /orth the trouble and ris#$ Let us "oo at an i""ustration# Paracetamo" )Ds Ceftria,one @ul# !aracetamol costs Rs$ :-5 !er #g (:555g)$ Cost of acti2e ingredient in one dose comes to Aust M !aise$ The !roduction cost of a stri! of :5 tablets (/ithout acti2e ingredient) comes to Rs$ :$+5$ Thus !roduction cost is higher than cost of medicine$ Sale !rice 2aries from Rs$ C to :5 !er stri!$ @ul# ceftria*one costs o2er Rs$ ::0555 !er #g$ Cost of acti2e ingredient in one dose (:g) 2ial comes to Rs$ ::$45$ The !roduction cost /ithout acti2e ingredient is Rs$ C$C5$ Sale !rice is o2er Rs$ L5 %ill fa#e drug ma#er !roduce !aracetamol or ceftria*oneP =rofits lie in e*!ensi2e !roducts /ith large mar#et$ India# Fa e )Ds Spurious Dru*s# In India0 8a#e is a commonl used /ord that means SHot Genuine$T This /ord is not s!ecificall mentioned in our la/s go2erning medicines$ SS!uriousT0 as defined in the 9rugs and Cosmetics Act (Section :L@) is not limited to fa#e !roducts but also includes other cases such as !roducts that use unauthori'ed names0 manufacturers etc$ Im!licationD A stri! of :5 !ure and genuine !aracetamol tablets /ill be deemed to be Ss!uriousT if it uses the name Crocin /ithout !ermission from trade mar# holder GS3$ In man raids /here the aggrie2ed informer is a manufacturer of the original !roduct0 !rimaril and at least

initiall the issue relates to unauthori'ed use of brand names$ Thus manufacturers use the legal definition to their commercial benefit e2en /hen !ublic health ma or ma not be at sta#e$ &o/ man of the Ss!uriousT !roducts /ere found to be fa#e as /ellP Is the definition e*aggerating the figures of reall fa#e drugsP Should the definition of S!urious drugs be amendedP

Stran*e Si"ence on Fa e 'rands Jarge drug industr associations (I9MA0 O==I) !ro2ide estimated !ercentage figures of fa#e drugs$ Methodolog and conclusions are neither listed nor su!!orted /ith e2idence$ Concrete e*am!les are often not gi2en$ %h should the drug com!anies sh a/a from gi2ing s!ecific detailsP Recentl du!licate co!ies of a !o!ular and 2er /idel used cough remed flooded certain mar ets in eastern India The com!an found that its !roduct<s sale /as either stable or going u! all o2er the countr e*ce!t certain mar#ets in eastern India$ The Com!an too# action /ith local !olice hel! but did not in2ol2e drug controller$ The reasonP Media co2erage of the e*istence of du!licate !roducts /ould ha2e led to bo cott of the brand b !atients and doctors all o2er IndiaO

Conc"usion# Ur*ent -eed of Credi("e8 Correct Data# Currentl fa#e drugs are disco2ered through random sam!le collections b state drug ins!ectors$ On recei!t of com!laints b aggrie2ed manufacturers$ Rarel b !atients$ These are inade?uate measures to determine the correct !re2alence of the !roblem$ Hational le2el scientificall structured large sam!le collection and testing is urgentl re?uired$ C9SCO has !robabl alread started the !rocess$