Fake labels are undermining the lubricant industry

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In short :

  • The relentless search for top quality products at the lowest possible price has opened a back door for counterfeiters to infiltrate the supply chain and digital markets with their counterfeit products, causing major global concern.
  • For the lubricants industry, counterfeiting is a growing problem and the complexity of inspecting and verifying products once packaged can make them extremely susceptible to imitation.
  • Gurdip Singh, CEO of Kallik, and Brahmpreet Gulati, CEO of BrandCares, discuss the harmful effects of counterfeit lubricants, including on the global supply chain, and key protection strategies to defend against fraudulent goods.

The health and safety risks associated with counterfeit lubricants are widespread. While for some companies they can be a mild annoyance, for others they can be much more serious and even life threatening, while causing untold damage to machinery and brand image.

Despite the harsh reality of these threats, the number of customs seizures of counterfeits has been steadily increasing for more than a decade; over the past 10 years, the number of confiscated counterfeit and intellectual property infringing products worldwide has steadily exceeded 100,000 each year. OECD data estimates that counterfeit goods account for 3.3% of all global trade. These products generally do not meet the quality and safety regulations established by their respective industries.

A fundamental piece of the machine puzzle

Lubricants are generally used in very specific roles, tailored to individual machine parts and their functions. It is an essential product that plays a key role in supporting the continued operation of machinery, with their most common applications spanning manufacturing, refrigeration, automotive and HVAC.

Each product must possess specific properties to ensure the intended function, which means that replacing genuine products with unapproved and non-specialized alternatives can have a significant negative impact on operations. Counterfeit lubricants routinely cause more than physical damage to machinery and equipment – ​​destroying brand reputations, severely affecting consumer confidence and disrupting the entire supply chain, to name a few.

An international concern: counterfeit products are being seized around the world

Globally operating digital marketplaces are all prime targets for counterfeiters and their wares, as evidenced by a cursory scan of China’s Alibaba marketplace, which indicates that consumers are looking for engine oil lubricants from as far away as the world. Europe, Asia, North America and Africa. .

Consumers are more exposed than ever to counterfeit products at reduced prices—US Customs and Border Protection (CBP) data shows that more than $1.5 billion in counterfeit products were seized in fiscal year 2019 alone. CBP data also indicates that a substantial proportion of counterfeit products are manufactured outside of the Western markets for which they are intended, China and Hong Kong being the source of 83% of all seized counterfeits.

The truth in one place: the label

If counterfeit products attempt to imitate genuine brands by replicating packaging, clear and consistent labeling providing full product and manufacturer details can be the differentiating factor. It is therefore important to have a simple but complete identification.

Counterfeit lubricants pose a variety of problems for manufacturers and distributors as counterfeiters typically employ a selection of tactics such as using unapproved base oils or formulas, modifying additives that do not meet performance requirements and the reuse of old and dirty oils and lubricants.

Through the printing of counterfeit branded packaging, these are then falsely presented as genuine products. The inability to directly inspect and test the contents of every product makes identifying counterfeits before they infiltrate the supply chain a major challenge.

Automated labeling technology can make the difference

Using third-party printers to produce consumer-facing labels is common practice for many lubricant companies, but can make these organizations particularly vulnerable to asset leaks or theft, which could then fall into the hands of counterfeiters.

With automated label and artwork solutions, the approved label is stored in an internal asset manager and third-party printers get access on a case-by-case basis, eliminating the risk of e-mailed variants being leaked. -mail, because only the most recent approved version can be printed. Automated labeling solutions that incorporate this centralized management can also ensure that all relevant safety and regulatory compliance symbols are accurate and legible, and able to be updated at short notice.

Besides combating counterfeiting, automatic labeling offers other logistical benefits, freeing employees from the burden of manual labeling to focus on other important tasks. Automated labeling can reduce the often enormous financial expense of creating and managing artwork by bringing processes in-house and ensuring consistent, high-quality label placement in the correct proprietary font to eliminate human errors. This is a key differentiator from counterfeit products that often feature misplaced, poor quality, and inconsistent labeling in generic fonts.

Eliminate the threat in a single, clean and streamlined scan

The last thing manufacturers want is for their product information to reach those who intend to produce cheap and harmful imitations. Securing product information through automated labeling is key to preventing counterfeit products that could ruin a brand.

These systems guarantee the integrity and traceability of all forms of electronic printing, packaging and labeling; ensure full regulatory compliance; and support integrated electronic product labelling. End-to-end management also streamlines the approval process and provides better control throughout the supply chain, providing the agility to quickly deploy any specific counterfeit countermeasures on all labeling and artwork. of the supply chain.

Easily replicated labels and trusted brands are most at risk

Trusted brands are often taken at face value by consumers and their products are consumed, resold or shared without a second thought. Consumers routinely lack detailed product knowledge regarding chemical composition or industry regulations. They simply search and purchase the recommended product for their needs.

But brands with easily imitable labels and packaging are also an easy target, and counterfeiters will attempt to pass off their illegitimate products as genuine, often infiltrating the supply chain through avenues such as online storefronts or unknown sellers. unlikely to recognize counterfeit products.

The distributed global nature of many supply chains also poses a threat, as weaker laws, regulations and copyright enforcement mechanisms abroad make it difficult to identify and stop production and counterfeit sales.

Spotting counterfeits: exposing the ones that go unnoticed

BrandCares has researched lubricants available in several online marketplaces and identified several common mistakes made by counterfeiters that are helpful in discovering counterfeit products.

Inconsistent packaging placement and quality is common and is the first giveaway of a counterfeit product. Many of them feature incorrect language and grammar while omitting key product information. These counterfeits are then sold at significantly lower prices to undercut genuine sellers; the research team identified several counterfeit lubricants that are undervalued by up to 50% by small private companies.

Brands should regularly research various online marketplaces to identify suspicious sellers and publicize counterfeit operations, once closed, as a deterrent.

From a marketing point of view, the product, its quality and the expected performance are often overstated and the supporting images are generally unprofessional, not meeting the photographic standards of the brand on the official websites of distributors. Implementing consistent, high-quality product labeling and packaging artwork is a key anti-counterfeiting measure.

Counterfeiters and their tactics are changing

Distinguishing counterfeiters and their products from genuine products is not an easy task, but it is one that should be taken seriously for both consumer health and safety and brand protection. It is essential that brands play their part in identifying and removing these products from the market, which includes a vigorous fight against “pop-up” counterfeiting operations in near real time.

Labeling systems can play a key role in broader anti-counterfeiting efforts, ensuring compliance with health and safety regulations and avoiding the risk of genuine product assets falling into their hands. of counterfeiters. When combined with effective management and consistent brand protection, lubricant brands are much more likely to protect their intellectual property, bottom line and reputation.

Gurdip Singh is CEO of Kallik, a labeling and artwork provider, and Brahmpreet Gulati is the CEO of BrandCares, an international anti-piracy company.

This article appeared in power and movement.

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