On the 10th of November, the Consumer Choice Center hosted a webinar titled “Illicit trade challenges and solutions.” To discuss how illicit activities endanger consumers and undermine brands, CCC’s Maria Chaplia was joined by David Haigh, CEO of BrandFinance, and Tamara Pirojkova, Marketing Director Leading Brands of Spain Forum. Sean Kelly, a Member of the European Parliament for Ireland, couldn’t join the event but shared his views in a pre-recorded video message.
Illicit trade is a severe and growing threat to our societies. Smuggling and counterfeit products undermine governments and legal businesses and expose consumers to poorly made and unregulated products.
A 2021 report by Brand Finance concluded that brands help in the fight against illicit trade and that brand protection is key to ensuring consumers have access to safe and credible products. At the same time, illicit trade is a complex, multi-layered issue and should be analysed through multiple lenses. Commenting on the findings of the report, David Haigh said: “Illicit trade is usually strongest when brands are strongest because the profit margins are highest. So, on the one hand, the illicit trade people want to get on the back of profitable brands, but meanwhile, brands are being criticised for not being socially desirable.” According to the findings of the said report, while consumers want some regulation of brands, they also like brands and find them “extremely helpful”. 95 per cent of consumers agreed that brands improved the quality of their product choice, and 93 per cent said that brands improve the quality of the products themselves.
Expanding on David’s comments, Tamara Pirojkova elaborated on how brands contribute to society as a whole and individuals, and how much innovation, creativity, and effort goes into brand building and positioning. “It is also important to think about the role of advertising and marketing, through which brands can explain to consumers what we do and why, and how we improve the lives of people by introducing new – or old – products to the market. Brands are also very concerned about how they can be more sustainable and project human rights. On the opposite end, illicit trade is not conscious about any of these things,” said Tamara.
One of the main takeaways of the event is that it is key that the European Union and member states focus not only on the enforcement side of anti-illicit trade policies, but also ensure that the policies in place do not stimulate illicit activities. Some examples of the latter include high taxation and branding, as well as marketing bans. A policy brief, published by the Consumer Choice Center, concluded that “branding and brand promotion should be encouraged as the most trusted way of presenting quality and confidence to consumers.” In the words of David Haigh, “There needs to be a slight change in the governments’ attitude towards brands. They need to be supportive rather than indifferent or aggressive.”
Tamara Pirojkova added: “I see many opportunities for brands and consumers to build trustworthy relationships, which normally takes years. However, the high level of trust allows companies to be transparent when they are at risk and communicate their fears about illicit trade to their consumers”.
The Consumer Choice Center would like to thank the speakers for their participation in our event. As a global consumer advocacy group speaking on behalf of consumers globally, we will keep communicating the dangers of illicit trade and raise awareness about intrusive policies that undermine brands and encourage criminal activities. Be sure to keep an eye on our work to learn more.