Vietnam could become the next big counterfeiter

By Bao Van, Thanh Nien News

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Fake belts displayed for sale on a street in Ho Chi Minh City. PHOTO: DAO NGOC THACH
Fake product makers in China are chasing cheaper labor and leaner oversight from European and US importers all the way to Vietnam, said Phan Minh Nhut, brand protection manager for Nike, during the a conference on intellectual property rights held in Hanoi on Tuesday.

Nguyen Thanh Hong, from the Department of the Intellectual Property under the Ministry of Science and Technology, Vietnam's counterfeit goods' operation is equal to one-sixtieth, or one-seventieth of China's.

“Without drastic measures to combat fake products, Vietnam could become a big counterfeit goods producer in a near future,” he said adding that many handicraft villages specializing in counterfeiting have cropped up as farmland continues to disappear.

He used, as examples, Hanoi’s Thuong Tin District, which produces counterfeit blankets and pillows and portions of Thai Binh Province, which produces fake eyeglasses.

Now, fake products can be found all over Vietnam, Hong said, blaming the country's proximity to China. 

He said a large volume of bogus Chinese-made Viagra has recently turned up in Belgium. Fake products have also been found in northern provinces, especially Hanoi, Nhut said.

Do Thanh Lam, deputy head of the Market Management Department under the Ministry of Industry and Trade, said his department deals with 90,000 counterfeit cases a year mainly in the form of knock-off beverage products, cigarettes and garments.

The department imposes fines worth some VND400 billion (over $19 million) annually.

In the first quarter of this year, over 25,000 counterfeit cases were resolved, he said adding that many more go undetected.

Uncooperative businesses

Lam said many firms import fake materials and spare parts, and use assemble their products in Vietnam. These cases are particularly hard to detect, he noted.

“There are firms whose knock-offs are so close to the genuine article that only the original manufacturer can tell the difference,” he said.

Vuong Chi Dung, vice head of the Hanoi branch of the Market Management Department, said the number of small time counterfeit cases has fallen recently, but big ones have increased considerably. Many big firms have actively participated in fake goods production.

His agency recently detected a firm producing fake French wine, and a Taiwanese firm making counterfeit Honda motorbike spare parts.

Up to 80 percent of counterfeit goods in Vietnam come from China, he said. There's also a trend of producing fake goods bearing famous Vietnamese brand names.

Fake products have caused huge losses to firms, but the affected businesses have not actively cooperated with local authorities in combating the problem, Lam said.

Only big companies and multi-nationals work to fight bogus products.

“Many firms are concerned that reporting knock-offs will cut their revenues as consumers who cannot distinguish genuine items and bogus ones may cease using their products,” Lam said. “Some firms do not want to publicize a method for distinguishing genuine products and fake ones to local market management agencies because they worry the information will get back to the counterfeiters.”

Given their limited financial capacity, Vietnamese firms have not yet paid much attention to brand protection, he said.

Meanwhile, the relevant authorities remain understaffed and poorly trained. A small portion of the country's 6,000 plus market management inspectors know much about intellectual property issues, he added.

Public awareness about the fight against fake goods remains low. Meanwhile, current laws don't impose fines on users of counterfeit products. In European countries, the use of such products is considered a crime, Lam said.

Echoing him, Hong of the Department of the Intellectual Property, said improvement of public awareness is the most important issue in fighting against counterfeit goods, as many people want to use cheap products. 

That's not a problem unique to Vietnam. In a recent survey conducted in G7 countries, up to 49 percent of respondents said they'd want to buy fake products if they had good quality, he added.

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