production phase such as employing sweatshop labor, engaging in environmentally unsound manufacturing processes and using
inferior-grade materials,” said UNODC.
Trade in counterfeits has seen many
countries in Africa pay dearly. They have
been unable to meet their tax revenue targets impacting negatively on their development and recurrent expenditure budgets.
UNODC said the tax evasion and
competitive pricing “end up undermin-
ing the tax base and affect public services
available for all.”
For example, Uganda and Kenya
missed their tax revenue targets in dif-
ferent reporting periods last year. Kenya
collected $4.45 billion for the period be-
tween January and June 2012, which was
$12 million less than the target. Uganda
also collected $985 million between July
and November of the same year against a
target of $1.02 billion.
Despite the enormity of challenges
posed by trade in counterfeits, paint makers in the continent seem to have different
experiences with this problem that has
been blamed for the loss of more than 2.5
million jobs annually globally, according
to International Chamber of Commerce.
However, South Africa paint market
players seem to have had little adverse
experience with counterfeits as some
of the members of South African Paint
Manufacturers Association say their
production process may have locked
out counterfeiters from faking their
brand of products.
The market seem to have few reported
counterfeit cases although some of the paint
manufacturer feel the need for strengthening of the country’s regulatory framework.
Eastern Cape-based Newdens,
which manufactures a wide range of
hardware, candles and beauty products,
said although the company has experienced counterfeiting in some its products, none of its eight paint products
has been counterfeited.
“We have had experience with other
types of products of ours being counterfeited, but not paint” said the company’s
director Richard Boardman.
South Africa’s other leading paint maker
Plascon told Coatings World in an emailed
response that it “uses only top quality
materials and reputable manufacturers in
the production and packaging of its prod-
ucts, which is why it is a market leader.”
“The Plascon process and superlative
quality is difficult to match and thus easy to
differentiate from cheap counterfeit prod-
ucts,” the company reported. “The Plascon
brand is protected by trademark registration
in the countries of Sub-Saran Africa, as well
as in East and West Africa.”
However, another market player in
South Africa, Weatherprufe Coatings,
which produces wide range of high qual-
ity coatings in Western Cape, said both the
paint industry and its leading consumer, the
construction industry should be regulated
to lock out counterfeits from the market.
“The building industry – as well as
the paint industry- is poorly regulated
leaving room for dishonest practices,”
said the company’s technical director
Mark Giddey.
“It is difficult to quantify, but there
are several instances of products being
decanted into specified brands for use on
building projects especially the supply of
inferior products as an “approved equivalent” to a specified paint,” he said.
“The consumers are at the mercy of
advertising and in general very weak technical advice from retail outlets. There is a
strong need for us, the manufacturers, to
educate sales staff better, so that the end
user can make more informed decisions
around product selection,” added Giddey.
Basco Paints in East Africa seems to
have embraced the training strategy in
its war against counterfeits. The company has introduced a training program
on how to use their paint products and
also detect counterfeits.
The company, which has an installed
paint production capacity of two million liters/year with a presence in
Uganda, Rwanda, Ethiopia, Tanzania,
Burundi and Democratic Republic of
Congo, has introduced a training program targeting schools.
Managing director Kamlesh Shah said
through the school-based training “many
students will be able to understand wheth-
er the paint is the right texture and thick-
ness or how many layers should be laid on
and in this way Basco Paints will be reduc-
ing on the issues to do with counterfeits.”
The story is not the same with another
leading player in East Africa’s paint mar-
ket, Crown Paints. The Nairobi-based
company, which also has a heavy presence
in Tanzania and Uganda where it trades as
Regal, said it loses $4.5 million every year
because of counterfeits.
Crown Paints, which reported a 15
percent growth in turnover for the period ending December 2012 to $50 million, said it has launched a new seal proof
packaging to ward off counterfeits which
are eating into its profits. The company
made a $2.5 million profit for the period
ending December 2012, an equivalent of
12 percent growth from the previous year.
“We have already imported special
seals in addition to using protected bar
codes on some of our fast moving products to fight off counterfeits,” said the
company CEO Rakesh Rao.
UNODC is pushing manufacturers, including paint makers, to raise the bar in the
war against counterfeits if they expect to
remain relevant in the market.
“If reputable wholesalers and retainers
assure that their sources are clean, then
the buying of counterfeits will remain a
marginal activity,” the agency said. But
more importantly, the UN agency said
“Africa agencies need outside support to
protect their populations while agencies in
source countries must continue to crack
down on this shameful enterprise.”
The trending phenomenon among
manufacturers today – outsourcing, has
been singled as the biggest contributor to
the persistent counterfeit problem.
“Outsourced manufacturers working under licences of trademark owners
expose the brand to the risk of counterfeiting as the transfer of knowledge,
work force and machinery to counterfeit
manufacturers is easier from outsourced
manufacturers than from the original
manufacturer,” said Maina. “There are
also cases where bogus goods are
mixed with genuine ones in the formal distribution channels without the
knowledge of the trademark owner
and the distributor and many a time,
it is difficult to draw a line between
the products. Counterfeit and original
products can travel in the same consignment in different containers.” CW
