Counterfeiting in the Third World
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When companies started relocating their manufacturing plants overseas, it
seemed like a brilliant idea: set up operations in a country with a
depressed economy, where the workers earn much lower wages than their
American counterparts, and you're bound to save money. This may be true,
but at what price do these savings come? Many companies with overseas
factories are now suffering huge financial losses at the hands of
counterfeiters, who have found it all too easy to copy the production
methods American businesses placed under their noses.
According to the IACC, 70% of medicines sold in the third world are
knockoffs. Anne Murphy, an attorney at Microsoft, claims that "More than
99% of the software [in Asia] is illegitimate copies." And the Recording
Industry Association of America says that in 1994, Chinese compact disc
factories manufactured three million legit discs, and 70 million pirated
ones. Why don't foreign governments do something about this? There are
several reasons. In countries with volatile political conditions, it's
advantageous to keep the people happy, and famous brand names at low prices
help. Just think about how excited you get when you buy a greatly desired
item on sale.
A second reason is simply that counterfeiting is very profitable. A foreign
government that is involved in the exportation of illegitimate goods makes
money on the sales, and saves money by not having to import the real thing.
There are billions of dollars to be made in such a huge international
market-it is estimated that 5% of all goods sold worldwide are phony. And
with counterfeiting operations so well-developed overseas, it's inevitable
that the goods will find their way into the U.S.
So what can you do? Instead of wondering if counterfeiting will be a
problem for your business, assume that it will be, sooner or later, and
start preparing now. Proactive anticounterfeiting programs can reduce the
chances of counterfeiters targeting your business, and can help you quickly
and discreetly eliminate the problem should knockoff versions of your
products start to appear.
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Surfing the Web
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To learn more about counterfeiting, diversion, and related
subjects, check out the following web sites:
Michael G. Kessler & Associates
http://www.investigation.com
IACC http://www.ari.net/iacc
INTA
http://plaza.interport.net/inta
NY Better Business Bureau
http://www.new york.bbb.org
Federal Web Locator
http://www.law.vill.edu/fedagency/fedweb/oc.html
Cop Net
http://police.sas.ab.ca
Software Publishers Association
http://www.spa.org
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How a Ferret Can Protect
Your Business
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As your business grows, you will inevitably meet with new suppliers,
subcontractors, or retailers eager to work with you. But how do you know
if they are legitimate, or if they have a history of diverting product?
Simple. Set a FERRET on their trail.
FERRET is a collection of proprietary databases that Kessler & Associates
use to help determine whether a business or individual has ties to illegal
activities. Using FERRET, we can quickly search thousands of
digitally-stored files in criminal and civil cases, law enforcement
agencies, corporate security departments, Customs records, our private
investigator databases, and on-line sources of information. FERRET can also
be used to conduct thorough and reliable due diligence searches of routine
business matters. When there's something you need to know, try FERRET. It's
the easiest way to ensure that you make your business decisions with open
eyes.
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The International Coalition Against
Diversion
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One of the best ways for businesses to avoid the problem of diversion is to
learn from other businesses' mistakes. The International Coalition Against
Diversion provides executives with a chance to hear what their colleagues
have done to resolve or prevent diversion activities. It gives you a chance
to use each other as resources.
The Annual ICAD meeting lets you learn from guest speakers with a proven
track record in fighting diversion as they address issues that affect
businesses today. ICAD members
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also benefit from the advice and experience
of investigative consultants like Kessler & Associates, as well as lawyers
and technology companies that specialize in addressing diversion issues.
Many of these businesses offer a discount to ICAD members who request their
services.
Annual membership in ICAD is normally $1500, but executives interested in
keeping their business diversion-free can sign up through Kessler &
Associates for $1000 their first year.
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Publisher: Kessler & Associates, Ltd.
Editorial Director: A. Reshen Editor: B. Quintana
Design Studio: Pink Coyote Design, Inc. Designer:
J. Ponzan Copywriter: A. Bernstein |
The Kessler Report (V1, N1) copyright © 1996 by Kessler &
Associates, Ltd. is published by-monthly. Send correspondence
to: Kessler & Associates, Ltd., Park Avenue Atrium, New York, NY
10017. The Kessler Report (V1, N1) is a registered trademark of Kessler &
Associates, Ltd. Printed in the USA.
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