FMCG industry's initiative to protect brands

By Our Corporate Reporter

CHENNAI, FEB. 21. Leading FMCG manufacturers feel that the existence of a large number of counterfeit and pass(look-alike) products of popular brands are a sad reflection of the state of trademark protection in the country.

Favourite brands such as Parle-G, Fair and Lovely, Tiger Biscuits, Dairy Milk, Perk and Ariel are duplicated and sold with names such as Paile G or Party G, `Pure & Lovely' or `Flair & Lovely' and similar sounding names.

A study conducted by AcNielsen, the market research agency, indicates that on an average, the loss to the government in sales tax from such spurious products is 10 per cent, in excise duty 15 per cent, in octroi 2 per cent and in income tax 45 per cent. The minimum loss to the government is placed at Rs. 830 crores, and to the FMCG industry Rs. 2,500 crores in a year.

But a more disturbing impact of these fake products is on consumers' health. Adulterated products, particularly in the food and drug categories can be dangerous. In most cases, these spurious products are produced under unhygienic conditions and without proper technical supervision. The ingredients used are not of standard quality or quantity and do not provide the benefits of the established brands and even lead to undesirable side effects. The spurious products have the same MRP as genuine brands. The dealer in such cases buys look-alike products cheaply and sells them at the genuine product prices.

The manufacturers have been countering such practices through the legal process. To bring some order in the battle of defending consumer rights as well as to launch a unified defence against these spurious product manufacturers, the Federation of Chambers of Commerce and Industry has set up a special brand protection committee(BPC). This committee will not only assist these companies by providing actionable information, but also take actions directly on categories where the menace of counterfeit and pass off products is more, according to P & G release.

At present, the BPC has members from P & G, HLL, Nirma, Colgate, Marico, SmithKline Beecham, Coca-Cola, PepsiCo, Gillette, Britannia and others. The market research company, AcNielsen and consumer activist groups such as CERC, Ahmedabad, are also on the committee. The chairman of BPC, Mr. Bharat Patel says, ``The mission of the BPC is to collaborate with government authorities, industry and trade associations, corporates and consumer bodies to eliminate counterfeit and pass-off products.'' Mr. Patel, who is also the chairman of Procter & Gamble commented ``Counterfeiting harms the companies manufacturing genuine products of high quality and sales loss is tremendous. There is also obvious damage to the genuine brands' image among consumers and their goodwill is also eroded.''

In its mission, the BPC is adopting a four-pronged strategy - advocate more effective enforcement of existing laws and rules; measure and publicise the negative impact of counterfeits and pass-offs; take action against infringers via regulatory authorities; and open communication channels between stakeholders to generate awareness and stimulate action.

The BPC has set up a website, www.fake-busters.com to spread awareness on the subject, provide actionable information to all the stakeholders and enrol consumers and authorities in the fight against counterfeit and pass-off products.

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