30.09.2005
Blow against Russian product pirates

Deceivingly similar
The „Deutsche Industrie- und Handelstag – DIHK“ (German Association of Chambers of Commerce and Trade) estimates the worldwide losses arising from product piracy at roughly 500 billion Euro annually. Apart from China also Russia in particular is regarded as a professional multi-copy plant of profitable goods. Since quite some time product piracy is no longer limited to luxury time pieces, sporting goods and designer clothes.

According to information by the Directorate General for Taxes and Customs Duty of the European Commission also the cosmetics and toiletries industry is increasingly being focussed by the product pirates. The industry has suffered from an increase of incidents by 800 percent in 2003 compared to 2002. Primarily top-selling brands enjoying high reputation like Nivea are being copied by the criminal Russian counterfeiters. In 2003 the first fakes of Nivea Hair Care products appeared in the Russian market place. A market survey conducted locally revealed a fake quota of more than 30 percent by beginning of 2004. Packaging was copied so well that even insiders like the former CEO of Beiersdorf AG, Dr. Rolf Kunisch, could no longer distinguish them from the original. Losses in the millions and the concern for the brand reputation of Nivea in particular led to the adoption of a new security system: the tesa Holospot technology. Starting from the second quarter of 2004 Beiersdorf AG had its Nivea products meant for sale in Russia marked with the tiny only 1 square millimetre small security holograms of the tesa affiliate from Heidelberg.

Keeping track of the culprits
The tiny forgery-proof labels that can save up to 1 kilobyte in information contained the Nivea logo and an individual serial number as well as another covert information. The Russian distribution partner could only verify the authenticity of the Nivea products by checking the logo and the serial number with a magnifying glass.
Furthermore, retailers were informed of the existence of another coded information level. With these covert data only accessible to authorised individuals the supply chain can be retraced over several steps. In addition to these measures Beiersdorf AG established a telephone hotline to immediately answer questions with regard to the authenticity of Nivea products. Moreover, an international security company was hired to control the success and for the identification of criminals.

100 percent success
During the use of the tesa Holospot system the frequency of fakes encountered was checked continuously. After roughly one year not a single faked Nivea Hair Care product was found in the market place. Turnover increased by over 40 percent and for the first time it became possible again to advertise the affected Nivea products. Advertising had been discontinued in 2004 in order not to let the product pirates benefit from increased demand. With a unique combination of effective fake protection technology and tightly focused field investigation – another of the fundamental corner stones of the security strategy implemented – imitations could be prevented within a year’s time.

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