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East Africa: Are Brand-Owners Themselves Selling Fakes?

Karl Lyimo

5 October 2008

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The world is up in arms against counterfeit and substandard products. It is estimated that up to 70 per cent of goods traded in Third World countries are not genuine or are poor quality.

The East African Community states have not been spared and are only starting to act on it.

Although Tanzania has had legislation against counterfeit imports and domestic manufacturers on its statute books since 1963, it is only in 2005 that the government resurrected the dormant legislation and gave it teeth.

But -- pardon the cruel metaphor -- they must be false teeth. Counterfeit and shoddy goods still find their way into the domestic market far too easily, and the efforts to curb them are feeble, the results unimpressive.

For example, while the value of Tanzania's annual imports is $3 billion, only counterfeit goods worth $278,000 were seized and destroyed in the past year -- all of them in Dar es Salaam. These included the brands such as Sony-Wega (TV sets), Phillips (electric goods) and Kiwi (shoe polish).

The impact of this is not even that of the legendary drop in the ocean. Besides, tackling the issue at the tail-end of the chain of events is most unlikely to have a salutary effect.

What is at issue and needs to be addressed seriously for meaningful and lasting results are the causative that make indulging in the manufacture and export/import of counterfeit/shoddy goods possible and lucrative.

These conditions are debatable. One explanation doing the rounds is as disturbing as it is revealing. As such, it needs to be looked into calmly, boldly, objectively and thoroughly.

Years ago, some big brand manufacturers in the US and Europe shifted production activities to Asian countries in a bid to escapes high labour costs and taxes in the West. Arguably, it was cheaper to produce in the Far East for local consumption and export to Africa and other emerging markets.

But then, other (non-brand) manufacturers who were producing similar but cheaper (read shoddy) consumer goods were winning hands down in markets where end-users could not afford the expensive genuine brand products.

True to the adage if you can't beat them, join them, reputed but unscrupulous brand-owners, analysts speculate, turned to producing cheaper/shoddy goods themselves or sanctioned production to others under the table!

This soon became fashionable, and the result is of course proliferation of counterfeit merchandise worldwide...

Indeed, the brand owners occasionally go through the motions of protesting against the counterfeits -- but rarely follow through with deterrent measures beyond symbolic litigation here and there.

What their shareholders want at the end of the day are mega-profits, not moralising. In a sense, they hunt with the hounds and run with the hare.

In countries like Tanzania, the counterfeit merchandise trade flourishes largely because of poverty, compounded by institutionalised corruption among law enforcers. Otherwise, how does one explain the proliferation despite so many authoritative organs supposedly ranged against counterfeits?

These include the Customs, Food & Drug Authority, Standards Bureau, Port Health, Import Licensing, Fair Trade/Consumer-protection Agencies, the police, et al.

Then we have tried imports pre-shipment and destination inspection measures by international and domestic agencies at great cost.

Yet the malady keeps growing. Who should be held accountable for this other than unscrupulous brand-owners and corrupt officials? And, perhaps, impoverished consumers who can't afford the genuine article.

Karl Lyino is a freelance journalist based in Dar.

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