Wilfred Edwin
18 September 2007
Nairobi — Authorities in Tanzania have launched a major crackdown on counterfeit goods from China with the seizure of television sets worth $47,000 and the breaking up of a software theft ring in an operation that could soon be extended to Kenya and Uganda.
Exports from the Asian economic giant - which over the past few years has gained notoriety as the world's leading producer of counterfeit goods - dominate both the Kenya and Tanzanian markets, a situation replicated in many African countries.
In a huge two-day operation involving lawyers for Hitachi East Africa - the TV distributors - officials from the Fair Competition Commission (FCC), the Tanzania Revenue Authority and the police, several major stores and warehouses in Dar es Salaam were raided. A number of suspects were arrested and electronic goods worth millions of Tanzanian shillings and certificates of authenticity with an estimated retail value of $1 million were seized.
In one raid alone, 120 counterfeit Hitachi TV sets were seized. Although the operation is not expected to break the back of purveyors of fake Chinese goods, it was expected to raise awareness in the public about the extent to which the counterfeits dominate the electronics market.
The counterfeiters target popular electronic brand names such as Hitachi, Samsung and Sony. A 14-inch counterfeit Hitachi Television goes for $75 while genuine ones retail at $200.
Saudin Mwakaje, a lawyer from the firm involved in the operation, told The EastAfrican in Dar es Salaam last week that the operation marked a milestone in the fight against piracy since, for the first time ever, the government had teamed up the private sector to take on an international counterfeiting ring.
Speaking from London, a spokesman for Hitachi Europe, Masanao Sato, told The EastAfrican the giant corporation would launch investigation into the matter.
"Hitachi and Oracle will market the IC, or integrated circuit, tags for a wide range of products, including cash vouchers, luxury items and home appliances," he said. The tags will be made by Hitachi and cost about 8 US cents each.
The IC tags are tiny chips that can store basic information about a product such as where it was produced and by which company. A reader can be used to retrieve that information and verify the authenticity of the product.
Piracy of branded and copyright goods has been a source of serious friction between China and several of its trade partners, forcing authorities in Beijing to turn the heat on enterprises suspected of engaging in the trade. But their efforts, though well publicised, have been dismissed as too little, too late.
Source close to the investigation say the counterfeit Hitachi TV sets were manufactured by a well known firm based in Guangzhou, although the user's guide indicated that the sets were produced under the supervision of Hitachi Electrical (Hong Kong) Digital Technology Co. Ltd.
The source said the counterfeit sets were exported into the country by two Chinese electronic stores.
Earlier in the week, the Tanzania Ports Authority and police impounded a consignment of 40 Sony TV sets imported from China at Dar es Salaam port, as well as a container full of fluorescent tubes worth about $10,000 (Tsh10 million). The tubes were marked "Made in Poland" and were imported from Dubai.
Dar es Salaam Central police chief Masindoki Masindoki told The EastAfrican that the police have arrested some suspects who will be charged soon.
Besides the electronic goods, a consignment of more than 300 cartons of fake Kiwi shoe polish worth $21,000 (Tsh21 million) was destroyed after it was seized a week earlier.
The campaign to flush out counterfeits will continue until the menace is reduced, said Michael Shilla, Director for Consumer Affairs and Administration at the FCC. "A counterfeiter causes the brand name heavy losses by misleading customers into buying a fake product in the belief that it is a genuine one," he said.
As of last week, the FCC was still contacting the manufacturers of the fluorescent tubes in Poland and the Dubai importers.
It is estimated that about 50 per cent of goods traded in Tanzania are counterfeit. In the electrical goods market, for instance, it is suspected that counterfeits accounts for between 30 and 40 per cent of the total value of imports. Trade experts blame trade liberalisation for fuelling the illicit trade.
According to Mr Shilla, parliament is expected to pass amendments to the law barring counterfeits in November to give the government more teeth to deal with the menace.
The FCC said it was also working with the Tanzania Drugs & Food Authority (TDFA) to inspect and verify building materials, electrical appliances, medicines, cosmetics and toothpaste imported into the country
Tanzanian authorities have been on the alert for toothpaste imports from China after it was discovered in May that diethylene glycol, a deadly chemical used in engine coolants, was found in toothpaste made in China.
However, the FCC's effectiveness in dealing with the problem is hamstrung by the shortcomings in the Merchants Act, 1963 (Cap 519), which requires the FCC to seek a court approval before making any inspections and arrests over counterfeits.
Since Tanzania liberalised trade in the 1990s, the market has been flooded with counterfeit goods. As a result, trade in counterfeits, especially in the construction industry, electronic goods, medicines, batteries, matches, tyres and motor vehicle spare parts has been expanding.
Counterfeiting of manufactured goods has grown to become a serious problem in international trade, surpassing the illicit drugs business, trade experts say. For instance, reports indicate that out of the total world trade of $6.5 trillion in 2004, $450 billion was accounted for by counterfeits while $400 billion was illicit drugs.
The Confederation of Tanzania Industries (CTI) said last week it has commissioned a firm to conduct a study to determine the magnitude of the counterfeit trade problem in Tanzania. The first draft of the study will be ready this October. It is expected to focus on the general evaluation of the problem of counterfeits with a view to recommending an effective government mechanism to address it.
Additional Reporting by Mike Mande
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