EU Loses EUR 60 Billion Each Year in Sales Due to Counterfeiting

The European Union Intellectual Property Office (EUIPO) recently published the 2019 Status Report on IPR Infringement that examines the economic impact of counterfeiting and piracy. The study was carried out through the European Observatory on the Infringement of Intellectual Property Rights and it refers to the following 11 sectors:

• Cosmetics and personal care;
• Clothing, footwear and accessories;
• Athletic goods;
• Toys and games;
• Jewellery and watches;
• Handbags and luggage;
• Recorded music;
• Spirits and wine;
• Pharmaceuticals;
• Pesticides; and
• Smartphones.

According to the study, the annual losses due to counterfeiting and piracy in the EU are estimated at EUR 60 billion (USD 67.7 billion), which is equivalent to 7.4% of all EU-wide sales. In Slovenia, these losses are estimated at EUR 215 million (USD 242.6 million) each year, equivalent to 12% of all sales, while in Croatia they stand at EUR 340 million (USD 387 million), or 10.7% of all sales. The total value of sales lost to counterfeiting in the EU is equivalent to EUR 110 (USD 124) per EU citizen per year, while in Slovenia this amounts to EUR 104 (USD 117) per citizen, and in Croatia to EUR 81 (USD 92) per citizen.

The report also estimates that up to 467,835 jobs are directly lost due to counterfeiting in the 11 sectors across the EU; in Slovenia this number is estimated at 1,979, and in Croatia at 3,999.

The top sectors according to lost sales in the EU are:

• Clothing, footwear and accessories (EUR 28,4 billion or USD 32 billion) lost each year, equivalent to 9.7% of sales in this sector;
• Pharmaceuticals (EUR 9.6 billion, USD 10.8 billion), equivalent to 3.9% of sales;
• Cosmetics and personal care (EUR 7.1 billion, USD 8 billion), equivalent to 10.5% of sales;
• Smartphones (EUR 4.2 billion, USD 4.7 billion), equivalent to 8.3% of sales; and
• Spirits and wine (EUR 2.4 billion, USD 2.7 billion), equivalent to 5.9% of sales in this sector.

The top sectors according to lost sales in Slovenia are very similar:

• Clothing (EUR 109 million or USD 123 million, 16.7% of sales);
• Pharmaceuticals (EUR 36 million or USD 40.6 million, 7% of sales);
• Smartphones (EUR 24 million or USD 27 million, 11.5% of sales);
• Handbags (EUR 20 million or USD 22.6 million, 16.4% of sales); and
• Cosmetics and personal care (EUR 10 million or USD 11.3 million, 6.7% of sales).

The situation in Croatia is almost the same – the top sectors according to lost sales are the following:

• Clothing (EUR 125 million or USD 142 million, 13.5% of sales);
• Pharmaceuticals (EUR 100 million or USD 114 million, 8.2% of sales);
• Smartphones (EUR 46 million or USD 52 million, 15% of sales);
• Cosmetics (EUR 29 million or USD 33 million, 10.1% of sales); and
• Spirits and wine (EUR 17 million or USD 19 million, 7.8% of sales).

The report concludes that in comparison with 2018, the amount of lost sales has decreased at EU level in all except in two of the analysed sectors, namely in clothing, accessories and footwear, where lost sales grew from EUR 23.2 billion (USD 26.2 billion) to EUR 28.4 billion of (USD 32 billion), and cosmetics and personal care, where the loss increased from EUR 5.8 billion (USD 6.5 billion) to EUR 7.1 billion (USD 8 billion).

Prepared by: Maja Žnidarič and Anamarija Stančić Petrović

For more information, please contact slovenia@petosevic.com or croatia@petosevic.com.

Sources: Slovenian and Croatian IPO and EUIPO websites