EUR 83 billion and 790 000 jobs lost every year across the EU due to counterfeiting and piracy

• 7.4 % of sales in nine sectors are lost due to the presence of fakes in the market. 

• Clothes, toys, sports goods, jewellery, handbags and music among the sectors affected. 

• Government revenue lost as a result of counterfeiting and piracy estimated at EUR 14.3 billion. 

With the festive season approaching, millions of shoppers across the EU-28 are buying Christmas presents for family and friends. But the negative economic effect of counterfeit and pirated goods lasts all year round. 

A series of studies carried out by the European Union Intellectual Property Office (EUIPO) through the  European Observatory on Infringements of Intellectual Property Rights, estimates that over EUR 48 billion — or 7.4 % of all sales — is lost every year in nine sectors, due to the presence of fake goods in the marketplace. Every year, an additional EUR 35 billion is also lost across the EU economy due to the indirect effects of counterfeiting and piracy in these sectors, as manufacturers buy fewer goods and services from suppliers, causing knock-on effects in other areas. 

The nine affected sectors are: cosmetics and personal care; clothing, footwear and accessories; sports goods; toys and games; jewellery and watches; handbags; recorded music; spirits and wine; and pharmaceuticals. 

Those lost sales translate into close to 500,000 jobs directly lost or not created across these sectors in the EU, as legitimate manufacturers and in some case distributors of corresponding products employ fewer people than they would have done in the absence of counterfeiting and piracy. When the knock-on effect of counterfeits on other sectors is taken into account, an additional 290,000 jobs are lost elsewhere in the EU economy. 

The studies were carried out between March 2015 and September 2016 by the EUIPO, to build up a fuller picture of the economic cost of counterfeiting and piracy in the EU. The study series also tracks the effect of fakes on public finances. In total, the yearly loss of government revenue arising from counterfeiting and piracy in these nine sectors is estimated at EUR 14.3 billion, in terms of lost income tax, VAT and excise duties. 

it is estimated that over € 7.5 billion, is lost annually to the United Kingdom as a result of counterfeiting, with over 5.4 billion euros being directly lost in the sectors identified within the study. This amounts  to almost 7% of their sales. In effect, this means that 80,500 jobs have been lost and places the UK as the 4^th country most affected EU country due to counterfeiting. Moreover, the UK is the 5^th most affected EU country, overall, in terms of lost sales in all business sectors.  

As a result of piracy, UK’s music industry is the EU’s most affected business sector within the EU. This is due to the comparative size of the UK’s music market and the overall size of the digital market. In second place in terms of lost sales is the games industry. With  the UK’s  clothing and footwear sector ranked as the 3^rd most affected sector across the whole of the EU due to counterfeiting. 

The Executive Director of the EUIPO, António Campinos said: 

We hope that the results of our study series will help consumers make more informed choices. This is all the more important at this time of the year, when consumers and citizens are doing their Christmas shopping and choosing gifts for their dear ones. Through our reporting and analysis, we can see the economic effects that counterfeiting and piracy have on sales and jobs. The situation varies from Member State to Member State, but the overall picture from our study series is very clear — counterfeiting and piracy have a negative effect on the EU economy and on job creation. 

The study series will continue throughout 2017, with reports on the economic effects of counterfeiting and piracy in the smartphone and pesticide sectors, as well as in other economic sectors thought to be vulnerable to intellectual property rights infringements. 

LINKS TO STUDIES: The Quantification of Infringement series of studies carried out by the EUIPO through the European Observatory of Intellectual Property Rights previously looked at: the pharmaceutical sector, the spirits and wine sector; the recorded music sector; the watches and jewellery sector; the handbag and luggage sector; the toys and games sector; the sports goods sector; the clothes, shoes and accessories sector; and the cosmetics and personal care sector.

ABOUT THE EUIPO: The EUIPO is a decentralised agency of the EU, based in Alicante, Spain. It manages the registration of the European Union trade mark (EUTM) and the registered Community design (RCD), both of which provide intellectual property protection in all 28 EU Member States, as well as carrying out cooperation activities with the national and regional IP offices of the EU. Up until 23 March 2016, the EUIPO was known as the Office for Harmonization in the Internal Market (OHIM). 

The European Observatory on Infringements of Intellectual Property Rights was established in 2009 to support the protection and enforcement of intellectual property rights and help combat the growing threat of IP infringements in Europe. It was transferred to the EUIPO on June 5 by Regulation (EU) No 386/2012 of the European Parliament and of the Council.