Counterfeiting in the Wine and Spirit Sector Across the EU is Costing Business €1.3 Billion Yearly

MEDIA ROOM

On the 26th of July 2016, the European Observatory on Infringements of Intellectual Property Rights under the European Union Intellectual Property Office released a report on the economic cost of intellectual property infringement.

The European Observatory has evaluated the negative impact counterfeiting and piracy are having on legitimate businesses, governments and consumers. This study has paved the way towards the quantification of the impact intellectual property rights infringements have in the EU with respect to the spirits and wine sectors.

The report indicates that 4.4% of the legitimate sales of spirits and 2.3% of the legitimate sales of wine are ‘lost’ each year due to counterfeiting of alcoholic drinks. These ‘lost’ sales translate into the loss of 4,800 jobs across the wine and spirit sector in the EU since manufacturers in the industry are hiring fewer employees as a result of the loss of revenue from the counterfeited goods.

Counterfeiting has a ripple effect on the entire industry, and when this is taken into account, 18,500 additional occupations are lost across the European economy, of which notably, 8,600 jobs are in the agricultural sector, while 1,300 jobs are in the food industry. It is estimated that the total yearly loss of revenue as a result of the counterfeited products across the EU is at €1.2 billion.

The countries which have been effected the most due to counterfeited products, are the big European countries which include Spain, Italy, France, Germany and the UK, averaging a loss of €157 million, with Spain heading the biggest loss of €263 million.

This is the eighth report the European Observatory has published in a series of reports quantifying the economic impacts of counterfeiting. The European Observatory will be issuing additional reports which will analyse other sectors including the pharmaceutical industry and the automotive market.