• Brandweek (paid subscription required), Monday, January 9, 2006 12:45 PM

Marketers who thought they didn't have to worry about counterfeit products need to think again. Once primarily confined to luxury goods like Rolex watches and Gucci handbags, counterfeiting has spread to other categories ranging from chewing gum to gasoline. The problem has proliferated at such an alarming rate that the World Customs Organization says it now represents 7 percent of all trade--a $512 billion business. Experts warn that counterfeiting is no longer just a legal problem and has grown at such an alarming rate that it now threatens major brands worldwide. "I track the reports from customs and I get to the point where I come in every day and there's a stack on my desk," said Joseph Gioconda, an attorney at Kirkland & Ellis, New York, which represents Hermes International. "It used to be one a month, then one a week, now I have eight a day. It used to be two or four bags [of counterfeit goods], now it's 2,000 or 4,000. The disturbing thing is that the premium counterfeits are becoming more desirable than the real thing." A knockoff Hermes Birkin bag, for example, hand-stitched in Italy, sells for $1,000.

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