INTRODUCTION

Road Blocks of Branded Products Spurious Products

INTRODUCTION

India has a population more than 110 crore among which 60 70% of its resides in rural India. India is a developing country because many MNC operate their business here and they are successful. These companies face stiff competition from each other but their hidden competitor are fake product manufacturer mostly in rural areas. The companies such as P&G, HUL, Marico, Glaxo Smith Kline, Coca Cola, PepsiCo, Gillette, etc do some much commitment by using their financial and physical resources to establish their brand. The brand establishment is not just one-day effort effort, it takes years. They spend so much money for ads campaign especially FMCG companies for brand building.

All the spurious product manufacturers have to do is copy the established brand name at a cost of few thousands of rupees and sell it in the market place. They spend most in packaging because for copying the original brand it is the basic requirement. This duplication takes place in all sectors and especially in FMCG sector. Food items and medicines are major products.

Adulteration is a part of spurious product. Adulteration is more in spurious product. Spurious products are low quality goods, which have a high level of adulteration. These products get successful because they use the brand name of established company. These products are less in urban areas because of high literacy rate and good disposable income of people. Manufacturer of spurious and adulterated products operate most of their business in rural areas because rural people are not able to distinguish the original brand with fake brand because literacy level is less in rural areas. In some cases their income is also not high so that they cannot afford branded goods such as cooking oil, spices, milk and milk products, etc. thats why they purchase local brand which are highly adulterated.

Counterfeit and Pass off Products

Counterfeiting is a kind of duplication where even the original manufacturer would not be able to distinguish between a genuine and a fake product. These fake products bear the identical name of the original product, its packaging, graphics, color pattern, design and even same name and address as the genuine manufacturer. A pass-off product, on the other hand, is one that comes with a few minor changes from the original product. The slight changes are made to avoid being categorized legally as counterfeits. "The Economist" defines counterfeit as, "something that is forged, copied or imitated without the manufacturer having the right to do it, and with the purpose of deceiving or defrauding." Such rights are legally enshrined in patents (linked with inventions), copyright (which covers literary, musical and artistic works and software), trademarks (which include words, pictures and symbols), industrial designs and other forms of intellectual-property protection.

Counterfeiting deceives the consumer. It thus tarnishes the image of a genuine manufacturer, as its brand is a promise of quality and value. The Brand - a company's most valuable asset can be destroyed when a trademark is imposed on counterfeit products of inferior quality. When a brand loses value, legitimate business loses sales and this can pose a long-term threat to profitability.

Counterfeit products include any product bearing an unauthorized representation of a manufacturer's trademark or trade name. Examples of products, which have been counterfeited, include prescription and over-the-counter drugs, clothing, credit cards, watches, pacemakers, and machine and automobile replacement parts. Because counterfeit products are often of sub-standard quality, there are potential safety risks which may cause personal injury as well as economic loss.

Only in India, the "fake" market is estimated to be worth more than $2 billion and it's growing by nearly 20% every year. The cost to the top companies in India is a whopping Rs 4,000 crore per annum due to competition from counterfeit products or look-alikes, excluding the crores of rupees spent to protect top-selling brands from this threat.

The practice of counterfeiting is illegal. India does have laws protecting Intellectual Property. However, in practice, protection is weak. Fighting counterfeiting requires clear rules on enforcement and trained police, judges and customs officials. It also requires the inclination and the authority to check and seize suspected counterfeits.

Counterfeiting as a menace is a global phenomenon. Companies will never win the war against counterfeiting on their own. At best they will keep counterfeiters on the run. In order to stop the rising tide of counterfeit, industry needs to work in tandem with the government and create consumer awareness.

Pass offs are those products whose brand names are played around with, to sound and resemble the original products. This however is only are face of the massive illegal trade in the sale of fake products in the rural market.

TYPES OF SPURIOUS PRODUCTS

Spurious brands are passed off in three forms:

1. Look-alikes: These are products that are similar in shape, size and colour to the prominent brands. Manufacturers of such spurious brands mostly ride piggyback on the advertising campaign of larger players and establish their own brand in the region. The look-alikes sport colour schemes that resemble that of popular brands, but the brand name is totally different. The look-alike business is done openly. The manufacturers do promotional campaigns and even go to the extent of displaying their manufacturing units names and addresses on product wrappers. The product too may be of acceptable quality and is priced 10-15 percent lower than that of the established brands. The margins offered to wholesalers and retailers are also higher than what established companies offer.

2. Spell-alikes: The spell-alikes are more dubious than the look-alikes. The packaging is similar to that of established brands, and you may have a Viggo instead of a Vicco or a Pomes instead of a Ponds. These are obviously intended to cheat. Such spell-alikes generally have the genuine products MRP printed on them, but the retailer willingly lowers the price after a bit of bargaining. Most spell-alikes have an extremely vague manufacturers address on the packaging that is impossible to trace.3. Duplicates: The third variety is the exact duplicate. These carry the name and address of the genuine company, but the product inside is spurious. Duplicates have the established manufacturers address, as the packaging is usually bought from junk shops. Used packets are refilled with spurious products and passed off as the real thing. They are the most dubious of the lot because they can rarely be identified. Duplicates hit cold beverages hardest because the bottles are easily available and can be refilled with some colourful soda water.

Eliminating spurious brands is not an overnight affair, but their campaign to do so may get them negative publicity as well; consumers may avoid the product altogether, fearing that they may be buying duplicates. And finding the counterfeiters is very difficult as these fly-by-night operators can easily change the locations they operate from. Besides, even if a manufacturer is nabbed, getting bail is not difficult as the offence is non-cognizable. It merely halts the illegal activity for a temporary period. Its soon back to business at a different address, in a different grab.

LIST OF FAKE BRANDS AVAILABLE IN RURAL AREAS India is the world's `leading producer' of counterfeit drugs and the FMCG industry in India loses Rs 2,600 crore per year to fake goods manufacturers. "Name the product and you will find between two and 200 copies of it that compete for customer attention. At times it also happens that in the usual packet of 10 tablets taken over the counter by customers, a couple of it maybe fake, which had been removed at some point of time in the chain.

Original ProductFake Product

Dairy Milk Daily Milk

Kit Kat Kir Kat

Coffee Bite Coffee Toffee

Mango Bite Mango ripe & Mango Bits

Polo Rolo

Vicks Vibex, Vikas

Head and Shoulders Head and Showers

Sunsilk Sunmilk

Thums Up Toss Up

Lehar Lahar

Lifebuoy Loveboy

Tata Teta

Ponds Pomes

Fair & Lovely Pure & Lovely

Parachute Parashudh

Clinic Plus Cosmic Plus

Parle - G Parla G

Colgate Toothpaste Collegiate Toothpaste

Vicco Viggo

Lux Luk

Pepsi Tipsy, Sipsy, Dipsy

7UP 1UP

WHERE SPURIOUS BRANDS EXISTS

BRANDSNo. of look alike BrandsMajor States

Dabur Vatika2Pun/Har, Assam

Clinic All Clear38Del, Assam, Bihar, M.P.

Surf New Excel Act Oxygen5Bihar, W.B., Guj, M.P., Maha

Horlicks2Assam, Karnataka

Colgate Dental Cream9W.B., Bihar, M.P.

Colgate Tooth Powder6Assam, Bihar, Maha

Dabur Amla34Raj, U.P. Pun / Har

Panteen Pro-V New7U.P., Bihar, Guj, M.P.

Ariel Power Compact4Assam

Iodex26U.P., Guj, M.P.

These look-alike or imitation products effectively compete against the originals in the market place thereby costing the legitimate industry crores in revenue. There are around 128 versions of Parachute Hair Oil and 44 types of Vicks VapoRub. It was revealed that for every 100 genuine strips of Vicks Action 500 there were 54 look-alike strips in market. Similarly there were around seven look-alikes for every 100 genuine Vicks Cough Drops; five look-alikes for every 100 genuine Vicks VapoRub; in total, there are 106 `infringers' on the Vicks franchise.

COUNTERFEIT AND SPURIOUS PRODUCTS -THE FACTS

The Indian economy has undergone a number changes in the last decade due to liberalisation and globalisation. Apart from the positive effects of increased goods and services available to consumers, the negative effects of counterfeiting, adulteration and manufacture of spurious goods has become an increasingly dangerous menace to consumer choice, health and the economy. Though this problem has always existed, now more than ever, counterfeit and spurious products have invaded every aspect of our lives. From products such as radios, geysers, computer softwares & phones to food items, beverages, cosmetics and medicines, all have been illegally duplicated, copied and counterfeited.

Due to a lack of consumer awareness, weak enforcement of existing laws and rapid innovations in technology, the production and distribution of fake and counterfeit products has become so widespread that, today no consumer can be sure of the authenticity of the product he or she he has purchased. Today many consumers are duped into believing that the products they are buying are genuine when in reality they are actually fake. Such spurious products have greatly hampered the growth of consumer goods industry and negatively impacted consumer goodwill.

It is clear that Counterfeit and pass off products infringe at least two of the consumers rights, namely: -

Right to be Informed -Means right to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices.

Right to Safety - Means right to be protected against the marketing of goods and services, which are hazardous to life and property. The purchased goods and services availed of should not only meet their immediate needs, but also fulfill long term interests.IT IS EASY TO LAUNCH SPURIOUS PRODUCTS

Product counterfeiting is big business. It is profitable as well. The counterfeiter makes money by deliberately assuming the identity of an established, reputable manufacturer. The counterfeiter does not need to invest in expensive quality material or quality control since the product he is producing is inferior. He does not need to incure expenditure on R&D, advertising campaigns or marketing as he is riding piggyback on a manufacturer who has invested enormously in developing or promoting a brand. All he needs to do is thus copy a popular product, sell it at a discount and rake in the profits as his overall costs are low in comparison to those of a genuine manufacturer.

SPURIOUS PRODUCTS EXISTS MORE IN RURAL AREAS

The reason for the spread of Spurious, Counterfeit and adulterated products all across the country is that illegal manufacturers make a tremendous profit from the production and distribution of these goods. The reason for such profitability is that many of these individuals carry on fly by night operations in small labs or in old factories and garages. They, unlike legitimate manufacturers do not spend any money or resources in establishing world-class labs with international safety and hygiene standards. They spend no time or funds conducting clinical tests or research & development (R&D) for the products they produce. As they do not have any substantial overheads, all the money derived from the sale of such products goes directly into their pockets. All these manufacturers have to do is to simply copy the formula, composition, texture etc of the original product, reproduce its packaging and then sell.

The fake or imitated products cash in on the success of the original product. The cost of advertising, research, development, trials, overheads, etc is all borne by the original company or product manufacturer. Advertising campaigns cost large FMCG companies crores of rupees. All the spurious manufacturer has to do is copy the entire product at the cost of a few thousand rupees and sell it in the market place. Even the ingredients are bad imitations of the original and most consumers are not able to make out the difference or find out only after purchasing the product. Meanwhile the spurious manufacturer makes a killing in the bargain. Due to the advances in technology any measures adopted by the original product manufacturer to counter and prevent any imitation would almost be of no use as the spurious manufacturers would quickly adapt and reproduce the same product within a few months. A lack of enforcement of existing laws by the concerned authorities has contributed to the widespread imitation of these kinds of products. The manufacturers of such drugs and medicines are quite confident that since the offence is difficult to prove they would not face any serious charges. So far the offence being a bailable one, illegal drug makers could only be booked for minor charges. The rate of conviction for such offences was extremely low. Despite crores of rupees worth of drugs being seized by law enforcement authorities from time to time it seems to have had no real effect on the manufacture and trade in fake and counterfeit products.

Raids conducted by the relevant authorities had real no effect and as soon as the raids were over the spurious manufactures would shift their operations to another locality. There would be almost no follow up action by the authorities. Most

importantly since there is almost no consumer awareness about Counterfeit, Spurious and Adulterated products the counterfeiters are able to continue selling their dangerous products.

The problem of fakes is more rampant in rural areas due to low literacy levels and consumers reliance on product identification through pneumonic.

In rural India, where the incidence of piracy is four times that of urban India, the impact of counterfeits is even more pronounced. However, the consumer is either unaware or apathetic to the menace. "Since spurious goods sold under fake brands physically impact the consumer, a consumer push is needed to act as a necessary catalyst to address the problem, Since the rural consumer is illiterate and exposed to various brands only through the media, the chances of him going to the market with a flawed brand recall and being duped are high. This eventually affects his post-purchase decisions and can harm the image of the company. Leave alone the vast uneducated masses that live in this country, hardly any of the educated informed consumer would also be in a habit of verifying the accuracy of the product name or manufacturer before buying goods at the local kirana shop. A recent study conducted by AC Neilson reveals that 80% of consumers realize they have brought a counterfeit or fake product only after they have consumed it. And there may be a large number of consumers who never realize.

Rural consumers also find unique uses for products. A washing machine being used to churn lassi in Punjab is now part of folklore, but here are more anecdotes, Horlicks is used as health beverage for cattle in Bihar, in Haryana, Godrej Hair Dye is used to make a pitch black beauty out of a buffalo and North Indian weavers are using condoms. For what? Well, to protect their fingers!

Villagers react differently to different products, colours, sizes, etc. in different parts of India. Thus utmost care in terms of understanding consumer psyche needs to be taken while marketing products to rural India.

Thus, it is important to study the thought process that goes into making a purchase decision, so that marketers can reach this huge untapped

Due to a lack of consumer awareness, weak enforcement of existing laws and rapid innovations in technology, the production and distribution of fake and counterfeit products has become so widespread that, today no consumer can be sure of the authenticity of the product he or she he has purchased. Today many consumers are duped into believing that the products they are buying are genuine when in reality they are actually fake. Such spurious products have greatly hampered the growth of consumer goods industry and negatively impacted consumer goodwill.

The look-alike manufacturers' strategy is to piggy back on the advertising campaign of the larger player and establish their own brand in the region. The researchers found that the look-alikes business is not a clandestine operation. Promotional campaigns such as wall paintings and display stalls are used and the manufacturers have no qualms about displaying their manufacturing units' name and address on the product wrapper. The product too is always of acceptable quality. However, the look-alike product is priced 10-15 per cent lower than the established brand, with margins offered to wholesalers and retailers higher than what established companies offer.

However, it's not the same case with spell-alikes and duplicates. The manufacturers involved in both these obviously intend to cheat. Such spell-alikes generally have the genuine product's MRP rate printed on them, but the retailer willingly brings down the price after a bit of bargaining. Most spell-alikes have an extremely vague manufacturers' address on the packaging that is impossible to trace. But duplicates have the established manufacturer's address, as the packaging is usually bought from the Raddiwalla route and filled with a spurious product.

In terms of quality, MART found that spell-alikes and duplicates have very poor quality and the consumer realizes that he or she is duped after using the product. In fact, the Nielsen report revealed that eight out of 10 customers who purchased such products were cheated unwittingly. What makes things worse is the marginal penetration of the genuine product into these areas.

Another interesting observation is that FMCG counterfeit products only come in the smallest size of packaging. In the rural segment and slums where fake products thrive, the consumers low purchasing power makes sachets and 25g and 30g packs popular. And it is in the case of these small packs that consumers are duped more easily as the quantity is not large enough for the buyer to discern its quality. This is especially so in sachets of shampoo, hair oils, detergents and so on.

But if small is spurious in the FMCG sector, it is not so in the other segments where counterfeit is rampant. Crying for similar attention is the branded garment industry, book publishing, music industry, movies and information technology. And many more challenges.

HOW TO IDENTIFY SPURIOUS PRODUCTS

The menace of these look-alike and pass-off products is not easy to detect since they carry the similar brand name, graphics, packaging colors and get-up with minor alterations. This can confuse buyers, and they often dont even know that they are buying a fake product. These spurious products replicating well-known brands are of lower quality and efficacy, with adverse side effects and safety hazards to consumers. For example, a low-quality beauty product can cause skin rashes and other health problems. MART's study has thrown up some interesting facts that could help in understanding the operations undertaken by illegal manufacturers. Researchers Anirban Ghosh and Vikram Bhalla of the Management Development Institute (MDI), Gurgaon under the guidance of MART President, Pradeep Kashyap, found that there are three kinds of fakes in the rural market. The look-alikes sport a colour scheme that resembles a popular brand, but the brand name is totally different, for example, Shagun for Lifebuoy and Lalita Amla for Dabur Amla. The second category are the spell-alikes where you will have a `Viggo' for a `Vicco' or a `Pomes' for a `Ponds' and the packaging looks similar. The third variety are the exact duplicates which carry the name and address of the genuine company, but the product inside is spurious.

The colour of the fake 'whisky' liquid is slightly paler than the genuine whisky. The labels on the bottles, although virtually identical are slightly lighter in print quality on the fake item. The bottle shapes and caps are virtually identical but the levels to which the bottles are filled is different in the fake item to that of the genuine item.

STRATEGIES TO COUNTER SPURIOUS BRANDS

1. Setting up a special task force:

Company can set up an alert task to curb the menace of duplicate manufacturers, offering incentives to informers. For example, Coke has been conducting raids against such manufacturers. To counter the problem, it has put into place an elaborate system. It has 48 consumer response coordinators across the country who works with their teams and redress consumer complaints directly, including overcharging and spurious bottling. Besides, it has a large network of route salesman who has a one-to-one relationship with the retailers on their beat and keep their ears to the ground. When they spot suspicious activity, they inform company officials. So though it is impossible to stop counterfeiters totally, it is possible to minimize the damage they cause.

2. Upgrading packaging:

Constant upgrading of packaging makes it difficult for manufacturers of counterfeits to replicate products. Dabur is making its packaging more sophisticated and capital-intensive to foil counterfeits. In 1999, 67 percent of the sales of its Dabur Lal Dant Manjan were eaten into because its plastic blow-moulded container was easy to duplicate. Now it has come up with premium four-colour shrink sleeve packaging, which has a grainy texture and water bubbles, making it difficult to replicate. This resulted in sales growth of 12 percent for the company. Daburs popular Amla Hair Oil too has been facing an increase in counterfeits during the past year-and-a-half, and the company is trying to find a solution to the problem.

3. Better rural distribution network:

In order to tackle spurious brands, increasing their presence in rural markets is more important for marketers than legal action. A better rural distribution network will force manufacturers of fake products to flee the scene. Colgate, for instance, has such high rural penetration that fakes are hardly to be found. In fact, the MART study suggests that it is the demand-supply gap that fuels the problem in this sector. Distributors appointed by companies stick to the villages closest to their town, while counterfeit products are serviced by mobile distributors who service tiny shops and paanwallas, on cycles. Besides, in some seasons fake products reach retailers well before the genuine brand can. For instance, during summer, fakes abound in cold drinks and talcum powder, while in winter its cold cream and petroleum jelly (Vaseline).

4. The perils of going small:

Another interesting observation is FMCG counterfeits only occur in the smallest size of packaging. In the rural segment and slums, the consumers low purchasing power makes sachets of 25 g and 30 g packs popular. And these consumers are duped easily as the quantity is not large enough for them to pay attention to its quality. This is especially so in sachets of shampoos, hair oils, detergents and so on.

Around 50 manufacturers, legal experts and the research company AC Nielsen have come together to form a Brand Protection Committee under the aegis of the Federation of Indian Chambers of Commerce and Industry (FICCI). The Brand Protection Committee has put in place a four-fold strategy, including focusing on the enforcement of laws, publishing the negative economic impact of fake products, taking direct action against illegal manufacturers, traders, wholesalers and retailers, and enhancing communication among the stakeholders.

DUPLICATION IS MORE IN CHOCLATE BRANDS

The rural consumers by looking into the ads of leading chocolate companies unknowingly purchase the fake chocolate brands because of their impulses. Hence, the researcher has conducted a survey in the petty shops in rural areas to find out the fake chocolates available. It has been found out that fake chocolates and toffees are available in more number of petty shops for the leading brands.

What strategies choclate companies can adopt to kill fake brands

Product: Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand.

Pricing: As the rural consumers are bothered about economy pricing the leading chocolate companies can follow the strategy of "penetration pricing"

Promotion: The traditional method of promotions has to be changed by the MNCs and National Companies in attacking the fake products. A portion of the ad budget can be allocated for retailers' margin. Through ad campaigns, the companies can also create awareness among consumers regarding the evils of fake products.

Physical Distribution: Sales professionals of the local region who have familiarity in the local (regional) language can be appointed to look after the sales of rural areas, so that they can easily converse with the retailers and can build goodwill.

MAIN STATES IN INDIA WHICH HAS A MAJOR MARKET FOR SPURIOUS PRODUCTS

Punjab a major market for spurious products:

After Delhi, Punjab has emerged as a major market of spurious and duplicate products in North India. The branded companies are concerned that consumption and production of various duplicate and fake products in the state. Which include FMCG products, medicines, auto-parts, computer software, pesticide and seeds, have already crossed over Rs 1000 crore annually in the state.

Precautions by companies

The companies are now hiring the consultancy firms to track down the markets, which are producing and selling their spurious products. Amritsar, Mandi Gobindgarh and even Chandigarh are on the radar of these companies, Apart from conducting raids on retailers, the consultant firms have come with new technologies to the protect the brands besides offering consumer awareness programmes as a solution to check the menaces.

A large number of small scale units have come up in Punjab which have mastered the art of making 'almost' same products that are being manufactured by big brands in the pharma, auto parts, textile, seeds and other sectors. In fact, the companies are losing 10 to 40 per cent of their market due to the sales of spurious and duplicate products.

At the national level the companies are losing business volume +annually, which include pharmaceutical, auto-parts, software, music,agro-chemicals, liquor and soft drinks.

A team of Tisco raided the premises of a firm in Mandi Gobindgarh, which was selling steel under the name of the company after processing imported scrap from World Trade Centre. Some other companies have also hired agencies to raid the firms in Ludhiana, Amritsar and Jalandhar that were manufacturing spurious auto-parts, sports goods, software and other items.

SPURIOUS DRUGS SPOILS INDIA

The widespread manufacture and sale of spurious drugs in India places every member of the general public at serious risk to their life. According to several reports, out of the approximately Rs19,000 crores worth of business annually in the pharmaceutical sector in India, approximately Rs4,000 crores is on account of spurious drugs alone. Sub-strength spurious drugs such as anti-malarial drugs not only fail to cure but over time, create resistance in the malarial parasite with disastrous consequences for the patient.

Even when spurious drugs do not endanger life, they can leave the patient seriously ill and those with inadequate potency do bigger harm to the society in general. Drug resistance develops when patients consume drugs with inadequate potency forcing them to look for costlier new generation drugs. And these patients could put the entire society at risk by spreading drug resistance. Unlike other cases where the consumer knows his intent, the spurious drug industry thrives on consumers' ignorance, lack of stiff penalty for indulging in such activity and finally on lax regulatory system. Packaging is so nearly perfect that distinguishing a spurious drug from a genuine one is almost impossible as the fake makers are investing nearly 20 percent of the total investment in packaging.

The consequences are not restricted to consumers or the patients alone. With a market share of nearly 20 per cent of the total drug market in India. The spurious drug industry's thirst for more is clear to see. It has already set its eye on the export market and succeeded in taking spurious drugs beyond our shores. Many are sent overseas, too especially to the states of the erstwhile Soviet Union. Several people have been arrested while trying to smuggle out spurious drugs in bulk to these countries. Africa and Latin America have taken cognizance of the increased export of spurious/sub-standard drugs from India and have started complaining about it. And worse, nearly 3-5 per cent of the drugs landing in the U.S. are spurious. The U.S. has already put India in the 301 watch list threat some months ago. If implemented it would totally ban export of drugs from India and sound the death knell for the Indian drug industry.

Punjab, Haryana, Himachal Pradesh, Delhi, Uttar Pradesh, Bihar, Gujrat and to some extent Madhya Pradesh have the bulk of spurious drug manufacturing units. In UP, the major sale of spurious drugs is in Agra, Lucknow and Varanasi. The Indian pharma industry, including those manufacturing fakes and spurious drugs, is growing at the rate of about 20 per cent annually, which means that every year the chances of your buying a medicine that can do more harm than good (as some even contain toxic material) are also rising proportionately. Increasing pressure of a powerful industry lobby on the government to allow certain drugs and cough preparations as OTC and the government's move to classify a set of ayurvedic preparations as food supplements may add a new dimension to the problem of spurious and substandard drugs in future. By permitting drugs for minor ailments as OTC and allowing them to be sold by stores other than medical shops, monitoring of their safety and efficacy will be almost impossible for state drug authorities just because of the huge number of such stores in each state

In India, drug pirating is made possible by the existed patents regime. These laws offered protection only for manufacturing processes and not for the products themselves. Besides, protection for process was also available for a period of seven years, unlike in the West, where patent protection is for a period of 20 years. As a result, under existing Indian patent laws, Indian drug companies were well within their rights to reverse-engineer well-known brands and sell them as their creation. Significantly, drug piracy of this kind is reduced. When India and many other developing countries extended process patents to products too under the World Trade Organization. In view of this development, some Indian drug companies are already moving away from the manufacture of generics to the development of new drugs through research and development.

Unfortunately a very big market of spurious drugs is flourishing in our country. Guilty people who play with the lives of millions are rarely brought to books. It is unfortunate that no action is taken against them....The penalties and provisions existing under the Drugs and Cosmetics Act, 1940 are ineffective. One of the reasons for the existing penalties not being effective is that the manufacture and sale of spurious drugs is primarily a clandestine activity, which is showing increasing involvement of organized crime in recent years. Besides, offenders are able to easily obtain bail, as the offences are non-cognizable and bailable under the existing provisions of the Act. The offenders remain on bail due to delay in disposal of cases for manufacture and sale of adulterated and spurious drugs.HEALTH HAZARDS DUE TO SPURIOUS PRODUCTS

Most of the products copied are top-selling brands and consumers could be seriously affected while consuming low quality adulterated products, particularly in the food and drug categories. These are usually manufactured under unhygienic conditions and without proper technical supervision.

The dangers of counterfeiting are widespread. Counterfeit products are potentially hazardous. Acts of counterfeiting can and do create severe public health risks and safety hazards, besides economic harm.

1. There is ample evidence of people being injured or made seriously ill - and in some cases dying - after consuming or using a fake product.

2. Illegal manufacturers copy the product from start to finish and sell it as the original. Many of these do not contain the required ingredients and such cosmetics and skin care products may contain harmful and toxic chemicals which can cause serious skin and body aliments that can lead to infection, rashes and allergies.

3. Spurious shampoos have even been know to cause hair loss and balding.

4. Counterfeit products, medicines, cosmetics, foods products and beverages can be dangerous and lethal to unsuspecting consumers.5. A closer inspection at some of the counterfeit medicines available in the market would reveal that ingredients like sugar, chalk powder, wheat flour, paste, fine sand, limestone powder etc are used to make the spurious drugs. Many of these kinds of medicines may be relatively harmless (although there can be some serious side effects) and have no medicinal or curative value as these ingredients are carefully chosen by the illegal manufacturers so that they do not have any serious negative effects and do not show up prominently during clinical tests.

6. However all fake drugs are not made this way. Many are produced using some of the same chemicals that are used in the original product.

7. However the dosage, quality and quantity of the ingredient or chemicals are not checked and upon consuming the medicine a person may suffer anything from a high fever, nausea and sickness to death.

8. Another reason to be extremely cautious is that it is not only ordinary medicines but life saving drugs (anti-cancer,TB, Aids etc) as well that are being produced this way. The main difference here is that due to the complex nature of the drug and the variety of ingredients used, spurious drug manufactures have been know to use the wrong chemicals to produce their drugs which has resulted in several deaths all across the country. These types of medicines would create more problems for the consumer rather than cure the pre-existing aliment.

LOSS SUFFERED BY THE INDUSTRIES

The FMCG industry in India loses Rs.8000 Crore, which is about 15% of total market size, per year to fake goods manufacturers. Parma Industry in India loses around Rs.4000 Crore i.e. 40% to counterfeiters. Name a product and you will find between 2 and 200 copies of it that compete for customer attention. The government loses Rs.15000 crore and the industry all in all loses Rs.30,000 crore to the counterfeits.

However, the main hidden cost to society comes in the form of the damage to local and particularly national economies caused by trade in counterfeits. Local economies are damaged by the loss of sales of genuine products that could be made by legal traders and national economies lose millions of dollars in unpaid taxes and excise revenue. The AC Nielsen study estimates the Indian government loss on account of tax evasions by unauthorized manufacturers to be around Rs 600 crores.

So, the sale of counterfeit products has far reaching effects. It is no longer a victimless crime that only affects large corporations. Unwary consumers have suffered, a few have died and in many cases the profits from counterfeiting support anti-social activities like trafficking and terrorism. Counterfeiting of goods is plain bad business.

The practice of counterfeiting is illegal. India does have laws protecting Intellectual Property. However, in practice, protection is weak. Fighting counterfeiting requires clear rules on enforcement and trained police, judges and customs officials. It also requires the inclination and the authority to check and seize suspected counterfeits. It thus requires the willingness to put counterfeiters in the dock and out of business as the penalties for counterfeiting is light compared with, for instance dealing in illicit drugs. The need of the hour is an imposition of stiff penalties, even criminal, if required.

1. It is estimated that the annual loss suffered by the industry is more than Rs.2500 crore in maharashtra. whereas the Maharashtra government loses revenue of Rs. 225 crore every year. According to a study conducted by AC Nielsen last year, the government loses on an average 10 per cent on the sales tax, 15 per cent on excise duty and 2 per cent on octroi.2. It is not just the consumers health and safety that get affected by the use of counterfeit products, spurious drugs, cosmetics, beverages and food products. The impact of this dangerous and illegal industry has also had an adverse impact on the consumers pocket as well as that of the economy.

3. Apart from these counterfeit and pass-off products are harming Indias reputation among foreign investors as a good & profitable place to carry on business, it may result in having an adverse impact on foreign investment in India, and hence the Indian economy.

4. Each time one of the original manufacturers discovers that there are cheap copies or imitations of his product available in the market he would attempt to stop the counterfeiters by changing the product, using new and improved tamper-proof packaging, new labels, logos, adopting and using holograms etc.

5. All this translates into more money being spent on the product by the manufacturer and this cost is eventually passed on to the consumer through higher prices.

6. In fact many jobs are lost in India and through out the world as industries cannot compete with the menace of spurious products.

7. Workers are laid off; units are closed down and due to the poor quality of the imitations and look alike brands consumers begin to loose faith in the original brand itself which in turn has a negative affect on the nations economy.

8. As stated before the Indian government has lost around Rs 600 crore on account of tax evasions by such unauthorized manufacturers.

9. According to recent media reports the products that were fair and lovely creams and clinic plus shampoos. There are 113 fair & lovely creams and 38 kinds of clinic plus shampoos.

IMPACT ON PRICES AND THE ECONOMY

It is not just the consumers health and safety that get affected by the use of counterfeit products, spurious drugs, cosmetics and adulterated foods & beverages. The impact of this dangerous and illegal industry has also had an adverse impact on the consumers pocket as well as that of the economy. Apart from these counterfeit and pass-off products are harming Indias reputation among foreign investors as a good & profitable place to carry on business, it may result in having an adverse impact on foreign investment in India, and hence the Indian economy. Each time one of the original manufacturers discovers that there are cheap copies or imitations of his product available in the market he would attempt to thwart the counterfeiters by changing the product, using new and improved tamper-proof packaging, new labels, logos, adopting and using holograms etc. All this translates into more money being spent on the product by the manufacturer and this cost is eventually passed on to the consumer through higher prices. In fact many jobs are lost in India and through out the world as industries cannot compete with the menace of spurious products. Workers are laid off, units are closed down and due to the poor quality of the imitations and look alike brands consumers begin to loose faith in the original brand itself which in turn has a negative affect on the nations economy. As stated before the Indian government has lost around Rs 900 crores on account of tax evasions. Consumers need to be made aware that they are essentially consuming poison instead of food & medicine and these actions by the illegal manufacturers are in fact tantamount to committing murder.COMPANYS INITIATIVESAlmost everyone in the value chain is affected when a brand is attacked.

Consumer - Gets life value, feels cheated and could even risk

his life by consuming spurious goods.

Brand owner - loses profits, brand value and customers.

Government - loses tax revenue and incurs additional

Expenditure on enforcements due to the

Pressure.

Society - The resultant deterioration of culture, breeds

Dishonest behavior.

In rural India, where the incidence of piracy is four times that of urban India, the impact of counterfeits is even more pronounced. However, the consumer is either unaware of or apathetic to the menace. Since spurious goods sold under fake brands physically impact the consumer, a consumer push is needed to act as a necessary catalyst to address the problem1. Hindustan Lever has initiated special tamper-proof packs for its deodorant spray 'AXE', whose nozzle can't be detached from the body while Procter and Gamble uses special labels for its Vicks Vapo Rub which does not peel off even if soaked overnight in water. This makes it difficult for spurious goods makers to imitate.

2. Wockhardt has introduced holographic packaging on the blister pack of its pain management brand, Spasmo Proxyvon, to fight the problem of counterfeiting.

3. Gillette India Limited today along with the crime branch of the Mumbai police, conducted raids on the dealers and retailers of Gillette branded counterfeit and infringing products. The Gillette personal care range shave foam, shave gels, aftershave gels, aftershave splash 4. In addition, Sonata has also launched a national consumer awareness campaign driven through a poster campaign that informs consumers about the guidelines to be followed while purchasing a genuine brand watch.

5. Hindustan Lever and Procter & Gamble are working with FICCI's Mumbai-based Brand Protection Committee (BPC). The BPC tracks down manufacturers and sellers of spurious goods and tries to eliminate these channels by interacting with the Government agencies and judiciary.

6. Most of the spurious products are finding their way in the market due to strong brand pull and lack of reach of genuine Tata Agrico products. Therefore, the first and foremost step taken by Tata Agrico is to extended the reach of distribution network to make the products available to the consumers. Also propose to undertake communication campaigns through this comprehensive distribution network to educate the consumer about the features of genuine Tata Agrico products. Parallely, the brand protection cell also takes action from time to time to deter the supplier of spurious products.

7. P&G's company's troubles began when major changes took place in the Vicks franchise. The company moved from the old Vicks packaging to the Global `Blue' mega branding packaging, the price of Vicks products increased and the company was simultaneously working on a new distribution system. The first of the look-alike brands started appearing in the market. Reports from P&G's field force picked up six pass-off brands - Endo Action, Jet Action, Anadol Action, API Action, Vicas and Vikas cough drops. P&G moved the courts and the infringing products of all six pass-off brands were seized. P&G went in for a store audit research with ORG-MARG to define the exact impact of look-alikes and pass-offs on the Vicks business. It revealed that for every 100 genuine strips of Vicks Action 500 there were 54 look-alike strips in market. Similarly there are seven look-alikes for every 100 genuine Vicks Cough Drops; five look-alikes for every 100 genuine Vicks VapoRub; in total, there are 106 `infringers' on the Vicks franchise. Ariel, Whisper and Shampoos are also affected, but to a smaller extent.

8. Pepsi's experience has been similar. It has had to deal with copycat drinks called Dipsy, Tipsy, Sipsi, Toss Up, Dream Cola, 1UP, Lahar, and so on. The problem peaks in summer, when the consumption of colas and juices zooms. It is easy for manufacturers to set up shop with a bucket, plenty of sugar, artificial flavours, dangerous colours and soda. And of course, these fakes piggyback on the success of the original.Though Pepsi and Coke have dropped prices substantially to make their products the flavour of the masses, spurious products still score because of poor consumer awareness. And fake product manufacturers reap windfalls because there are barely any input costs, no safety standards involved, excise or taxes paid.9. HLL, technology had become so sophisticated now that reproducing logos and packaging with multi-colour scanning machines was easy. HLL regularly makes discreet enquiries, and maintains a system of checks and balances. In the event HLL found a supplier pilfering or selling a pass-off or bogus product, HLL would terminate its contract with the supplier and make it pay for losses incurred. Those HLL products that appealed most to counterfeiters were Fair and Lovely, in the skin care segment, and Clinic Plus Shampoo. The speed in tackling counterfeits and proving the guilt of the offending party was of paramount importance. Some of HLL's products also warn potential counterfeiters of prosecution, ensuring that counterfeiters are actually warned at the start of their dubious activities.

10. Companies are also trying to tackle the problem another way. They are going in for upgraded packaging so that manufacturers of counterfeits find it difficult to replicate their products. Dabur is one of them that are making its packaging more sophisticated and capital-intensive. Its Lal Dant Manjan, at the peak of the problem, had about six-seven per cent of its sales eaten into. When Dabur replaced its Lal Dant Manjan plastic blow moulded container with a premium four-colour shrink sleeve packaging which had a grainy texture and water bubbles, the packaging was difficult to replicate. This resulted in a sales growth of 12 per cent in the original product.Dabur's popular Amla Hair Oil has been facing an increase in counterfeits for the past year-and-a-half and the company is trying to work a way out of it. Though four raids have been conducted in the past six months and the company has replaced its glass bottle with a pet bottle, illegal manufacturing continues. Dabur finds that a subtle difference in packaging such as a gold foil stamping on the label or introducing holograms is not enough for home product consumers, specially the less educated who find it difficult to make out the difference between a genuine and a fake.

11. Coca Cola too is in the process of exploring changes in its packaging. They are trying to create technology to incorporate cert.

Since the problems of brand protection are practical as well as legal, an anti-piracy strategy can be used by company

1. Labelling

Label the products clearly, distinctively and consistently to ensure that consumers can tell the difference between a genuine and a fake, or if need be, to ensure that a court can tell the difference.

2. Identification

A range of means can be employed to monitor and track the sale of goods that infringe the brand-related rights. These include:

engaging private inquiry agents to collect evidence through surveillance and trap purchases;

monitoring high-risk outlets and promotional channels that counterfeiters frequently use to advertise and sell their goods (such as markets, discount stores, classified and trade papers); and

Focusing on identifying the manufacturers and suppliers of counterfeit goods.

However, be aware that privacy and surveillance legislation regulates the gathering and use of some types of evidence.

Enforcement

Once the counterfeiters are identified, the affected company may want to take legal action against them. Using the legal remedies available this can take a variety of forms, from issuing warning letters, to commencing civil proceedings or criminal action through to a variety of options in between. It is also important for the industry to liasion regularly with state and a range of other investigative and enforcement bodies.

Border protection

Since many pirated goods are imported from places where manufacturing costs are cheaper, these enable Customs officers to seize products, at the point of entry, that infringe ones copyright or trade marks. By briefing Customs on genuine and unauthorized products, and regularly updating Customs on relevant information, the prospects of a successful seizure are significantly enhanced.

The opening up of the Indian economy coupled with growing competition and indeed growing consumer awareness, would collectively help to check the dangers of counterfeiting, spurious and pirated products etc. However, to combat the dangers of the piracy or counterfeiting of products etc, we have to learn much more from the experiences and technological developments of others in this field.

GOVERNMENT INITIATIVES

The government has enacted the laws and it is up to the police and other agencies to ensure that the laws are implemented. In fact, it is not the paucity of the laws but the ineffective implementation of the laws, which causes the real problem. The war against spurious goods seems to be intensifying with the Government now mooting an independent authority to initiate action to protect consumers from the menace of counterfeit, fake, spurious and contraband products.

The setting up of an independent authority is a recommendation from the Working Group on counterfeit, fake, spurious and contraband products set up by the Department of Consumer Affairs, which submitted its final report recently.

The Department of Consumer Affairs is already contemplating the setting up of a National Consumer Protection Authority, which would focus on critical areas affecting consumer health and provision of safe drinking water, milk, food and drugs, the report pointed out.

1. Pamphlets, notebook covers and notices are being distributed warning people about the prevalence of spurious products across the villages of Maharashtra, Madhya Pradesh and Gujarat. In an awareness drive, Rural Relations - a consumer relation organisation - is attempting to caution villagers regarding counterfeit products available in the market

2. More people are falling prey to counterfeit products in the rural markets every day. These products dont have a valid address or an ingredients list and are not even registered. There are over 120 duplicate products of Parle-G biscuits, Toothpastes, tea, hair oil and face-creams have their counterfeits too. People opt for fakes as they come cheap. Government tries to inform people about the hazards of these products. Government wants people to spend more and purchase better products. This drive is not to endorse any brand. They go around introducing themselves as village developers and targeting segments armed with pamphlets in local languages which have logos cautioning people regarding counterfeit products. One way they have devised of getting through to the people is their children. People listen to what children say in small villages. Government will educate secondary school students by distributing among them notebook covers with information on them. The drive was kicked off six months across Maharashtra, Madhya Pradesh and Gujarat and plan to extend the drive in as many villages. It has chalked out 4,000 villages in Maharashtra with a population between 2,000 and 10,000 and also wanted to cover a village with around 350 families.

BASIC PRECAUTIONS TO BE TAKEN BY CONSUMERS The whole exercise of protecting brands would remain futile unless the consumer is kept in mind. Corporate spend huge sums on advertising and protecting brands without a thought for consumers who by choice have brand loyalty. There is no doubt that the consumers also need to be cautious when buying products. Counterfeiting of products is rampant and companies must change their policy to include redressed mechanisms for unsuspecting consumers who have been cheated.

Consumers have to come together and realize that some prudence and caution on their part can long way in countering this menace. Some basic and simple measures that can be adopted by consumers all across the country are 1. Make sure consumers buy all your products from a reputed shop or establishment.

2. Try to stop eating foods from roadside vendors, as many of them do not follow safety and hygiene standards while preparing their food.

3. Always check the labels of all products thoroughly. You should be on the look out for badly printed labels, absence of the label itself or lack of details of the medicine, faulty sealing and differences in the colour of the packing.

4. While buying medicines you, the consumer should always look for the batch number, manufacturing date, expiry date, manufacturing license number, manufacturer's name/address etc on the pack.

5. With respect to cosmetics, skin and beauty products, it is necessary look out for any extraneous matter in liquid preparations, lumps in creams or ointments and as always, check the labels and read the list of ingredients carefully.

6. Always insist on asking for a bill / receipt or cash memo for all products that you may purchase. This will be especially useful if & when you need to show proof of your purchase.

7. You must always destroy empty packs, bottles and containers of used or leftover medicines to avoid recycling or refilling.

8. Make a complaint or report to the company if it is suspected that original product is being duplicated or imitated. It is important to try and ensure that company will lodge complaints either with the local police or the necessary authorities in the state.

9. If you are aware of any particular mark, logo or hologram the product is supposed to have, please ensure it is present before you buy the product

10. It also important for original manufacturers to make sure that the label looks distinct and consistent so that consumers can tell the difference between a genuine and a fake one.SOME MAJOR FACTS

Rs. 4000 cr. Size of the spurious medicines market in India. Rs.3000 cr. Size of the same in 2005.

35 % of the fake drugs sold worldwide are sourced from India.

20% of medicines sold across India are fake.

60% of these are without active ingredients.

The international scenario too is not very different. It has been estimated that growing faster than the economy, global counterfeiting represents from 8 to 10 percent of world trade.

10 percent of all cosmetics and toiletries worldwide are counterfeit.

An estimated 11.5 percent of the European toy market's annual revenue is lost to counterfeiting.

Consumer electronics counterfeits are estimated as high as 15 percent of trade.

The global piracy rate for IT and software is estimated at 40 percent, amounting to huge loss.

The losses to U.S. business due to counterfeiting are estimated at $200 billion/yr.

Of the counterfeit drugs seized each year, 43 percent contain no active ingredient; 24 percent are of poor quality; 21 percent offer a low content of active ingredient; 7 percent contain the wrong ingredient; and 5 percent have the wrong package.

Counterfeit goods manufactured in some of large manufacturing countries are estimated to exceed US$ 25 billion annually, with the figure growing each year. Alarmingly, many of the counterfeit goods produced in such countries are now being exported world-wide, impacting revenues and profits not only for local companies, but also on their markets internationally. Similarly, developed countries especially USA also provide a range of legal remedies to help brand-owners restrain the counterfeiters from trading off their hard-earned brand reputation.

The Trade Marks Act allows registration to be secured for the distinctive name, devices, labels, colours, words, shapes and even sounds and smells that define one trader's goods or services in the market, thus preventing other people from using them in relation to their products.

The Copyright Act seeks to protect the creator's rights in artistic, musical and literary works (e g computer programs), as well as sound recordings and films, and can therefore be employed to protect various aspects of a product and its marketing, without the need for registration.

The Designs Act allows the visually distinctive shape, configuration or pattern of goods to be protected through registration. However, two-dimensional patterns may be sufficiently protected by copyright without the need for design registration.

The Patents Act can be used to protect new innovations in manufacture that may be important to the unique 'look' of your product.

The Trade Practices Act can be utilized to prevent others from making misleading representations as to the nature of their goods, or from deceiving the public into thinking that a connection exists between their goods and yours. The common-law remedy of passing off is also regularly invoked in a similar fashion. LAWS GOVERNINGFollowing are the laws under which legal action can be taken against manufacturers and sellers of fake products:

1. Indian Penal Code 18602. Drugs and Cosmetics Act, 19403. Prevention of Food Adulteration Act, 19544. Consumer Protection Act, 19865. Bureau of Indian Standards Act, 1986 and6. Trademarks Act, 1999

There are a number of laws dealing with infringement such as the Indian Penal Code 1860, the Trade and Merchandise Marks Act 1958, the Copyrights Act, the Design Act, the MRTP, the Drugs and Cosmetics Act, the Common Law and the Law of Torts. However, certain loopholes exist in law which is often advantageous to and aids the counterfeiter.

Implementing agencies face enormous problems in issuing warrants, arresting the culprits, seizing the goods, storage of seized goods and presenting the evidence in court. The corporate subsequently have to present voluminous evidence in court along with data such as invoices and user data and strong evidence to outwit the extremely intelligent counterfeiter. The process takes too long and is time consuming often leading to destruction of vital evidence.

Punishments are not punitive and sentences are few with most of them escaping jail sentences, which are rarely more than three years. The counterfeiters close shop and move on to another location to escape the law and thus continue counterfeiting.

At a recent national workshop on "Protecting brands a war against counterfeiting'' held in New Delhi by the Brand Protection Committee (BPC) of FICCI, all the stakeholders corporates, Government, judicial luminaries, lawyers and police officials along with representatives of the consumer advocacy groups gathered together to express their concerns and find solutions to combat this problem.THE NECESSARY LEGAL BATTLE Worldwide, one of the most effective ways by which the battle against piracy, counterfeit and spurious products has been fought is through use of legal tools. There are certain legal provisions that would aid the consumer in his fight against this menace. Consumers would have to look at the situation and simply see which of the relevant laws wouldhelp them with respect to their problems.

The Drugs and Cosmetics Act, 1940

It can be used to defend and protect consumers interests. Provisions under this act include punishments & fines for misbranding drugs, confiscating of such drugs (sec 14), prevention of the import of such drugs (sec10) etc. It prohibits the sale of such drugs under section 18. It also provides for the setting up of Central Drugs Laboratory for testing batches of drugs. It also prescribes strict standards that are to be followed by drug manufacturers and importers. It also clearly defines misbranded drug under section 17. Section13 clearly states that whoever contravenes any part of this act will be punishable with imprisonment which may extend to one year, or with fine which may extend to five hundred rupees, or with both. If convicted again of the same offence then, in addition he shall be punishable with imprisonment, which may extend to two years or with fine which may extend to one thousand rupees or both.

Prevention of Food Adulteration Act, 1954

It prohibits the manufacture, sale, etc. of certain food articles. Among others, it states that no person shall manufacture, store, sell or distribute any misbranded food, adulterated food. It states that an article of food shall be deemed to be misbranded if it is an imitation of, or is a substitute for, or resembles in a manner likely to deceive, another article of food, and is not conspicuously labeled so as to indicate its true character, if it is falsely stated to be the product of any place or country, if it is sold by a name which belongs to another article of food, if it is so colored, flavored, coated, powdered or polished as to conceal any damage to the article or to appear of greater value than it really is, if false claims are made for it upon the label or otherwise. It also provides for food inspectors to take samples of any kind of food product and examine it. Penalties can be imposed under section 16 for impose a sentence of imprisonment for a term which shall not be less than three months but which may extend to two years, and with fine which shall not be less than five hundred rupees.

The Trade Marks Act, 1999

This Act provides for registration of trade-marks, prevention of the use of fraudulent marks and Protection of registered trade-marks among others. The trade mark Act also allows registration to be secured for distinct names, devices, labels, words, colours, shapes, sounds that define and distinguish one manufacturers goods or services from anothers in the market. This helps in preventing anyone else from copying or imitating their products. It provides for punishments under section 103 for Applying False Trade Marks, Trade Descriptions, etc punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees. Under section 104 of the act there is a penalty for selling goods or providing services to which false trade mark or false trade description is applied. The punishment for this is the same as above. Such counterfeiters can also be punished by an enhanced Penalty on second or subsequent conviction under sec 105 of the act.

Indian Copyright Act, 1957 In cases of piracy, illegal duplication & counterfeiting of works such as computer programs, software, computer databases, dramatic, artistic and musical works, cinematographic films and sound recordings one can always find relief under the copyright act. The copyright act offers legal protection to the original creators of all these products or works. It prevents anyone else from reproducing the product, distributing the product or selling the product, at least not without the original creators prior permission. Under section 14 of this Act, it is illegal to make or distribute copies of copyrighted software without proper or specific authorization. A civil and criminal action may be instituted for injunction, actual damages (including infringer's profits) or statutory damages per infringement etc. Section 63 B, stipulates a minimum jail term of 7 days which can be extended up to 3 years. The Act further states fines ranging from Rs. 50,000 to 2, 00,000.Consumer Protection Act, 1986

Under the Consumer Protection Act, 1986 one can approach the consumer courts under the heading of Unfair trade Practices which means any unfair or deceptive method/practice adopted by a seller for the purpose of promoting the sale, use or supply of any goods or for the provision of any service. Such unfair trade practice will include: Making false or misleading representations that goods/services are of a particular standard/quality/quantity/grade, Representing that goods/ services have characteristics/ uses/ accessories/ sponsorships etc. which they do not have or giving any guarantee as to performance/efficacy that is not based on an adequate or proper test, Misleading the public concerning the price at which products & services are sold; Advertising the supply of goods/services at bargain prices, when in fact they are not meant to be offered for sale at such bargain prices; Offering of gifts, prize with the intention of not providing them as offered or if the price of the gift/prize is actually included fully or partly in the item sold, non compliance of product safety standard, Hoarding or destruction of goods. If any product sold in the market contains a defect a consumer can approach the consumer court for redressal. Defect means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract which express or implied or as is claimed by the trader in any manner whatsoever, in relation to any goods.

The Bureau of Indian Standards notifies the quality standards for various items including consumer goods. There are also penalties for those who use the ISI standard mark without obtaining the requisite license.

FICCIS INITIATIVE TO FIGHT SPURIOUS PRODUCTS Recently the Brand Protection Committee (BPC) was instituted under the auspices of Federation of Indian Chamber of Commerce and Industry (FICCI), with the intention of facilitating trademark protection in India and protecting the interests of consumer and industry interests against the menace of pass-off and counterfeit products. Many companies have joined together to take up this battle against the counterfeiters all across the country. The fight against spurious products, counterfeit and pass-off/look-alike products in many categories of Fast Moving Consumer Goods (FMCG), Drugs, Textile, and Automobiles & Lubricants. BPC comprises of many consumer non-durable companies such as Hindustan Lever, Colgate, Proctor & Gamble, Marico, Dabur, Pepsi, Glaxo Smith Kline and many others. Besides, automobile and lubricant companies such as IOCL, HPCL BPCL, Telco, Castro and Bajaj Auto are also associated with it. More raids and seizures are being carried out against counterfeit manufacturers in urban as well as rural areas. BPCs mission is to work co-operatively with the Central & State Government authorities, industry and trade associations, individual companies and other organizations including consumer protection groups to eliminate counterfeit and pass-off products. BPC has four-fold Strategy to counter the menace of counterfeit and pass-off products: Advocate more effective enforcement of existing Laws and Rules.

Measure and publicize negative impact of Counterfeit.

Open communication channels between stakeholders to generate awareness and stimulate action against counterfeit/pass-off products.

Take action against infringers via Regulatory Authorities.

RECENT BPC ACTIVITIES

BPC has set in motion the process of setting up special IPR Cells in the Police in the States of Maharashtra and Madhya Pradesh. It has even initiated Common Enforcement Raids and worked with enforcement authorities to raid high infringing markets in Delhi, Ahmedabad, Bangalore, Mumbai and Indore. It creates immense media and industry awareness on parallel industry of counterfeits and pass-off products. It has made several representations to the Government. Representations have also been made to the Law Ministry for changing /amending Trade Mark Laws currently not in favour of genuine Brands Manufacturers. Lately, it has launched a website to increase awareness in general public.

Summary of Report of the Brand Protection Committee / FICCI The Brand Protection Committee (BPC) has been set up under Federation of Indian Chamber of Commerce and Industry (FICCI) to fight spurious products viz. counterfeit and pass-off or look-alike products in select categories of consumer goods, including OTC Drugs (e.g. Household Medicines)and Cosmetics. In the nearly two years since BPC has been in existence (from August 2000), it has made substantial progress in its primary objective of fighting spurious products.

Anti-counterfeit Measures and Results

During this period BPC has set in motion the process of setting up special IPR Cells in the Police in two states. BPC has initiated Common Enforcement Actions (Raids etc.) seizing over Rs. 15 crores of counterfeits and pass-offs in the last year and a half. Worked with Enforcement Authorities to raid high infringing markets in Delhi, Ahmedabad, Bangalore, Mumbai and Indore. By conducting a National workshop, it has created immense media and industry awareness on parallel industry of counterfeits and pass off products. The National workshop had active participation from the consumer activists, Govt. and Police authorities. It has made sustained efforts all through out to highlight to the Government at both state and central level the magnitude of the problem. Repeated studies by AC Neilsen in select categories of consumer goods have given estimates of the extent of the problem, which has helped when making representations to the Govt. The Nielsen study indicates that turnover of Spurious products in packaged consumer goods industry is around Rs. 2600 crores with Govt. losing revenues of Rs.900 crores in excise duty, sales tax and octroi.

Representations to the Govt

BPC has made several representations to the Govt. A dialogue with the Revenue Secretary has been initiated to propose the need for suitable amendments in the central excise Act to curb the menace of counterfeits and pass offs. Representations have also been made to the Law Ministry for changing/amending Trade Mark laws currently not in favor of manufacturers of genuine Brand's owners. Setting up of special IPR Policing Cells s in the states of Maharashtra and Madhya Pradeshhas been initiated. The FDA, Excise, Sales Tax and Police are all being coordinated via the special cell/nodal agency to take comprehensive action against the infringers. Meeting with Maharashtra. Sustained efforts from BPC for better enforcement of laws by regulatory authority ultimately succeeded in setting up a regular review mechanism. In a meeting with the Industry, the Food and Drugs Administration in the state of Maharashtra, agreed to set up a review mechanism whereby BPC and top FDA officials will meet on monthly basis and exchange information on the spurious Drug and Cosmetic products in the markets. Based on the information from the Industry, FDA is initiating enforcement action. This is a very positive development as Maharashtra FDA now recognizes that the issue on Spurious Drugs and Cosmetics is rampant and needs to be resolved.

NASSCOM activities

In fact The National Association of Software and Services Companies (Nasscom) has even established a special Anti-Piracy (Hotline) - 011-301 5419at New Delhi and a toll free number - 1600 334455. The initiatives taken by Nasscom against piracy have helped in reducing software piracy in India from a high 89 percent in 1993 to 60 percent during 1999.Of course a lot more needs to be done if we are to succeed in this crusade against piracy & counterfeit products.

ADULTERATED PRODUCTS - A DANGEROUS MIX The nature, type, quality & quantity of food play an important role in the maintenance of health and well being of all individuals. Food safety is an essential public health issue for all consumers. However many consumers in India & other developing countries, are often exposed to willful adulteration of their food stock and supply. Adulteration of milk and milk products, spices, edible oils, and even alcohol & beverages and the use of colours to mask product quality to cheat the consumer are quite common. This can lead to health hazards and to financial losses for consumers, families, communities, and countries. Apart form this, such episodes invoke public anger as it violates public trust in the integrity and safety of the food supply.

"Adulteration" is a legal term meaning that a food product fails to meet federal or state standards. Adulteration usually refers to noncompliance with health or safety standards as determined, in the United States, by the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).

What is Adulterant

Adulterants are chemical substances which should not be contained within other substances (eg. food, beverages, fuels or pesticides) for legal or other reasons. Adulterants may be intentionally added to substances to reduce manufacturing costs, or for some deceptive or malicious purpose. Adulterants may also be accidentally or unknowingly introduced into substances. The addition of adulterants is called adulteration. In food and beveragesDefinition of Adulterated Food

The Federal Food, Drug, and Cosmetic (FD&C) Act (1938) provides that food is "adulterated" if it meets any one of the following criteria:

1. It bears or contains any "poisonous or deleterious substance" which may render it injurious to health.

2. It bears or contains any added poisonous or added deleterious substance (other than a pesticide residue, food additive, color additive, or new animal drug, which is covered by separate provisions) that is unsafe.

3. Its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or

4. It bears or contains a pesticide chemical residue that is unsafe. (Note: The Environmental Protection Agency [EPA] establishes tolerances for pesticide residues in foods, which are enforced by the FDA.).

ADULTERATED FOODAccording to the Prevention of Food Adulteration Act, 1954 an article of food shall be regarded as adulterated -

If the article sold by a vendor is not of the nature, substance or quality demanded by the purchaser or which it purports to be;

If the article contains any substance affecting its quality or of it is so processed as to injuriously affect its nature, substance or quality;

If any inferior or cheaper substance has been substituted wholly or partly for the article, or any constituent of the article has been wholly or partly abstracted from it, so as to affecting its quality or of it is so processed as to injuriously affect its nature, substance or quality;

If the article had been prepared, packed or kept under unsanitary conditions whereby it has become contaminated or injurious to health;

If the article consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or being insect-infested, or is otherwise unfit for human consumption;

If the article is obtained from a diseased animal;

If the article contains any poisonous or other ingredient which is injurious to health;

If the container of the article is composed of any poisonous or deleterious substance which renders its contents injurious to health;

If the article contains any prohibited colouring matter or preservative, or any permitted colouring matter or preservative in excess of the prescribed limits;

If the quality or purity of the article falls below the prescribed standard, or its constituents are present in proportions other standard, or its constituents are present in proportions other than those prescribed, whether or not rendering it injurious to health.

Simply put, any substance that degrades or lowers the quality of food is an adulteration.

When you see different types of sweets and edible products with bright coloring, which are meant to make the food item appear more appetizing, it could contain dangerous and toxic dyes. Many of these dyes & colorings are banned as they cause serious health hazards and may also contain carcinogens which may cause cancer in the long run.

It now common for Milk vendors in many parts of the country to add water in their milk. Most stomach disorder cases among children are due to adulterated & contaminated milk. Caustic soda and chemicals, such as hydrogen peroxide were being used to increase the shelf-life of milk. Dairy owners also use harmful chemicals such as zentamycin in the milk.

Soft drinks have also become a major target for adulterators across many parts of the country. They prepare their own cocktail and simply pour it into an old bottle and sell it. Most consumers are not able to tell the difference and they purchase the product. This is especially rampant in the rural parts of the country where consumers are only semi-literate at most and often fall victim to the adulterators. Colas, Biscuits, Chips, Snacks etc are all being affected by this menace. Most branded products in India have become a victim of this dangerous menace. According to a study by two NGOs the adulteration levels in India are at around 10 percent.

In developing countries like India where a large number of people eat and consume meals cooked by street vendors one can never be sure of the quality of ingredients used in the preparations. As a result many are made using dangerous and cheap ingredients that result in a number of individuals falling ill and being taken to hospital.

Adulterated Food & Beverages & Alcohol

Adulterated foods, beverages & alcohol have been known to cause sickness and even death to those who consume it. Most affected here are young children who consume large quantities of beverages and foods without understanding the consequences. Recently a large number of children had suffered from food poisoning from food provided under the mid-day scheme. The causes are usually food prepared under unhygienic conditions and poor quality of ingredients used to make the food. Adulteration can lead to deficiencies as dilution of the food item or milk will naturally result in reduction of calcium, protein, fat and vitamins which are necessary for all growing children and adults.

Adulteration in food products with some following examples

1.

Name of ProductCoffee

UsesThis is especially a drinking substance. It is used in candies, pastries and ice- creams and is also known to be a stimulating agent. The coffee pulp is used as fodder for animals.

Chemical SubstanceIt has mainly two Alkaloids, namely Caffeine and Caffetonic. The presence of caffeine in coffee is from 0.75 % to 2.5%. An aromatic oil named Caffetol, gives the coffee its flavour.

Possible AdulterationTamarind seeds

Effects of AdulterationJoint Aches and Diarrhoea

2.

Name of product Tea

usesThis is used as a stimulant and astringent.

Chemical

substanceTea consists of necessary oils, alkaloids and polyphenol. The aroma of tea is due to Theyol, an Ethereal Oil. It has 2.5% Theon, 13.8% Polyphenol, essential oils, Vitamin-B complex and Nicotinic Acid.

Possible AdulterationPoor quality tea, coloured tea, other leaves apart from tea leaves, iron powder and black lentil powder

Effects of AdulterationStomach and Liver diseases

3.

Name of product Sugar

usesThis is the main supplier of energy. It is used in drinks, chocolate, bakery, sweets, ice-creams etc.

Chemical

substanceThis is a carbohydrate. The main substances present in it are hydrogen, carbon and oxygen. Sugar is a sweet and crystalline substance.

Possible AdulterationThis is a carbohydrate. The main substances present in it are hydrogen, carbon and oxygen. Sugar is a sweet and crystalline substance.

Effects of AdulterationStomach diseases

Some More examples of adulteration: Mogdad coffee, whose seeds have been used as an adulterant for coffee.

Roasted chicory roots were used for the same purpose, starting during the Napoleonic era in France (and still is a moderately popular additive there for cheaper coffee).

Roasted ground peas, beans, or wheat used to adulterate roasted chicory.

Diethylene glycol, used by some winemakers to fake sweet wines.

Oleomargarine or lard, added to butter.

Rapeseed oil, commonly added to sunflower oil and soybean oil, brassic asterol being a marker of its presence.

Rye flour, corn meal or potato starch used to dilute more expensive flours; alum is also added to disguise usage of lower-quality flour.

Apple jellies were substituted for more expensive fruit jellies, with added colorant and sometimes even little pieces of wood that simulated strawberry seeds.

Artificial colorants, often toxic - eg. copper, zinc, or indigo-based green dyes added to absinthe.

Sudan I yellow color, added to chili powder.

Water, for diluting milk and beer and hard drinks.

Lower-quality black tea disguised as higher class.

Starch, added to sausages.

Cutting agents are often used to adulterate (or "cut") illicit drugs, for example shoe polish in solid cannabis.

Urea and other non-protein nitrogen sources added to protein products in order to inflate crude protein content measurements.

Powdered beechnut husk aromatized with cinnamic aldehyde may be marketed as powdered cinnamon.

High fructose corn syrup can be used to adulterate honey.

Economic Adulteration

A food is adulterated if it omits a valuable constituent or substitutes another substance, in whole or in part, for a valuable constituent (for instance, olive oil diluted with tea tree oil); conceals damage or inferiority in any manner (such as fresh fruit with food coloring on its surface to conceal defects); or any substance has been added to it or packed with it to increase its bulk or weight, reduce its quality or strength, or make it appear bigger or of greater value than it is (for example, scallops to which water has been added to make them heavier).

Microbiological Contamination and Adulteration

The fact that a food is contaminated with pathogens (harmful microorganisms such as bacteria, viruses, or protozoa) may, or may not, render it adulterated. Generally, for ready-to-eat foods, the presence of pathogens will render the food adulterated. For example, the presence of Salmonella on fresh fruits or vegetables or in ready-to-eat meat or poultry products (such as luncheon meats) will render those products adulterated.

Precautions

In order to win the crusade against such adulterated foods and beverages the existing laws and standards need to be vigorously enforced by the relevant authorities and harsher penalties need to be introduced in order to deter such individuals in the future. Food standards for commodities like cereals, milk products edible oils, fruits and vegetables need to strictly prioritized. The country needs to follow international food standard such as the Codex standards that aim to ensure strict standards for food safety.. Also the FDAs & Food testing laboratories all across the country need to be given more funds to carry out and perform their functions.

FOOD LAWS

The details of various food laws in operation in India are as under: -

1. Prevention of Food Adulteration Act (Ministry of Health) The Act lays down specifications for various food products and is mandatory. The Ministry of Health in 1995 had constituted a Task Force under the chairmanship of Shri E.S. Venkataramaiah, Chief Justice of India (retired). The Task Force recommended that there should be emphasis on good manufacturing practices instead of detection of adulteration and prosecution. It also express concern about lack of laboratory equipments and quantified persons. In addition it also suggested that the name of PFA Act be changed to Food Safety Act.

2. Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development) This Act is commonly known as AGMARK and is voluntary. The Act lays down the specifications for various agricultural commodities including some processed foods.

3. Laws being operated by Bureau of Indian Standards (BIS) BIS is the largest body for formulating standards for various food items. These standards are also voluntary.

4. Essential Commodities Act A number of quality control orders have been issued under Essential Commodities Act such as Meat Product Order and Vegetable Oils Control Order. These orders are mandatory and primarily meant for regulating the hygienic conditions. They need to be clubbed under one order which may call Food Products Order.

HARMONIZATION OF FOOD LAWSThe review of multiple laws is necessary to have a uniform and logical approach for regulating the quality of food. The following action is being taken by various Ministries:-

1. The Ministry of Civil Supplies & Consumer Affairs has brought out a paper for consideration of Committee of Secretaries (COS). The paper recommends that BIS should formulate standards for all food items in the country. This will be a major step towards harmonization of food laws and is still under consideration of COS for finalization.

2. The Task Force constituted by the Prime Minister under the chairmanship