As the Imaging Consumables Coalition of Europe, Middle East and Africa (ICCE) warns that the industry is under threat from a €1.6 billion market in counterfeit imaging supplies, our panel of experts assesses the scale of the problem and offers advice on how to beat the counterfeiters.
How big an issue is the counterfeit supplies market?
Andrew Hall, Marketing Manager, OKI Systems (UK) Ltd: “The imaging supplies industry is a signifiant contributor to the EU economy, generating some €41 billion and employing 100,000 people. It’s estimated that counterfeit product accounts for nearly 8% of revenues generated by imaging supplies sales in EMEA, rising to 50% in some Middle Eastern countries.”
Nigel Allen, Marketing Director, KYOCERA Document Solutions UK: “The counterfeit market is vast, both here in the UK and in the rest of Europe, and it’s only getting bigger. What we’ve observed is a concerning rise in the scale of the problem, particularly over the last six months, based on the number of fraudulent goods we have seized and investigated in that period.”
Kevin Weaver, Vice President,Brand Protection, Xerox: “The US-based Imaging Supplies Coalition (ISC) estimates that the total impact of counterfeiting on the imaging industry is $3 billion. A recent study by the European Union Intellectual Property Offie (2016) indicated that the total world trade in counterfeit and pirated goods (all industries) represents 2.5% of world trade, i.e. up to $461 billion. This demonstrates the size and seriousness of the issue facing all industries.”
Mark Ash, Head of Print, Samsung: “Counterfeit supplies have a detrimental impact on multiple sectors, with print manufacturers, channel partners, customers and even tax payers being inadvertently affected. In terms of how many counterfeit products are actually out there, the market share is very diffiult to measure, but ICCE reports that fake products have a share of around 8% in EMEA, and the OECD reports a market share of 5%.” Have you been affected by the illegal counterfeiting of your products?
Andrew Hall: “Yes. This is a continuous problem for Original Equipment Manufacturers. OKI operates an ongoing programme of anti-counterfeit activities and is also the founding member of ICCE.”
Nigel Allen: “We are currently investigating a number of counterfeiting cases. Last year we seized hundreds of thousands of units, worth in excess of €10m. However, since April 2016, we’ve seized over €5m worth of fraudulent goods, suggesting that counterfeit goods are becoming more prevalent across Europe.”
Kevin Weaver: “Yes, and we have identifid and taken action against organisations and individuals dealing in such goods – in both the manufacture and distribution of such items. We work with other OEMs in the industry; we share intelligence and we train government offiials, police forces and other enforcement agencies. We have raided manufacturing plants and warehouses around the globe, in South America, the Middle East, Africa and Asia.”
Mark Ash: “At Samsung, we haven’t found fake products in Europe for the last two years, but that doesn’t necessarily mean they’re not out there. We have been affected by patent infringements in the past for consumable print products, which we call ‘new built clones’, but we’re making strides in protecting our intellectual property and our customers’ print devices from potentially damaging products.”
What are the biggest problems associated with using counterfeit supplies?
Andrew Hall: “For the end-user, counterfeit imaging supplies are proven to cause downtime and damage to printing devices. However, ultimately counterfeiting is illegal and is thought to be connected with more sinister criminal activities.”
Nigel Allen: “Counterfeit imaging supplies are often dangerous, environmentally unfriendly and cheat consumers of the quality they are entitled to expect from branded consumables. The counterfeiters will be involved in areas such as people smuggling, drug traffiking and organised crime.
Talking with our customers and resellers, the most common complaints we hear include streaky grey backgrounds, drop off, uneven print quality and even ghosting on the page (bits of the previous page making an unwelcome appearance).
“More serious, and costly, is the risk to devices. Non-genuine toner or ink can damage good-quality printing products and reduce the overall yield of a machine. This means that the total cost of ownership goes up, offsetting any short-term benefis from cheap toner. In addition, the manufacturer’s warranty could be invalidated, meaning that if a machine breaks, which it may well do if counterfeit consumables are used, there’s no comeback.
“By purchasing counterfeit goods, you could unwittingly be supporting organised crime and traffiking gangs, as the two are closely linked.”
Kevin Weaver: “Counterfeiting and piracy generally cheat consumers of the quality they are entitled to expect. The impact can be seen across different stages of the supply chain – for the end customer, in potential damage to hardware through the use of such products (normally unwittingly purchased) and invalidation of the hardware warranty; for distribution partners (distributors and resellers), in damage to their reputation from handling and supplying such goods and in potential fiancial and legal issues from supplying such goods; and for the OEM, in damage to brand reputation – the products are marketed as OEM originals, so when things go wrong the brand owner is the immediate focus for blame.”
Mark Ash: “Counterfeit supply manufacturers aren’t leading innovation in the industry, device manufacturers are, and that’s a direct result of the signifiant time and money they invest in R&D.
Counterfeit products and ‘new built clones’ are causing the entry-level market to collapse, with the result that manufacturers are starting to withdraw from that end of the market. This results in less innovative products, which affects the consumer in the long run. What’s more, counterfeit imaging products are not only likely to be sub-standard, they can damage the print device too.”
Deyon Antoine, Product Manager, Toshiba: “The customer is always the party who suffers the most when it comes to counterfeit products. The quality of counterfeit and non-recommended products is never guaranteed. With the potential of damage to a device from cheaper or poorly made materials, users can experience higher levels of downtime and therefore lower productivity. An increase in TCO (Total Cost of Ownership) is common, with consumables likely to need replacing more frequently. Most commonly, users will suffer from a dramatic drop in print quality, with blurry text, smudging and poor colour matching.”
How can we prevent counterfeit products from entering the supply chain?
Andrew Hall: “Ensure supplies are sourced only from authorised OKI distributors/partners.”
Nigel Allen: “Counterfeit products are increasingly hard to spot, so we would advise resellers and customers to be suspicious of consumables that do not have KYOCERA labelling or an unrealistically low price. If in doubt, our team is available to answer any questions or verify suspect products.”
Kevin Weaver: “OEMs invest signifiant amounts of money and time in both product technology (e.g. Xerox introduces printed-memory labels to fiht counterfeiting) and packaging to make it diffiult for the counterfeiters to succeed. This is aimed at limiting the ability of counterfeiters to produce a product.
“Use of product authentication labels and specialised packaging is the next level of defence. Increasing awareness of what a customer should expect in a genuine product and ensuring that purchases are only made through authorised channels helps to minimise risk of counterfeit product entering the supply chain.
“Xerox has a website dedicated to brand protection: www.xerox.co.uk/printersupplies/brand-protection/engb.html.”
Mark Ash: “It’s imperative that manufacturers collaborate with customs and border authorities, trading standards organisations and channel partners to share information concerning original and counterfeit products as well as intelligence on suspicious traders.”
What can resellers do to help?
Andrew Hall: “Resellers should source only from an authorised channel and report any suspicious activity/pricing.”
Nigel Allen: “The general rule that resellers should stick to is ‘if it’s too good to be true, then it probably is a counterfeit product’. We fid that our partners are often aware of the problem but some don’t realise how widespread it is. Many of the cases we’re currently investigating were originally flgged up by our partner community, and we’d ask all partners to contact our team directly if they have any suspicions.”
Kevin Weaver: “Avoid the temptation of the special/cheap price and buy only from OEM authorised distributors. Some counterfeit practices, such as product blending – the mixing of counterfeit products with OEM originals, means unsuspecting resellers can be fooled into believing their shipment is safe. If it’s cheap and not from the authorised channel then it should be treated as suspect and avoided.”
Mark Ash: “Resellers should educate their customers on how to spot counterfeit products and the detrimental effect they can have. They should encourage the sharing of information with their customers, so that any intelligence on suspected fake supplies can be relayed to the manufacturer and appropriate action taken.”
It’s widely accepted that counterfeit products are hard to spot, so what should customers look out for and how can they verify suspect products?
Andrew Hall: “With effect from October 2015, OKI Europe’s consumables division introduced new security measures to assist customers in identifying counterfeit imaging supplies. Individual product packaging for OKI’s original toner cartridges and ribbons incorporates a new hologram label so that users can check the authenticity of their consumables.
“The key visual security features are a series of alternating images designed to meet specifi criteria when the hologram label is rotated. If the images do not meet the criteria, the user can seek further assistance on OKI Europe’s website by entering a unique 12-digit code which is incorporated into the hologram label to confim the authenticity of the product.”
Nigel Allen: “Tell-tale signs include the lack of a hologram on the toner cartridge; serial numbers that are inconsistent; badly printed packaging; as well as a price that’s too good to be true.”
Kevin Weaver: “As with resellers, customers should only buy through OEM authorised resellers/routes. Xerox supplies include an authentication label, which the customer can check for authenticity.
“If there is any doubt that the product is genuine it should be returned to the reseller for a replacement and contact made with Xerox identifying the product and reseller details. We also provide a video explaining the challenges of identifying counterfeits, the risks associated with these products and how to avoid them (http://www.xerox. com/printer-supplies/avoid_counterfeit_ supplies_jan2015_video/enus.html).”
Mark Ash: “It depends on the manufacturer, but our customers can verify genuine products by checking the label on the cartridge box. Label colours should change when seen from different angles, and the embossed characters have a distinctive texture.”
Deyon Antoine: “Counterfeit products are becoming ever harder to spot. We’re continually trying to ensure that users receive genuine Toshiba products.
Consumables for our new e-BRIDGE Next devices and barcode and label printers are now chipped to help with the prevention of counterfeit materials. These chips enable a device to validate that the consumable is genuine Toshiba product.
Further information, such as the location of manufacture and the properties of the consumable, can be shared, enabling a more accurate and effective use of that consumable.
“Toshiba devices now identify when non-offiial consumables have been inserted and inform the user through an onscreen notifiation. This can help eradicate the use of counterfeit products that can ultimately damage a user’s device.”