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FIGHTING THE FAKERS

15th March 1986, Page 43
15th March 1986
Page 43
Page 44
Page 43, 15th March 1986 — FIGHTING THE FAKERS
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Which of the following most accurately describes the problem?

Spares manufacturers have succeeded in keeping counterfeit parts off the UK Market, but their international battle to protect legitimate parts business is far from over. David Wilcox reports

OUNTERFEITING is a serious problem. It is theft, plain and simple. And it is costing motor parts manufacturers their utations and C.140 million a year in t expert earnings.

2ounterfeit parts should not be ifused with -copy parts" or any other le of non-genuine component. Copy pattern) parts are merely alternatives the truck manufacturer's "genuine Is". They are not being falsely ;cribed and they are perfectly legal, :n though the truck manufacturers y curse them because they take a ire of the UK spares market.

?arts that are counterfeit arc 3gether less wholesome. They arc ;t defined as ones manufactured to neone else's design and sold under a sleading trademark. In short, they are :tending to be something they are t.

The range of products being interfeited is vast. The best known imples are designer label clothes, sette tapes, perfumes, spirits, toys, armaceuticals, cameras,

itches . and motor parts. The good ws is that while many of these tinterfeit goods can be found

culating in the UK, fake motor parts mot. The bad news is that the fake rts are still doing enough damage in : export markets to present a ;nificant threat.

It is not just the UK parts inufacturers that are suffering; irope-wide, motor parts manufacturers imate that counterfeiting is costing )00 jobs a year.

UK parts manufacturers who have mble in overseas markets with unterfeiting are generally reluctant to urt publicity. They fear a loss of autation as UK customers become spicious of the genuine article. Neither , they want to make themselves a -get for yet more counterfeiters. veral manufacturers contacted by CM not want to be quoted on the bject, even though they insist that the ce parts are not to be found in the UK; their problem is restricted to certain export markets.

But it is not difficult to guess which companies are hardest hit. The items that are most commonly faked are the fast-moving consumables such as filters, brake and clutch parts, oil seals and gasket sets.

COUNTERFEITING started to escalate into a significant problem for parts manufacturers in the late 1970s. In those days, the vast majority of the fakes originated in Taiwan. From here lake parts flooded the Far Eastern markets.

Legitimate manufacturers joined forces to counter the counterfeighters. The Association of European Parts Manufacturers established a working , party to tackle it, while on a domestic level the Society of Motor Manufacturers and Traders (SMMT) set up a fighting fund for its member companies in the parts business. The SMMT's fighting fund now has 14 members who subscribe to the cost of investigations in the worst-hit export markets.

Most UK parts manufacturers report that Taiwan is no longer such a major problem for them. There appear to be three reasons for this. First, the Taiwanese government has tightened up its own controls. Second, investigations and pressure from the European manufacturers have paid dividends. And third, British vehicles that once held a larger share of the Far Eastern markets are no longer so important; the counterfeiters are turning their attention to Japanese vehicles . . .

The Taiwanese problem may have receded, but it has been replaced by counterfeiting operations in many other countries. Fake motor parts are now being produced in appreciable quantities in Pakistan, India, Korea, Thailand, Nigeria and Singapore. It is also reported that the business has spread from the Far East into the Middle East and even closer to home; Turkey, Egypt, Greece and Italy are mentioned by some people in the industry.

Turner and Newall, the parent group of Fcrodo brake products, faced enormous problems in Nigeria a couple of years ago with spurious brake linings. Robin Hadfield, who handles trademark matters for Turner and Newall, admits that locally-produced fakes were actually out-selling the genuine item in Nigeria. Now, as a result of sheer persistence and legal action in Nigeria. Hadfield can report: "1 would not claim that the Nigerian problem is totally under control now, but at least the odds are in our favour."

FOR Turner and Newall, and many other European parts manufacturers, Pakistan has emerged as the number-one culprit. Unfortunately its fakers' geographical influence is spreading because the counterfeiters are not content with their own home market. Counterfeit motor parts made in Pakistan and the Far East are now appearing in the Middle East and Africa.

Distribution is not always direct. An added sophistication is to route the fakes via the genuine part's country of origin SO that extra credibility is derived from the fakes' arrival from the "correct" country.

An example of this re-exporting technique came to light earlier this year. A consignment of 5,0(X) counterfeit fuel level gauges was brought to the attention of the trading standards officers in the London borough of Wandsworth. They were marked as Smiths Industries gauges, but turned out to be made in Korea. They had been en route to lran via an Iranian middleman in the UK. The seized gauges were put in the crusher two weeks ago; the errant Iranian was fined 11,500 and ordered to pay costs of 0,000.

A further subterfuge adopted by the counterfeiters is to leave the parts unwrapped as long as possible, putting the fake cartons in the bottom of the export crate so that the parts can be packaged by the middleman at the very last opportunity. This drastically reduces the risk of discovery before despatch — providing the parts themselves are not carrying a false trademark or identification, they are not detectable as counterfeits.

What makes motor parts so susceptible to faking is that the unsuspecting ultimate buyer — the vehicle owner — will probably not even see the part. It may well be fitted by an unscrupulous garage which is charging the genuine-article price for the nongenuine part,

SPOTTING counterfeit parts can range from being ludicrously simple to virtually impossible. SMMT legal adviser Peter Groves has a small 'black museum' of fake parts, collected in various third-world countries. Their packaging is the most obvious give-away, with the trade name often mis-spelt. Changing one letter in the name does not excuse the counterfeiter; the intention to deceive is there. Even mis-spelt names can go unnoticed in non-English-speaking export markets.

The motor parts manufacturers do not differentiate between commercial vehicle and car parts in their counterfeiting statistics. But one major parts manufacturer estimates that commercial vehicle parts account for 25-35 per cent of the fakes. The proportion is surprisingly high because of the dependence on buses, trucks and light commercials such as pick-ups in thirdworld countries where counterfeiting is prevalent.

For some safety-critical parts the inferior counterfeit can be lethal. The most notable example of this occurred several years ago when a fake brake actuator diaphragm for a bus turned up in the garage of National Bus Company subsidiary Hants and Dorset. The genuine part, by Clayton Dewandre, is good for at least one million brake applications; the counterfeit diaphragm failed after 12.

This was a highly unusual case because the fake part surfaced in the UK, albeit by a tortuous route via Hong Kong and supplied unwittingly by a bona-fide source.

IT IS the use of dealer networks that has been instrumental in keeping counterfeit parts out of the UK. Nevertheless, manufacturers are eternally vigilant. Several, along with the SMMT, are members of the AntiCounterfeiting Group (ACG) which is pledged to stamp out counterfeiting of all products, whether it is occurring in this country or in export markets.

The ACG members remain anonymous, but number more than 60 companies whose products arc the targets of the counterfeiters. A major part of the AC:G's effort is spent convincing people that counterfeiting is serious and that the existing measures against it are inadequate.

At present, counterfeiting comes under criminal law within the confines of the Trade Description Act 1968, which carries a maximum penalty of .2,000. There are a number of drawbacks with this, according to the ACG. First, counterfeiting tends to be regarded as a consumer protection offence, not fraud, with the result tha fines are too small. Second, local authorities' trading standards officers have to enforce the act and their resources are limited. Their investigations have to be localised, whereas counterfeiting is rarely so parochial.

Alternatively, a manufacturer can pursue a civil remedy under the Copyright, Design or Trademarks Ac The problem here is that it can be cos and difficult to gather the necessary evidence and to bring the case to coui So the ACG is pressing for counterfeiting to be made a specific criminal offence in its own right, punishable by fines and or prison sentences. The group has put togethet draft of the necessary legislation and i actively lobbying Members of Parliament to take up the cause. It has some strong industrial and conunerci support and looks likely to succeed.


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