Counterfeits cost German firms 7.3 billion euros in 2017: VDMA

Product and brand piracy cost German manufacturers around 7.3 billion euros (5.23 billion pounds) and 33,000 jobs in 2017, with China being the biggest culprit, a survey by German engineering association VDMA showed on Tuesday.

Alleged intellectual property theft was one of the main issues German Chancellor Angela Merkel discussed with U.S. President Donald Trump and French President Emmanuel Macron last month in a call over China’s trade practices.

More than 70 percent of companies surveyed by VDMA said they were affected by product or brand piracy, the trade body said.

“Aside from the loss of revenues and jobs there are also consequences for the affected companies that are difficult to quantify, such as damage to their image, loss of competitive advantage and unjustified compensation claims,” Steffen Zimmermann, the head of VDMA’s Competence Center Industrial Security, said at the Hannover Messe trade fair.

The scale of damage was identical to that recorded in VDMA’s survey for the previous year. But VDMA said counterfeiters were becoming more brazen, increasingly copying not only a product’s technical details but also its brand and appearance.

More counterfeit products were also distributed over the internet than in the previous survey.

German shoe maker Birkenstock earlier this year stopped supplying Amazon in Europe because of counterfeit products being sold on the website.

China was both the largest manufacturer and the largest market for counterfeit products, VDMA’s survey showed. Competitors from within Germany itself came second.

Almost 140 small and medium-sized engineering companies participated in the survey, which was conducted by the Fraunhofer Institute for Applied and Integrated Security in March and April this year.