Region loses $600m to counterfeits, seeks new laws

Kenyan manufacturers are pushing for the amendment of the Anti-Counterfeit Act to make it easier to fight the war on fakes and other forms of illicit trade.

A report by Dateline International Consultants shows that the region loses up to $600 million annually to counterfeit and pirated goods. These goods are consumed in all EAC economies, with China emerging as the single largest producing country.

The pharmaceutical industry is the most affected — is estimated that 30-40 per cent of the pharmaceutical products in the region are counterfeits, says the report commissioned by the Kenyan Association of Manufacturers (KAM).

“We need to have uniform laws that can identify counterfeit goods and prosecute those found guilty,” said Betty Maina, the chief executive officer at KAM.

“Although there is legislation on counterfeits, these laws are not being implemented by partner states as required by the Treaty.”

The study shows that EAC economies appear to have mechanisms in place to combat counterfeiting and piracy and that, in most cases, those mechanisms meet the basic obligations contained in the WTO Agreement on Trade Related Aspects of Intellectual Property.

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“However, for partner states to fight counterfeits fully, there is need to establish a common approach for collecting enforcement data and developing a reporting framework to document the health and safety effects of counterfeit and pirated products,” said Duncan Waiguchu, chief consultant at Dateline International Consultants.

The problem of counterfeits is a major challenge to the growth of domestic manufacturing in the region. It has also driven out investors as they lose out on business opportunities.

The report shows that the food, beverages and tobacco sectors may be losing about 10-15 per cent of the market value to the counterfeit trade.