Counterfeit goods and piracy cost the EU economy a whopping £71bn every year, according to research from the European Union’s intellectual property office.
More than 7.4 per cent of sales, totalling £40bn, across nine sectors are lost in the 28-country bloc due to fake products including handbags, toys, pharmaceuticals and alcohol, as well as music and gaming piracy.
Revenues siphoned off by fake goods also cause 790,000 job losses each year. Around 500,000 of these are directly lost or not created across these sectors, as legitimate manufacturers employ fewer people than they would have in the absence of counterfeiting. The knock-on effects on other sectors account for another 290,000 job losses.
The UK loses more than £6.4bn each year to the counterfeit economy and 80,500 jobs. It is the country fourth most affected by job losses due to fake and pirated products. However, the UK is the country most affected by music piracy due to the size of the music and digital markets, the second largest by lost sales in games and the third most affected by imitation products in the clothing and footwear sector.
Read more: Social media is the new market for IP crimes
"We hope that the results of our study series will help customers make more informed choices," said Antonio Campinos, executive director of the European Observatory on Infringements of Intellectual Property, which conducted the study.
"This is all the more important at this time of the year, when consumers and citizens are doing their Christmas shopping and choosing gifts for their dear ones. Through our reporting and analysis, we can see the economic effects that counterfeiting and piracy have on sales and jobs. The situation varies from member state to member state, but the overall picture from our study series is very clear — counterfeiting and piracy have a negative effect on the EU economy and on job creation."