For the FMCG industry, the trade of counterfeit goods is a growing concern. A Large number of fake copies of different products are available in the market that are being sold at different shops and small stores. From fake bathing soaps to detergents, toothpaste to creams, hair oil to edible oil and much more one cannot even imagine the multiple negative effects of counterfeit products.
The counterfeit market in the FMCG sector has increased at 44.4 per cent per annum and is obstructing the growth of manufacturers.
Consumer packaged goods, automobile components, tobacco, mobile and mobile components, personal care products, and computer hardware and software are the consumer goods that are highly adaptable to counterfeiting. The value of such counterfeit items has reached Rs 1,054 billion in the year 2014, according to a study by FMCG.
An industry expert says that duplicate products in the FMCG sector have an impact on both producers and consumers. While the manufacturers suffer from a undermine brand image and low sales, the consumer is at the risk of losing money and a bad impact on his or her health. He also says that unethical manufacturers are also dangerous to the national economy. The main reason behind this is that they avoid taxes and lead to a rise in a host of other criminal activities. Counterfeit items also put an unnecessary strain on the health system.
With the packaging of original goods, counterfeiters also use refill or repackage fake goods. It has been noted that old plastic water bottles are being repackaged and sold in the market the same is the case with many other items. Such illusive duplication results in to a loss of consumers as well as the brand owners. A large portion of population settled in rural parts of India also suffers from uncontrolled counterfeiting of FMCG goods. The common man is getting easily affected by counterfeiting, with a little check of authorities and poor regulation and manufacturing guidelines.
Easy procurement and advancements in technology has made it possible for counterfeiters to build little backyard factories and hubs for the manufacturing of fake goods. As per the observation, counterfeiters are also making fake labels and packaging to cheat consumers. Alcoholic beverages and tobacco accounted for 65 per cent of the total sales in the year 2014-2015 sale of FMCG.
Although, in the last few years counterfeiters are facing problem in copying FMCG goods with efficacy, due to the latest and advanced packaging solutions. In order to protect their brands from the menace of counterfeiting, many companies have adopted the usage of security labels, security labels, barcodes and many other technologies.