Authorities swing into action as counterfeits flood market
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Despite efforts stamp out counterfeits on the local market, authorities registered an increase in cases related to fake products over the past 12 months. According to reports by Police, the standards body and media, counterfeits and substandard products have flooded the local market. A week ago, counterfeit and illicit goods, including pharmaceuticals, cosmetics, and alcoholic drinks valued at over Rwf140 million were seized during the “Fagia OPSON II” operation conducted by Rwanda National Police (RNP). During a similar operation in 2015, only Rwf14.9 million worth of good were impounded.
It is this increasing volume and value of substandard and fake products that has raised a lot of questions among the public and businesses given the risk they expose to users. Are the authorities losing the battle to counterfeiters?
Many have questioned the capacity of the standards watchdog to address the challenge of increasing volumes of fake products in the country.
The irony is that this surge comes on the back of reports that the Rwanda Standards Board (RSB) suspended the pre-shipment inspection scheme of all imports bound for Rwanda months back. With this scenario, how will RSB and security agencies fight counterfeits and illicit trade to secure the market for genuine businesses and safeguard buyers?
According to Philip Nzaire, the RSB quality assurance director, the issue of counterfeits is currently a global challenge, requiring concerted efforts from all stakeholders to fight it. He says counterfeiters have become sophisticated and are always innovating to get new ways of beating market surveillance systems.
He says the fake products are, not only a threat to consumers, but also lead to loss of revenue for governments and present unfair competition in the market.
“Government and other stakeholders have to combine efforts and continue fighting counterfeiters to prevent them from infiltrating the market. We are sensitising the public about the dangers of fake products and we have strengthened our market surveillance mechanisms, which is crucial in the fight against importation of fake products into the country,” says Nzaire.
Some experts say informal cross-border trade is the main source of fake products in regional markets. Allan Ngugi, the anti-counterfeit officer at the SC Johnson & Sons Kenya Limited, says counterfeiters are taking advantage of the porous borders across the region to infiltrate East African Community (EAC) economies despite efforts by governments to prevent their entry. He, however, calls for further strengthening of border controls in the fight against infiltration of fake products into the region.
Efforts to curb fake goods
In Rwanda, the government deploys officers from the Ministry of Trade, Industry, and EAC Affairs, RSB, Interpol, Rwanda Utilities and Regulatory Agencies, the tax body and security agencies to ensure only goods that meet standards enter the country. However, the cheats always find away and bring in the fake products. Some are caught and apprehended while others evade this tight net.
“We recognise that there is still a big challenge of porous borders. We, however, urge informal cross-border traders to formalise business so that we are able to hold them accountable,” he says. He adds that the role of consumers in this fight is equally critical.
“Consumers must know their rights and always examine products before buying to ensure the goods are genuine,” Nzaire adds, saying the government was looking at ways of expanding cross-border controls.
Speaking during operation Fagia OPSON II last week, Emmanuel Butera the Commissioner of Police for operations and public order, called on all stakeholders to double their efforts if they are to stem the inflow of counterfeit into the local and regional markets.
“It is the responsibility of every Rwandan to fight fake goods by checking the expiry dates, the seals, and if they are stored as per the instructions,” says Butera. According to Butera, besides being an economic and health issue, counterfeits are a security risk.
The Police conduct public awareness drives such as ‘Fagia OPSON’ to promote public safety. ACP Karake said they are currently sensitising the public and traders against fake products, adding that enhancing detective mechanisms is paramount in dealing with the challenge of substandard and counterfeit goods.
What the law says
Article 342 of the Penal Code says that “anybody caught selling counterfeit products or involved in illegal trade, will have their business closed and are also liable to a fine of between Rwf20 million and Rwf100 million, or serve a jail term or both, on conviction.
In 2015, the government outlawed cosmetic products considered a health hazard under a ministerial order that listed over 1,000 illegal ingredients used in cosmetics.
According to the 2016 consumer affairs annual report by RURA, most buyers never pay attention to counterfeited products before making a purchase.
How fakes hurt economies
The Organisation for Economic Co-operation and Development (OECD) report for 2016 estimates that counterfeited products and fake products business transacted nearly half trillion dollars in monetary value, representing 2.5 per cent of global trade.
The trade, industry and EAC Affairs ministry, estimates billions of francs are lost through fake and counterfeited products entering into the country each year.
“Though we have not yet done a comprehensive study on the impact of counterfeit products on the economy; we are aware of the danger this illicit business poses to the economy,” says an official at the ministry.
It’s difficult to estimate how much we are losing since these products enter the country illegally, he adds.
Nsabimana Justin, a healthy expert says Fake products often crop up almost in every form which poses a health risk to the public.
“For example, such products come in as food and beverages or even cosmetics which could be dangerous to public.”
She says that, often, people complain of bacterial infection or skin rashes as a result of counterfeited products.
Protecting made in Rwanda
Alphonse Kwizera, a consultant at the Rwanda Association of Manufacturers (RAM), says fighting fake products is one of the ways of enabling local industries to remain competitive.
“We are always in touch with manufacturers to ensure they meet standards. This way, we shall be able to build consumer confidence, which is critical for Rwanda’s young industrial sector,” says Kwizera.
He adds that RAM is working with the Ministry of Trade, Industry and EAC Affairs, plus other sector players to find ways of strengthening the manufacturing sector and guarding it against counterfeiters.
Adan Ramada, the Nakumatt country manager, says ensuring suppliers and producers are ISO certified will help address the challenge.
He urges businesses to deal with only certified suppliers to avoid the problem and ensure accountability. This way you are able to keep quality and track of products, he said, adding that ensuring right procedures with right suppliers who must have proper documentation will help reduce the number of fake products in the market.
He also emphasised that consumers must avoid going for cheap products because it is these cheap products that are often faked.”