OECD gauges impact of counterfeits on UK economy

In 2021, the value of counterfeit and pirated goods imported into the UK amounted to £7.1bn (around $9bn), equivalent to 1.5 per cent of total UK imports, according to a just-published report.

Although the volume of seized goods fell during the COVID-19 pandemic, the UK remains vulnerable to the effects of counterfeiting and piracy, with levels now returning to pre-pandemic levels, according to the Organisation for Economic Cooperation and Development (OECD) analysis.

"The best estimates indicate that global trade in counterfeit and pirated products that infringed UK trademarks accounted for as much as £12.1bn, equivalent to 2.2 per cent of total UK manufacturing sales," it finds. "Estimated forgone sales amounted to £4.8bn or 0.7 per cent of total UK wholesale and retail sales."

Compared to 2016 – the period covered in the last edition of the report – this value decreased in both absolute terms (from £16.2bn) and relative terms (3.3 per cent of imports), with the industrial sectors most affected listed as: household furnishings and equipment; automotive spare parts; and electrical household appliances, electronic, and telecommunications equipment.

Electronics and automotive spare parts are particularly hard hit according to the report (PDF), which estimates the trade value of these categories at £3.5bn and £2.2bn, respectively, in 2021.

The OECD report estimates that more than half (53 per cent) of imported counterfeit and pirated goods into the UK were sold to consumers who knew they were buying fakes, with the remaining share purchased unwittingly.

"Most fake goods imported into the UK come from Asia and the Middle East," according to the report, which notes that Hong Kong was the top economy for counterfeit imports arriving in the country, accounting for 89 per cent of customs seizures, followed by the People’s Republic of China at 10 per cent and the United Arab Emirates (UAE) at 1 per cent.

"Intellectual property (IP) is a driving force of our modern economy, propelling innovation, growth, and competition," notes the document.

"Innovation and economic prosperity, however, is threatened when IP is illegally infringed by bad actors," it goes on. "Counterfeiting and piracy strain financial profits and government revenue, threaten jobs, harm consumer trust, and can pose serious health and safety concerns."