India Inc takes on fakes

Hindustan lever Ltd will soon change the packaging of all its sachet products to counter the widespread duplication of its products, which is estimated to bleed the company by nearly Rs 150-200 crore annually.

"Our research & development centre has come out with some innovative packaging materials, which will make the production of counterfeit HLL products extremely difficult. We have invested significantly on the new machinery and packaging materials and the new-look packs will be initially tried out with shampoos," Hindustan Lever Vice-President (legal affairs) Ashok Gupta told Business Standard.

According to Gupta, products like Clinic shampoo and Fair &Lovely are the Hindustan Lever products that are counterfeited the most. The company approximately loses 5 per cent of its entire shampoo sales or Rs 25 crore through the sales of fake Clinic shampoo sachet.

The company has also carried out several changes in the packaging of its talcum powder and shampoos to prevent counterfeits. "Now you will find our products in double packaging and single mould flip caps. The new and expensive measures are also putting pressure on our margins," he said.

Duplication of fast-moving consumer goods (FMCG) products alone is estimated to cost the industry around Rs 2,500 crore every year, also resulting in a Rs 900 crore revenue loss for the government.

HLL's announcement comes close on the heels of the Delhi Police's intellectual property rights wing along with Ficci's brand protection committee busting a Rs 250 crore counterfeit products racket in the city on Saturday.

During its raid at the Delhi suburb of Najafgarh, the police seized state-of-the-art printing machinery worth Rs 5 crore, holographic plates of Sunsilk shampoo, Ariel detergent and packaging materials of Philips, Bajaj Electricals and Surya Electrical products. Akhil Ahmed, the alleged kingpin of the counterfeit operations in Delhi, was also nabbed.

According to P&G Executive Director Ashok Chhabra, the company loses nearly 3-5 per cent of its Rs 800 crore turnover to fake products. "The printing and packaging was so good that even the company officials found it impossible to differentiate between the fakes and the originals," Chhabra added.

Gupta said the problem was most rampant in rural areas as it is easy to push the fake products into the retail network. For companies like Hindustan Lever, P&G and Colgate, nearly 50 per cent of the sales comes from the rural areas.