Today, the European Observatory on Infringements of Intellectual Property Rights (Observatory) under the European Union Intellectual Property Office (EUIPO) released the eighth installment of its sectorial reports on the economic cost of intellectual property rights (IPR) infringement. In line with its mandate, the Observatory is continuing to evaluate the negative impact of counterfeiting and piracy on legitimate businesses, governments, and consumers, and ultimately on society as a whole. Results of this study, to be followed by some other sectorial studies, pave the way toward quantification of the scope, scale and impact of IPR infringements in the European Union. While previous reports have illustrated the economic costs of infringement in the cosmetics and personal care sector, the clothing, footwear, and accessories sector, and the toys and games sector (among others), this report covers the economic cost of IPR infringement in the spirits and wine sector.
According to the report, 4.4% of legitimate sales of spirits and 2.3% of wine sales are lost each year as a result of alcohol counterfeiting. These lost sales result in the loss of 4,800 jobs in the wine and spirit sectors annually, since legal alcohol manufacturers hire fewer workers as a result of the loss of revenue from counterfeited goods. However, the consequences of counterfeiting do not end here; rather, counterfeiting has a ripple effect on the entire market, which results in the loss of another 18,500 jobs in the EU economy, of which 8,600 are in the agricultural sector and 1,300 in the food industry. It is also estimated that in the EU-28, these counterfeit products have generated losses of €1.2 billion in tax revenues in terms of taxes on household income, contributions to social security, taxes on corporate income, value-added tax (VAT), and excise duties.
Unsurprisingly, the countries that suffer the majority of these costs include Spain, Italy, France, Germany, and the United Kingdom; annually, these countries lose an estimated €263 million, €162 million, €136 million, €140 million, and €87 million, respectively.
In future reports, EU Observatory will study the effects of counterfeiting on additional sectors, such as pharmaceuticals, computers, auto parts, and other industries that are considered to be prone to IPR infringement.
For more information on anticounterfeiting activities in the EU or internationally, please contact INTA Anticounterfeiting Manager Maysa Razavi at email@example.com.