A challenge that applies to all industries today also hits the food and beverage sector: online shopping on the Internet is a perfect window for manufacturers and distributors to sell fake products on a low-risk and low-cost basis. Today anyone can manufacture any product in any part of the world on an online marketplace or website for buyers all around the world.
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Online marketplaces are an ideal environment for advertising counterfeit goods, and this is a challenge for brand owners. But not only online websites are a threat to brand owners, but today social media also is a big part of the market for counterfeited food and beverage. Setting up a profile for free on a popular social media platform provides counterfeiters with an opportunity to attract consumers to their content and to lure them out of the social media environment and into places on the Internet where they can sell them counterfeit food and beverages.
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Examples of the scale of the challenge facing brand owners and consumers are as follows:
Forbes reported in 2016 that up to 80 % of Italian extra-virgin olive oil sold on the US market is fake. Another example is wine sold in China, it is estimated that up to 70% of sold wine is counterfeit. The consequences of counterfeited products entering the market are lost sales and revenue, lost opportunity to increase market shares, damage to brand reputation associated with counterfeited goods, and erosion of consumer trust.
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Even worse can it be for the consumer buying the counterfeited product, every time a consumer ingests a food or beverage product that has not been subject to the same rigorous production standards as a genuine product, there is a risk to his or her health and wellbeing. Toxic substances are sometimes found and traced in counterfeit goods and there is no easy way for consumers to know if the product they are eating is fake. Eating or drinking contaminated products can be a risk with consequences, like drinking fake alcohol which can cause blindness or death, there was an incident in Russia in 2016 where 72 people died from drinking counterfeit vodka.