Financial Daily from THE HINDU group of publications
Tuesday, Dec 03, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 03, 2002 |
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Industry & Economy
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Personal Products Counterfeits costing FMCG cos dear Our Bureau
MUMBAI, Dec. 2 INDIAN industry loses about Rs 4,000 crore per annum due to competition from counterfeit products or look-alikes. Mr Bharat Patel, Chairman, Procter & Gamble Hygiene and Health Care, speaking at the FICCI Ladies Organisation (FLO) organised `Counterfeit Products: Customers Beware' today, said it was earlier noticed that Vicks Action 500 sales had been flagging due to the number of look-alike and counterfeit products flooding the market. He added that popular brands were losing 10-30 per cent of business because of low-quality, spurious products that rode on the coat-tails of successful brands. According to an AC Nielsen study on the fast moving consumer goods (FMCG) market, the Government loses Rs 900 crore as revenue annually and FMCG firms about Rs 2,000 crore. He estimated that about 1.15 lakh retailers carry Vicks look-alikes. Mr Patel said that in the long run spurious products in all industry categories would affect the development of the Indian market, harm its move towards globalisation, lead to increased taxes and prices and negatively impact consumer spending. He added that regulatory bodies had to take serious action to stem the malaise. To this effect, the FICCI-Brand Protection Committee, which consists of senior officers of P&G, Hindustan Lever, Colgate, SmithKline Beecham, Coca-Cola, PepsiCo, Gillette, Britannia and organisations such as the CERC, that aims to check the proliferation of spurious, pass-off products, is adopting a four-point strategy — focus on enforcement and implementation of laws; measure and publicise the negative impact of such products; initiate legal action against the manufacturers and traders; and, communicate findings and up-to-date information among stakeholders. The problem is wide-spread and prevalent in almost every industry. These spurious products not only harm consumers, but also substantially diminish a product's brand equity, eat into company earnings, and deny the exchequer a greater share of revenue because the manufacturers avoid paying excise duty, sales and income tax. Mr Dilip G. Shah, Director-General, Indian Pharma Alliance, said that such measures as improving the Drug Control Administration; establishing an intelligence and legal cell under State Drugs Control Administration; strengthening testing facilities at the State level; speedy analysis of the product; and training of drug control officers was the need of the hour. He said these would discourage the registration of look-alikes by licensing authorities; and, harmonise specific sections of the Drugs and Cosmetics Act 1940. Suppliers of the genuine product also create many of these spurious products. The `side-business' is considered extremely lucrative and is well-organised. There are 128 `versions' of Parachute Hair Oil, 113 of Fair and Lovely, 44 of Vicks VapoRub, and 38 of Clinic Plus Shampoo.
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