Wednesday, April 1, 2009

Is it worth it?: The Ethical Question of Purchasing Counterfeit Handbags

The Price of Faux Luxury
According to the International Anti-Counterfeiting Coalition, in the past 17 years the global trade in illegitimate goods has increased from making $5.5 billion (USD) annually to approximately $600 billion (USD). Purchasing counterfeit merchandise is a growing trend in a society where a luxurious lifestyle is constantly being promoted as the key to happiness. Television shows such as, The Fabulous Life Of…and MTV Cribs flaunt and exploit the material wealth of high profile celebrities. In weekly tabloid magazines such as, In Touch Weekly and Life & Style, famous actresses are constantly photographed carrying the latest designer brand name handbags and accessories. This increased media attention on designer handbags has led to incredibly large sales for luxury brands. In 2005, LVMH Moët Hennessy Louis Vuitton, the Paris luxury-brand group which owns Louis Vuitton and Donna Karan, had recorded sales of $17.32 billion (USD) and a net profit of $1.79 billion (USD).The target demographic for fashion houses such as, Chanel, Louis Vuitton and Prada is that of the socially elite. In the late nineteenth century, fashion houses would cater to European aristocrats and elite American families. Today, the demographic has slightly shifted to that of the A-List celebrity. An individual who is an attainable role model for the everyday woman who wants to have a luxurious lifestyle, and an easy way to accomplish that is to purchase a designer handbag.

Designer handbags are typically less expensive than designer clothing and for a woman who may feel insecure about her body weight she will not have to try her handbag on. The retail cost of an expensive handbag is often in the thousands. For example, a lime crocodile Hermés Kelly bag has a retail cost of $114,000.The high price of a designer handbag is due to the skilled craftsmanship, expensive materials and extreme attention to detail that is put into each bag. To create a Hermés handbag, the animal skin of an ostrich, crocodile or lizard is cut one skin at a time by a skilled craftsman and is then stamped in a gold or silver leaf that identifies the atelier year and worker that constructed the bag.The expensive retail price of designer handbags is often difficult for the average consumer to pay especially with the current economic recession. In flea markets and New York City’s Canal Street, where counterfeit handbags are sold for one-tenth of the retail price, purchasing a fake designer handbag is often an easy choice for the everyday consumer. In fact two-thirds of Canadians have said that they would purchase a real designer handbag if the counterfeit was not available. However the manufacture and distribution of counterfeit products is illegal in countries such as, France, the United States and Canada. According to Harper’s Bazaar’s organization, Fakes Are Never in Fashion American companies have suffered a $20 billion (USD) loss from counterfeit products. Although a consumer may justify their purchase of a counterfeit handbag feeling that it is not hurting anyone, they are wrong. Design houses pride themselves on their products. To create a large Hermés Birkin bag it takes twenty-five to thirty hours as well as strong expertise from a skilled craftsman that is often taken for granted when a consumer purchases a fake handbag. Producing a counterfeit handbag is no different than stealing and to purchase one supports this. As described by the executive director of the Global Intellectual Property Centre Caroline Joiner, “If they make it, they fake it".Consumers need to be more informed of the affects of their retail purchases, for the effects are much greater than they may seem.

Louis Vuitton Speedy + Canal Street = Terrorism and Child Labour?
According to terrorism expert Magnus Ronstop of the University of St. Andrews in Scotland, “profits from counterfeiting are one of the three main sources of income supporting international terrorism”. Although this may appear to be a broad statement it is an unfortunate reality. The billions of dollars that the sales of counterfeit handbags have generated have gone to groups associated with the Hezbollah, the Shite terrorist group and FARC, the Revolutionary Armed Forces of Columbia. Terrorism is a serious issue affecting the security of human beings and a significant fact that a consumer may not be aware of when looking for a deal on Santee Alley in Los Angeles. The large financial gain that has been made through the sale of counterfeit handbags has inspired popular “purse parties”. In late 2008, Katharine Richards was charged with fraud under the Criminal Code for her alleged role in the sale and distribution of counterfeit handbags. Richards held “purse parties” selling fake Burberry, Chanel and Louis Vuitton handbags under the business name, Katie’s Unique Boutique. The sale of counterfeit products is a practice that is illegal and has serious repercussions. In France, it is a crime to buy or carry a knock-off handbag and an individual can face up to a three-year in jail sentence. In the United States, a first time offence of counterfeit laws can lead up to a 10-year jail sentence and a fine of up to $2 million (USD). The money that is used to purchased a counterfeit handbag not only supports illegal activity but also the ongoing problem of child slave labour in China. Children aged eight to fourteen years old are regularly sold into labour to produce the fake Louis Vuitton being sold in a local flea market. The child workers are often housed by the owners of the counterfeit factories and when a factory is raided, an occurrence that happens at least twice a day, the children working in the factories are left homeless. An extreme case of the child abuse that occurs at the hand of a counterfeit factory owner is one that has occurred in Thailand, where children’s legs were broken and tied to their thigh bones to prevent them from running away from the factory. This illegal production facility is a far cry from the ateliers of Chanel or Hermés where the handbags are made of the finest leathers and gold hardware. When a tourist in Milan’s Piazza San Babila, a popular tourist destination in Italy, gets that thrill of purchasing a fake Prada handbag for $40 (USD) they are indirectly supporting terrorism and child labour. When hearing information such as this it is strange to think that two-thirds of British consumers are proud to tell their family and friends they carry a counterfeit bag.

Recessionista or Fashionista
China is the main area for production of counterfeit goods with 81% of all counterfeits in the United Stated coming from China. Counterfeit handbags can be purchased virtually everywhere, from Internet sites to flea markets to beauty salons and even college campuses. However, due to the illegal nature of selling the products, the vuo compra, the Italian name for those who sell counterfeit products, solicit consumers in search of buying a cheap Fendi handbag. Quiet whispers stating, “Gucci, Prada, buy designer handbags” catch the attention of consumers who are then taken to a secret location filled with fake designer handbags. The sale of counterfeit products have cost US businesses $200-250 billion (USD) annually with the loss of more than 750,000 American jobs. Although the sale of counterfeit handbags may generate profits in the billions the profits made from the sale of these products do not go towards the economy of the country in which they are sold. Due to the illegal nature of “knock-off merchants”, business people who produce counterfeit products and resell them for a fraction of the retail price, registering their businesses will lead to an arrest and fine. According to Bob Weese, the Chair of the Canadian Intellectual Property Council and Vice President of GE Canada, “Anti-counterfeiting would strengthen the legitimate economy by driving business to legal manufacturers, distributors and retailers”. A general consumer may feel that purchasing a counterfeit handbag is harmless. They may justify this behaviour by feeling that major design houses charge too much money for their handbags, and that with the current state of the economy it would make sense to pay less for a product whenever possible. What a general consumer may not know is that not only does the purchase, production and sale of counterfeit products support terrorism, child labour and job loss but it also has a serious effect on the design houses of Louis Vuitton, Gucci and Chanel.

A Designer's Right to Credibility
The technology for creating counterfeits is becoming easier through tools such as a machine that creates counterfeit sneakers by a CD in a computer. When comparing a fake Louis Vuitton handbag to the real deal there are several differences that can be noted. Louis Vuitton handbags are made with one continuous piece of leather all throughout the bag, in a counterfeit bag there is a seam at the bottom of the bag breaking the design of the leather. Counterfeit Louis Vuitton handbags are also known to manipulate the design of the traditional Louis Vuitton symbol, synonymous with the luxury brand and rather than having the incredible craftsmanship of the original bag, stitches are often broken or uneven. The increased production of counterfeit handbags has largely affected the major luxury brands that design, manufacture and distribute the real thing. As stated by Jill Sultan, Manager of Intellectual Property for Coach, Inc. “Coach looks at counterfeiting as ‘brand tarnishment’ because fake purses have their logo but lack quality in construction and design.” The time, effort and skill that is often put into the creation of a luxury handbag is wiped away every time a counterfeit handbag is manufactured and sold. Consumers may take the skill and work that is put into making a Hermés bag for granted when purchasing a fake one. Some may not realize that the act of creating a counterfeit handbag is no different than stealing a loaf of bread from the grocery store or downloading free music on-line. Producers of fake handbags are illegally profiting off of the design created by a luxury brand and buy purchasing one a consumer is supporting this. Design houses such as, Chanel have employed special agencies to investigate trademark infractions, and have spent approximately $500 or 600 million (USD) a year to fight against counterfeiting but the battle does not end there. In 2007 Italian fashion group, Fendi S.R.L sued Wal-Mart Store Inc.’s Sam’s Club warehouse division for allegedly selling counterfeit Fendi bags. Design houses have been directly affected by the illegal production of counterfeit handbags. Consumers who desire a life of luxury that they cannot afford may feel that they are getting a piece of the glamorous lifestyle that they see depicted in advertisements and celebrity magazines however, purchasing a counterfeit handbag does not do this at all. Luxury brands do not make any profit from the sale of a handbag poorly replicating its exclusive design.

Choosing the Right Handbag 101
Consumers need to be more informed about their purchases and think twice about where their money is going. Unfortunately, the production and sales of counterfeit handbags has yet to slow down. Knock-off merchants are getting stronger and savvier, and the fight against counterfeiting continues. This is why it is more important than ever for consumers to think twice about purchasing a fake Coach handbag on Canal Street. Supporting street vendors supports the growth and continuation of terrorism, child labour, economic loss and trademark infringements of designer labels. The production and selling of a counterfeit handbag is illegal. For someone to recreate a design that is not their original creation and profit from it, is stealing. Each consumer purchase of a counterfeit handbag creates a vicious cycle that supports the negative activities that it is associated with. The price that is paid for buying into a luxurious lifestyle through purchasing a counterfeit handbag is far greater than the $20 that was bartered with a street vendor to get deal for fake a Louis Vuitton bag.

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