Counterfeit Toys Cost EU Games Manufacturers €1.4 Billion in Losses Yearly

On the 14th of December 2015, the Office for the Harmonization in the Internal Market (OHIM), which is the leading European intellectual property agency, published a report stating that in the EU games and toy sector, 12.3% of sales are lost due to counterfeiting. This dent in sales results in the loss of 6,150 possible jobs in the industry, which is mainly composed of small and medium size enterprises (SMEs), each of which employs around 10 workers.

The report also highlights indirect effects of the counterfeit industry which has continued to grow over the years. Across the EU, €370 million in government revenue (VAT, income tax etc) is forfeited.  By “toys and games manufacturing sector” the report included the manufacture of products such as dolls, action figures, stuffed animals, board games, toy musical instruments, model trains and puzzles. It does not include bicycles or video games software or consoles.

This report, which is the  fourth in a series of studies on the economic repercussions of counterfeiting conducted by the OHIM, found that:

• Germany produces the largest amount of games and toys throughout the EU – in 2012, this accounted for 40% of total EU production. The German toy market could be 10.9% larger, and earning €327 million more annually, if counterfeiting was eradicated.
• The UK is the second most impacted industry, with £174.2 milllion (11.6%) in direct sales lost yearly.
• In Spain, €167 million are lost (16.6%), in Italy, the amount is calculated to be €201 million (15.6%), and €168 million (11.6%) in France.

The President of the OHIM, Antonio Campinos, commented:

“We are completing a picture of the economic impact of counterfeiting in a dozen economic sectors across the EU. Today’s report shows us the extent to which the toys and games sector is impacted by the presence of counterfeits in the market. Through this reporting, we aim to help policymakers in their work, by providing data and evidence-based studies, and to help consumers make more informed choices.”

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