The bid to counter the counterfeits

The value of counterfeit goods produced globally is estimated at more than £300bn a year, according to the International Chamber of Commerce. The loss to UK industries is thought to be around £11bn a year.

Not only do brands and legitimate manufacturers lose sales to cheap copies, but a brand's reputation can be damaged when consumers unwittingly buy fake goods that do not function properly or aren't safe. One of the first indications a product is not genuine is often the packaging. Counterfeiters out to make a quick buck will not always replicate complex packaging. As a result, brands are introducing devices such as tamper-evidence closures and special print effects to make it easier to distinguish forgeries and protect brand image.

High value goods are the primary targets for counterfeiters, but items as humble as toothpaste are at risk. In June last year, fake tubes of Colgate-branded toothpaste were discovered in discount retailers in the US. The imitation Colgate contained the potentially harmful ingredient diethylene glycol, which is used in anti-freeze. The telltale signs that consumers were advised to look out for all related to the packaging; the fraudulent tubes were 100ml, a size not sold in the US, and featured spelling mistakes.

CDs and DVDs are also heavily counterfeited. In 2007, 2.8m fake DVDs were seized in the UK. CDs and DVDs can be cheaply reproduced using a home computer, but the packaging, particularly for box sets, is less so.

Special exceptions
St Ives Music and Multimedia in Crayford manufactures and designs packaging for the CD and DVD markets. Key accounts manager Andy Kyle says that while it is easy to get hold of a standard jewel case and reprint a simple paper inlay or booklet it is rare that anything more sophisticated will be attempted. Discs with genuine packaging will therefore be easily distinguishable from pirate copies.

"In terms of our day-to-day sheetfed work, counterfeiting certainly does affect us, as it takes away from the distribution of our work. However, our more specialised packs are not really affected. I've never seen one of our special packs reproduced." Kyle explains that for the average counterfeiter the investment required, in machinery and materials, would be prohibitive. Reproducing a simple board pack or box set represents an outlay many forgers will not make.

He adds that, particularly in DVDs, there is a move away from standard cases to custom designs. When St Ives produced the case for the film Made of Honour it wanted to create something special, which would add to the overall experience.

Working with Uniflockage in France, the company created a tactile, flocked effect in fuchsia pink. The flocking was applied to the folding boxboard, which was printed four colours and then given a high-end laminate to prepare it for the flocking. "It's a process that's been around for a while but it's not really been used in the commodity market before," says Kyle. The end result is a product that would be almost impossible for a counterfeiter to recreate.

As a high value item, mobile phones and their component parts also suffer. In 2007, US customs seized $16m worth of counterfeit consumer electricals, including mobile phones and accessories. Lambie-Nairn was tasked with making telecoms company O2 a brand that people would buy into. The London-based design consultancy created a distinctive graduated blue and a bubble design that would make O2 branding instantly recognisable even without the logo. Both the graduated blue and the bubbles have been trademarked by O2.

Lambie-Nairn client services director Nicky Nicolls explains that although counterfeiting wasn't the motivation for the designs, reproducing the exact blue graduation, with the correct colour balance, would be very difficult for anyone who didn't have the specifications.

O2 makes extensive use of Burgopak technology for packaging its mobile phones. The sliding packs are patented worldwide and Burgopak rigorously upholds these patents. Not only would the pack be more difficult for a counterfeiter to produce than a standard box, but it reinforces customers' perceptions of quality and reliability, explains a Burgopak spokesperson.

The artwork created by Lambie-Nairn to go on to the Burgopaks has to be carefully protected during the production stages. "We would never release artwork to a printer that we didn't completely trust," says Nicolls.

Tracking a product through the supply chain, from printer and manufacturer to retailer, can be an effective method of determining its authenticity. First Ondemand in Fareham, Hampshire provides authentication software for products and transactions. Product development manager Marcus Lawson explains that the firm's software generates unique random numerical identities. These can be printed on to packaging to enable authentication of a product at all stages of the supply chain, as well as providing a complete history of where the product has come from and how it has arrived at its destination.

This software would immediately identify a counterfeit pack or one that had entered the supply chain at an unexpected point. The technology has previously been applied to items such as passports but could be used on a host of items.

Sometimes, however, a more overt solution is required. In the Chinese white spirit market it is customary for bottles to feature a tamper-evidence metal seal around the closure. A small section of the seal snaps off when the bottle is opened, which ensures that any attempts to refill and resell it would be obvious. Nick Verebelyi, head of 3D structural branding and packaging at Design Bridge, which has worked on the Chinese spirit brand Wen Jun, says the seals are not just about counterfeiting. "It is a seal of quality. All of the premium spirits in that market have a lock. They are expensive components to manufacture, especially as they are all custom-designed, and wouldn't be used on a cheap product," he says.

Tooling up
Verebelyi adds that the use of any custom components, such as special bottle shapes, makes the cost of tooling prohibitively expensive for all but the most large-scale counterfeiters. The man on the street with a suitcase full of perfume bottles may be the public's image of counterfeiting. However, the operations behind him, that possess the money and machinery to manufacture the intricately shaped bottles, are necessarily much larger and more powerful.

Counterfeiting, in terms of the manufacture and sale of fake goods, is a greater concern in markets such as China, Russia, parts of Eastern Europe and Latin America. "It is not as much of a consideration in the UK. Things are more regulated; there are spot checks and organisations preventing copying. Therefore, tamper-evidence devices are much less about the criminal element in the UK and more about premium status," says Verebelyi.

However, this may not always be the case. Of the counterfeit goods seized by US customs in 2007, 80% came from China. Counterfeiting may not pose as great a threat to brands operating in the UK at the moment, but as the Chinese economy continues to expand and other developing countries join the list of emerging markets, the sources of manufacture and markets in which to sell counterfeit goods will also grow.

Preventing pilfering
It's the classic conundrum. Shoplifting costs brands and retailers money. But how much do you spend trying to make products harder to steal before the solution costs more than the problem?

"When designing a pack to try to combat pilfering it's very easy to end up making it much more expensive," says Caroline Airton, account director at ICM Creative Communications. "It's a case of how you can make it more difficult for shoplifters to get into without making it too expensive," she adds.

Pete Hollingsworth, managing partner at Windsor-based design consultancy Vibrandt, says the simple clam pack has helped to reduce theft. Vibrandt put Kodak camera films into clam packs to prevent thieves breaking open the bottom of cartonboard boxes and pocketing the films undetected.

Airton agrees that it is small items, which are easily pocketable, that are most at risk. ICM, based in Headingly, Yorkshire, works with Ring Automotive, which produces car parts and accessories. Replacement bulbs are a common pilfering target and the choice of pack format can be key to protecting them. Shoplifters will often remove an item from its packaging before stealing it, partly to make it easier to fit into a pocket and partly to remove any security alarm devices that might be attached to the packaging.

"Heat-sealed blister packs are much harder to open unnoticed than a cartonboard box. Anything that needs scissors to get into will generally be avoided by thieves. As a rule, if it takes about a minute to get open it will be left alone," says Airton.

Sometimes a wholesale format change is not necessary. Airton says that simply stapling closed a cartonboard box, or putting an adhesive label over the opening can make a big difference.

The pressure to introduce these measures comes from brands and retailers. Retailers conduct audits to see which products are stolen, and if one brand is particularly vulnerable, retailers can refuse to stock it. If brands don't respond to the challenge of theft they could end up being hit twice, losing products and stockists.