Beauty and the Beast – cosmetic counterfeiting

Companies that operate within the cosmetics industry are painfully aware of the cost of counterfeiting. It seems that the bigger the brand awareness, the greater the chances are that the brand will be counterfeited. Security organisations and governments dealing in policing counterfeited products have subsequently turned their focus away from consumer education and now are focusing on the laws that govern anti-counterfeiting measures. Consumers, particularly in Africa, are not informed adequately, when faced with counterfeited products. With organised crime rings scattered throughout the continent, policing consumers is all but become impossible.

“The counterfeiters tend to target big-selling brands, with Perry Ellis, Dolce & Gabbana, Calvin Klein, and Davidoff among the manufacturers affected by the criminal activity. Counterfeiting of premium brands is expected to strengthen over the coming years.” – Technavio analyst Brijesh Kumar Choubey

So how do existing laws help stop cosmetic counterfeiting in Africa? According to Spoor & Fisher, the Counterfeit Goods Acts of most African countries set out to streamline and create effective enforcement measures to enable owners of trademarks, copyrights and marks protected to take action against the counterfeiting of their products.

In an essence, the majority of African countries have strengthened laws and empowered enforcement agencies to search, seize and prosecute with little interference red tape. However, a simple glance over to the atlas, the sheer size of Africa and the numbers of enforcement agents, leaves a glaring hole of opportunity for criminal organisations.

“Beauty products are meant to enhance your features. However, the fakes can, in fact, do quite the opposite. Our general rule is: if it seems too good to be true then it probably is.” – Det Supt Maria Woodall, Police Intellectual Property Crime Unit (PIPCU)

Like a bad rash, the problem persists and is showing growth. If companies are stuck between a mass of ill-informed consumers and under-resourced enforcement agencies, who or what solution can we look next, to bring this scourge under control?

 Security packaging – our knight in shining armour?

Adding security measures through print, labelling and tracking solutions have been around for many years. The underlying problem with these solutions is exactly that, they exist.  Organised crime is watching and duplicating with impeccable skill.

A dermatologist recently told the Fox broadcasting network. “Fakes cosmetics could cause acne on your face, dermatitis or eczema or scaling. Theoretically, you can absorb (them) through your skin too. There could be bacteria because there is no quality control. Anything could be in there.”

Syndicates are no longer those 4 burly guys sitting in a sedan skowering the streets for unsuspecting victims. Crime syndicates are corporations, sophisticated networks of hackers, informants and undercover agents, infiltrating pharmaceutical markets worldwide. Like spy-vs-spy, companies are consistently embraced in this battled of who to trust and who to fight.

What if there was a solution that eliminated human interference, with technology that cannot be replicated, a kind of unhackable security packaging 2.0?

The PeltaTM technology is based on the standard 2D code but extends the capability of the 2D code by adding a second layer of information. The second layer is hidden and invisible to the standard 2D code reader. The covert layer can only be decrypted by using a custom key, thus can be used as a basis of an authentication or track and trace solution. The licensee of PeltaTM can use the custom software for internal use and consumers may make use of a scanner application on their smartphone to authenticate the document or product.

 

The overt layer of information is read identically to standard 2D codes (i.e. QR, Data Matrix, Aztec, Maxicode, DotCode and others). This first layer of information is easily accessible and includes logistical or marketing information, easily read by scanner applications on a smartphone.

Pelta™ coding has proven successful in eliminating fraud in Countries worldwide. The results are promising and more can be done to turn the tide of counterfeiting.

“At some point, the cost of the solution is nothing compared to the loss a brand can incur when damage is done or lives are lost. Brands have to act or they show that they actually don’t care about fakes unless it impacts them financially enough to act.” – Kyle Parker, CEO Pagemark Africa

False profiting

According to Interpol, profits made from counterfeit cosmetics are used to fund drugs smuggling and terrorism. For this is the shocking flipside to the shadowy world of counterfeit cosmetics.

The cheaper imitations that are flooding the market may look legitimate — as well as please the purse — but they have been found to contain ingredients that in the worst cases, cause permanent damage to both the body and the brain.

 

There is no immediate solution to the scourge of counterfeiting. The positive spin is the overall commitment by pharmaceutical companies is to enlist support and measures to reduce the impact. From revenue to life loss, counterfeiting is now at epidemic proportions.