Western Cape Business News

Send  Share  RSS  Twitter  20 Mar 2009

VENTURES: Screws On Counterfeit Goods


Recent Western Cape Business News

As clothing traders stock up ahead of the 2010 soccer world cup tournament, the City of Cape Town has warned of tougher action against the sale of counterfeit goods.

“Conservative estimates are that at least 25% of the retail sales of sports licensed products are lost due to the sale of counterfeit goods,” says Alderman Ian Neilson, Mayoral Committee Member for Finance, Economic & Social Development and Tourism.

Only certain official manufacturers are given a license to make and sell rugby, soccer or cricket team jerseys, shirts, hats, flags and other merchandise.

These manufacturers pay a fee to the unions or teams for the right to use their logos. This is important income for them and is ploughed back into the development of the sport and the improvement of facilities for players and fans.

Counterfeit goods are those which are manufactured without the permission of the owner of a particular trademark.

“The production of fake goods undermines the manufacturing industry as producers are usually not registered for tax purposes. Buying unlicensed products not only results in a loss of revenue for the unions and teams, but also has a negative impact on the South African economy,” says Neilson.

The sale of counterfeit is particularly visible at traffic intersections, on street corners, and at flea markets and festivals. These goods are often cheaper than official licensed products because they are made in unlicensed factories, are not subject to taxes or royalties, and are often of a poor quality.

“The City wishes to remind the public that it is illegal to obtain, make, distribute, import or export counterfeit goods. Apart from the negative effect on the economy, trade in counterfeit merchandise is often linked to organised crime.

“Proceeds from counterfeit sales could ultimately be used to fund activities such as money laundering, human trafficking, drugs, illegal weapons trade and international terrorism,” he says.

The City is planning to tighten its draft Informal Trading By-Law to combat the sale of counterfeit goods.

“Selling counterfeit may result in the confiscation of such goods as well as the institution of criminal and civil legal action,” says Neilson.

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