Manufacturers seek passage of anti-counterfeits law

Manufacturers are hoping for relief as the regional council of ministers moved to introduce special laws to shield them against piracy and counterfeits.

The EAC Council of Ministers is set to introduce the EAC Competition (Amendment) Bill 2015 to curb the menace amid growing complaints by manufacturers and traders badly affected by counterfeits.

“The Bill (EAC Competition (Amendment) Bill 2015) seeks to amend the Competition Act in order to establish a mechanism to eliminate counterfeiting and piracy trade in the community,” the EAC secretariat said on Wednesday.

The proposed amendments have not been published publicly even though sources at the EAC headquarters said they would seek to introduce punitive measures against pirates and counterfeiters.

“This is seen as crucial in providing impetus in order to promote industrialisation and economic growth.  The Bill further anticipates to create a conducive investment climate in the community, free of unfair competition practices embodied in counterfeiting and policies and to promote the creation of intellectual property rights in the community” the EAC secretariat further said in reference to the new Bill.

The ongoing knock-down of administrative barriers along the national borders of EAC member states has sparked a fresh rally of trade in illegal goods that is costing manufacturers billions of shillings in market share and heavy revenue losses to governments.

READ: EAC firms lose Sh180b to traders in fake goods

“The challenges of counterfeits are huge and growing and quick action should be taken to stem the menace. Counterfeiting should be declared an economic crime because the effects on the economy are huge,” Betty Maina, chief executive of the Kenya Association of Manufacturers (KAM), told the Business Daily.

Estimates show that counterfeit products cost manufacturers and traders in the region more than Sh180 billion annually.

“We only hope that the fight against counterfeits will be on a collaborative format for it to be effective. The major challenge is with enforcement and all parties should work together towards achieving the overall goal,” Ms Maina said.

A regional lobby, East Africa Business Council (EABC), says growth in illegal commerce is being driven by foreign and local entrepreneurs who are using the relaxed trade regime to replicate well-known brand names and designs for sale at cheaper prices.

Dry cell batteries, alcoholic beverages, fruit juices, shoe polish, toothpastes, soaps and detergents, ball point pens, books, electrical and electronic items are some of the most counterfeited products.

Cigarettes top the list of counterfeit products sold in the Kenyan market threatening the market share of established players such as British American Tobacco (BAT).

Others are perfumes, clothing, footwear, cosmetics, pharmaceuticals, automotive spare parts, computer software and hardware, audio and video tapes and CDs.