Although banned in Turkey, counterfeiting is a very lucrative business; yes, the country is a real hub. Number two in the world behind China, Turkey was the source of 12% of the counterfeits seized by customs in 2019. Report in Istanbul.
If you go to the Grand Bazaar, you will see the extent of the imitation market. Those who knew the place 15 years ago would be surprised to discover that the symbolic covered market with 4,000 shops is now as oriented towards counterfeiting as gold, leather, carpets or ceramics. In fact, more than a third of the shops you will find there are specialized in counterfeiting, this business covers several sectors, especially textiles and luxury, but also pharmaceuticals and cosmetics. However, not all counterfeit products are of the same quality: you will find fake Chanel bags that are copied to perfection and others whose imitation will not deceive anyone. As a result, prices can vary widely. So you can find “low-end” fakes and “luxury” fakes!
Turkey, a fertile ground for counterfeit production
If Turkey partly imports from China, it also produces and exports to Europe or Africa.
This production can be explained by an increase in exports, especially due to the devaluation of the Turkish currency in recent years. Among the reasons that led to the development of this “business”, it is also necessary to note the arrival of a new tourist clientele facilitated by the policy of the carrier Turkish Airlines. In fact, this company’s flights have greatly multiplied worldwide, facilitating access to tourism in Turkey. Thus, Turkey, which mainly received European and North American tourists on its territory, for ten years has seen an Asian clientele (especially Indonesian), Russian, African, South American, participate in the country’s underground economy by buying many imitated products such as bags, shoes, watches. ..
A “business” difficult to liquidate
If Turkey has signed the most important agreements on intellectual property, such as the Paris Convention or the Patent Cooperation Treaty, the country also has strong legislation in this area.e. There has been legislative protection of trademarks since 1995 (since 2017, according to Law No. 6769 on Intellectual Property), which concerns both the laws on the protection of trademarks, patents and industrial designs. Article 30 of the latter provides that any purchase intended for the sale, production, import or export of goods that infringe the rights of a trademark registered in the country, that is, with an international patent, exposes the individual to a imprisonment of one to three years, as well as a fine of up to 20,000 TL. But if this legislation exists, how to explain the extent of this market?
In practice, checks by the authorities are very rare (there would be barely one a year!), but when they do occur, the police seize goods and impose a fine on traders that would not actually have any serious impact. about the store’s future. In fact, the manager of a shop selling fake leather goods in the Grand Bazaar tells us: “When it happened they took a couple of Balenciaga bags and a few pairs of shoes from me, I went to pay the fine and that’s it I kept doing what I did, it didn’t, hasn’t changed something in my activity in general”. He explains to us that many of them have other stores in Istanbul outside the Grand Bazaar, which also allows them to protect their stock in the event of a possible inspection. Most of these traders thus have a “margin” in case of seizure.
It therefore seems that there is a real “laisser-faire” on the part of the Turkish authorities, which allows the development of this parallel economy, which after all allows to “govern” a country weakened by record inflation.
Moreover, the production of these imitations has an organization that makes it very complicated to dismantle. Many of the managers of these shops cater to wholesalers, whose workshops are often located in the basements of buildings, in commercial districts such as those in Gedikpasa or Laleli for example, located in the district of Fatih, not far from the Grand Bazaar.
In 2013, the chairman of the Turkish Textile Manufacturers Association (TGSD), Cem Negrin, reported: “Textile counterfeiting mainly concerns small workshops which adapt very quickly to fashion and police actions, it is very difficult to dismantle them”.
Counterfeiting, a market for which some pay a high price
Unlike France, Turkey does not sanction the purchase of counterfeit goods for personal use, but you can quickly regret your fake purchases once you cross the border.
Upon arrival in France, if the customs authorities discover counterfeit goods in your luggage (or even a counterfeit garment that you are wearing), they may destroy it and you risk a fine, the amount of which will be calculated according to the initial value of the genuine product. You will also expose yourself to the risk of prosecution and criminal penalties of up to three years in prison and a fine of €300,000.
But it is not only for the tourist who is checked when he returns home with a fake Gucci bag that counterfeiting costs. Above all, it is the brands in question who pay a high price for this infringement of their intellectual property rights. Indeed, the latter find themselves in direct competition with goods whose quality of imitation can be truly surprising, leading to a significant loss of direct sales. According to a report by the Counterfeiting Investigation Bureau of the International Chamber of Commerce (ICC) of the OECD, these losses are also accompanied by a drop in brand image when a defective product arrives to the consumer who thinks he has bought a genuine item. Added to this are the costs generated by litigation when these brands take legal action against counterfeiters, which explains their hesitation and their apparent inaction towards this Turkish market.
The manager of a carpet shop in the Grand Bazaar explains that the face of tourism has changed over the past decade: “Before, people who bought carpets might buy a bit of a fake, but it was very random. Today it has become essential, tourism is aimed at this counterfeit market. There have always been imitations, and this in the four corners of Turkey, but now when you arrive at the Grand Bazaar, the first image you have is the strong presence of counterfeit shops.” The latter also tells us about the damage that the increase in counterfeiting is inflicting on “legitimate” merchants. Rental prices are very high in this market and this “business” contributes to their growing rise, with landlords increasingly choosing to rent from “fake” sellers, even if it means breach of contract. These donors therefore find themselves stakeholders in the system. In fact, a fake shop guarantees the owner to collect his rent given the high prices charged and the rapid flow of stocks in these shops. Furthermore, this rigged market has led to a general increase in rental prices, with some retailers who have been established for decades having to give up their original premises for a smaller one.
But what about the adulterated consumer’s point of view?
In a shop in the Grand Bazaar when asked “Why buy fake?”testifies a New Zealand tourist: “And why not? It’s well made, look at the quality of these Gucci scarves, it’s almost identical to the real ones. Why deprive yourself? My friends have made orders from me, they’ll love it. If fake was a problem that wouldn’t be all this offer!”.
A few kilometers from the Grand Bazaar, in the busy streets of Kadıköy, on the Asian side of Istanbul, a French couple who have just bought a pair of fake Nike sneakers also explain the reasons for their purchase: “It is simply cheaper, counterfeiting, it is not necessarily to reveal imitations of big brands on itself, it can simply be practical things that we find cheaper than in our country”.
If customs seem strict with imitations of luxury products, it is true that you run less risk if you buy a Hilfiger sweatshirt. This is the case of Mary, an American who came on vacation with her mother to Istanbul, who explains to us: “I don’t think I’m taking a huge risk buying this sweater, it’s not like I just bought a collection of Louis Vuitton bags to start a business, so yeah I’d have cause to worry “.
Thus, the average consumer is tempted by the purchase of counterfeits, especially because he has the feeling of getting a “good deal”, seeing the product or brand as a means of social improvement, without worrying too much about legislation or consequences, which his purchases may entail ultimately.
The argument that counterfeiting is a job-creating market that contributes to the country’s economy remains open to criticism. Working conditions in this sector often remain unsafe, employees (sometimes foreign and/or illegal) are often poorly paid, and child labor may also be involved.
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