Thailand's counterfeit pipeline: Porous borders, government inaction allow bogus goods to travel the world
Monday, November 26, 2007; Posted: 03:20 PM
The sprawling, open-air Rong Kluea market has all of the familiar clothing brands found at any top-flight U.S. mall: Abercrombie & Fitch, Aeropostale, American Eagle, Gap, Hollister, J.Crew, Justice, Victoria's Secret Pink and more.
But take a good look, because what you see is rarely what you get in this backwater bazaar along
Over there, twisting on a hanger in a shop with folding tables on a dirt floor, is a green Abercrombie hoodie. From a distance, it's unremarkable. But up close, it's clear the garment has no sewn-in labels and is finished with a Puma-brand zipper.
"In this whole market, there's nothing legal," says a woman hawking rack upon rack of questionable Abercrombie & Fitch merchandise. As if to prove the point, she's wearing a baggy Gap T-shirt, an obvious no-no for a real Abercrombie salesperson.
To lend an air of authenticity to her wares, she keeps a loose-leaf binder with color images printed from the Abercrombie Web site. They look good. Through an interpreter, she says her merchandise is the real thing, stolen from authorized Abercrombie factories in
She could be telling the truth, but none of these customers -- a combination of Asians and Western tourists -- seems to know, or care.
What's undeniable is that
With a central location and modern ports and airports,
Observers said that officials in
"Stopping counterfeiting is a difficult proposition in any case, but adding in corruption makes some producers virtually untouchable," said a Western diplomatic source in
Rong Kluea and similar markets in the capital,
Abercrombie & Fitch, which has no stores in Asia and only one in
"We agree that we have a problem with intellectual property; if you walk the streets, you can see it," said Woranuj Maneerungsee, a reporter with the Bangkok Post. Her newspaper editorialized last spring that
Rong Kluea rivals a state fair in scale, with hundreds of vendors in semi-permanent stalls hawking clothes and household goods. Farm animals and wooden pushcarts add ambience and serve as the primary means for moving illicit goods in and out.
There's little pretense or effort to create the illusion of legitimacy. In one vendor's pushcart, phony Rolex and Omega watches compete for space with dried mushrooms and Thai spices.
Ever wonder where a knockoff Burberry purse might come from? Quite possibly this market, in stalls with tarps for walls, where children eat lunch off mats on the ground while women sew copies of the designer brand's distinctive plaid fabric onto generic Chinese-made bags.
Prices are less than a fourth of what legitimate designer goods would cost in the States. Tour buses from all over
There's no sign of Jiminy Cricket. He could be among the bucketfuls of insects and small reptiles destined for the food court's deep fryer.
Counterfeiting does more than rob companies of sales and support organized crime, child labor and terrorism.
Knockoffs also can damage brand images and hurt consumers.
Fakes sold as real products frequently are made from outdated, dangerous, leftover or stolen components that convey just enough legitimacy to fool unwary -- or indifferent -- consumers.
And while it's one thing for a pair of fake Nike shoes to fall apart prematurely, the stakes are much higher when products can harm consumers.
"It's a real problem when you're talking about safety," said Robert Crane, lead enforcement specialist of anti-counterfeiting operations for Underwriters Laboratories Inc. in
"You can be electrocuted or your house can burn down," he said. "You can die."
Underwriters Laboratories, a nonprofit testing service known by its UL mark on a variety of electrical products, maintains a force of 1,800 inspectors who do nothing but monitor factories around the world.
Their weapon of choice is a high-tech tag, and all Chinese-made lighting products sold in the
The tags are made in one secure
Even so, counterfeiters slap phony UL labels on electrical products made with insufficient amounts of copper. Fake circuit breakers look like the real thing but may not trip when overloaded. All of these products can and have burst into flames, Crane said.
While consumers may not be able to tell a real label or product from a fake, he said, be wary of:
--Any product that mentions UL on the carton or product but gives no company name or address.
--Any product with UL on the packaging but not the product itself.
--Shoddy workmanship or cheap packaging.
--Any electrical product significantly marked down and sold by street vendors or at flea markets and deep discount stores.
Counterfeiters also knock off millions of batteries in
They frequently contain high levels of mercury, and many don't have the built-in ventilation that keeps branded batteries from overheating or exploding, she said.
The logo on Energizer's popular Eveready brand is a black cat jumping through a 9. The company has been fighting a Chinese imitator using the Everpower name. Its batteries feature a skinny black jaguar jumping through an 8.
A busy consumer might not notice the difference.
Most Everpowers are sold in Asia and the Middle East, but some reach the
"It can be really hard to tell a real from a fake, but we pursue counterfeits wherever we find them," Frazier Schmitt said. "Consumers can be disappointed with counterfeits, and that translates to disappointment with our brand."
Wild West of fakes
Rusty Lerner is one of
With 35 employees, his business is booming.
Ray Tai, a Hong Kong-based lawyer responsible for policing adidas brands in
Lax border controls and little or no enforcement of intellectual property rights by
In addition to apparel,
"The profit margin on ink cartridges is better than heroin," Lerner said.
And they're a safer bet for criminals. Counterfeiters in
"The penalty is often death for narcotics, whereas if you're a counterfeiter, people say, 'OK, you're just a businessman,' " said Daniel C.K. Chow, an
In an effort to boost tourism,
People certainly come and go with ease along the Thai-Cambodian border, and they know how to work the system.
"It's like a flow of ants," Lerner says. "People cross the border all day with two fake cell phones at a time. Two phones are considered personal use."
For those who want to minimize trips, it's not hard to slip through holes in the border fence. Conveniently, border guards patrol the area just twice a day.
"People know when that is," he said, "and they just go back and forth."
Lerner can make the drive from his office in
"He didn't want to do the paperwork," Lerner said.
That attitude is typical of what Western companies face in the fight to protect intellectual property in a country where law enforcement can be sporadic and arbitrary.
"We don't expect piracy to be wiped out overnight; however, we would like the Thai government to have a plan for how to better protect intellectual property and make a greater effort to enforce their laws," the Western diplomatic official said.
On the return trip from Rong Kluea to
"It tastes better than chicken," one said. Lerner politely passed.
Not far from the boys, in the middle of rice paddies and forests in
A waitress approached, wearing a Louis Vuitton fanny pack. Either tips are quite good in this remote outpost, or it's a fake.
Abercrombie & Fitch, which has no stores in Asia and only one in Europe, is blatantly knocked off in