The sale of both fake goods, and genuine goods sold on the grey market where goods intended for one country are bought in another, taking advantage of differences in pricing and availability – are a serious problem for trade mark holders looking to sell their products in the far east, where intellectual property protection is limited.
China has been under international pressure to deal with the problem within its borders and recently launched a much-publicised crackdown on piracy – mostly relating to the sale of fake CDs, DVDs and software.
Commentators are sceptical as to the long-term impact of the crackdown, but some fashion houses have now seen limited action towards the protection of their brands.
According to the China Daily, goods relating to approximately twenty brands, including Chanel, Fendi, Givenchy and Louis Vuitton, are no longer allowed to be sold in Beijing markets, but will only be available in authorised shops.
Li Dongsheng, vice-director of the State Administration for Industry and Commerce, confirmed that sellers who breach the new rules could face criminal prosecution over the trade mark infringements.
According to Li, in one market alone 40 businesses have been forced to close down because they were selling goods in breach of the new policy.