The UK jewellery and watch sector loses €138m (£108m) every year as a result of counterfeit goods being shipped into the market, new EU figures show.
The size of the fraud being committed almost puts the jewellery sector on a level pegging with the UK handbag and luggage manufacturing sector. Its battle with counterfeiters is notorious, costing it €149m (£116m) a year.
Together, the manufacture of counterfeit jewellery, watches, handbags and luggage costs EU businesses a colossal €3.5 billion (£2.7 billion) a year.
Research from the Office for Harmonization in the Internal Market (OHIM), the EU’s largest intellectual property agency, reveal that some 13.5% of sales of jewellery and watches.
That compares with 12.7% of sales of handbags and luggage in the EU that are compromised by counterfeiting.
Those lost sales translate into 27,000 jobs directly lost across the two sectors, as legitimate manufacturers employ fewer people than they would have done in the absence of counterfeiting, according to the EU.
Moreover, the total yearly loss of government revenue as a result of counterfeit products in these sectors across the EU in terms of household income taxes, social security contributions, corporate income taxes and VAT can be estimated at €1.1 billion (£860m), it claims.
António Campinos, president of OHIM, said: “The jewellery and watches sector and the handbags and luggage sector in the EU are overwhelmingly made up of micro-enterprises, which employ fewer than 10 people. The average number of employees per enterprise in the jewellery and watches sector is just three people. Such businesses are particularly vulnerable to the economic effects of counterfeiting.”