Tread carefully: counterfeit tyres cost €2.2bn in sales, says report
The number of counterfeit tyres on the EU market equates to a loss in sales of approximately €2.2 billion ($2.7 billion) annually, according to a new report.
The report, published on February 23, comes from the European Union Intellectual Property Office’s (EUIPO) Observatory.
In addition to tyres, the report looked at the number of counterfeit batteries on the market.
It revealed that €180 million is lost annually due to counterfeit batteries, equating to a 1.8% loss in sales—compared to a 7.5% loss in sales from counterfeit tyres.
Lithuania was the hardest hit country in terms of percentage loss of sales for both tyres and batteries, with an estimated 19.2% and 5% loss respectively.
Meanwhile, Spain was the country worst hit financially by the counterfeit goods, losing €445 million in the tyre sector and €32 million in batteries.
The study said that counterfeit tyres and batteries often appear to be authentic as it is difficult to distinguish a genuine from a fake by checking the outer appearance.
“Consumers can therefore inadvertently purchase products that are substandard and unsafe, since testing and quality processes are often non-existent in counterfeit products,” it said.
The study highlighted that a lack of knowledge on the “precise scope, scale and impact” of IP infringement has hindered effective enforcement.
“Many attempts to quantify the scale of counterfeiting and its consequences for businesses, consumers and society as a whole have suffered from the absence of a consensual and consistent methodology for collecting and analysing data on counterfeiting and piracy across various sectors.”
Due to different approaches—such as surveys, mystery shopping and monitoring of online activities—it is more difficult to aggregate results of the whole economy, according to the report.
As a knock-on effect, the practice of counterfeiting also has an impact on the number of people employed by the tyre and battery sectors.
The report claimed that for the EU as a whole, an estimated 7,955 jobs could be created in the tyre sector if it weren’t for counterfeiting. Furthermore, approximately 363 jobs are lost in the battery sector because of counterfeiting.
Aside from the direct loss of sales and an impact on employment, the counterfeiting can have a detrimental consequence on other sectors.
“These indirect effects are a result of the fact that the different sectors of the economy buy goods and services from each other for use in their production processes,” the report said.
“If one sector’s sales are reduced because of counterfeiting, then this sector will also buy fewer goods and services from its suppliers, causing declines in sales and corresponding employment losses in other sectors.”
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