FOCUS 21
Take responsibility
The big problem globally is that law enforcement agencies have less money and less time to take as much action as everybody would like.
There are lots of good examples of governments working very hard to stem the trade of illicit products. The Food and Drugs Administration in the US used to bring about 10 cases a year against pharmaceuticals counterfeiters, and they’re now up to 60 a year. We’ve seen a huge rise in the number of seizures of container-loads of tobacco around Europe in the last few years, but none of that has stopped the actual rise in counterfeit and contraband products coming into developing countries and developed countries
Businesses faced with this problem have been tackling this in a piecemeal way. They have carved up their activities into governance aspects (asking lawyers to pursue cases) or tasking their corporate affairs departments to lobby government, or looking to marketing to better protect the brands.
Organisations that tackle this well take complete responsibility for combating it, rather than waiting for a government agency or an international standards organisation to do it for them. Fundamentally, organisations have to design an operating model that combats illicit trade.
Use technology
In pharmaceuticals, there is a massive push by the European Federation of Pharmaceuticals Industries and Associations to standardise the track-and-trace technology, which will make pharmaceuticals comply with the Safe Medicines Directive.
In tobacco, they are a couple of years behind that trend, and are now only tackling the problem of setting standards globally for track-and-trace for tobacco.
In drinks, the activity is more sporadic. The UK government has just given support for track- and trace supply chain protection to the whisky industry in Scotland.
So much illicit trade can be done over the internet. A vast amount of the fake pharmaceuticals that get delivered to developed countries are ordered over the internet. But the point is that, supply chains can now be controlled through technology, and track-and-trace can now work right down the supply chain, down to pack level or product level, meaning that products can be tracked from manufacture, through wholesale, through distribution, right to the end consumer. End consumers can be much more confi dent if there is a track-and-trace standard applied that what they’ve got is genuine.
Robin Cartwright Partner, UK Head of Anti-Illicit Trade T +44 (0) 20 7311 4592 E:
robin.cartwright@
kpmg.co.uk
Robin is a Partner in the KPMG Strategy Team. He has specialised in measurement and management of illicit trade for major consumer goods companies including the Project STAR report on illicit tobacco in EU28, which has been described as the benchmark on illicit trade measurement by OECD. Robin also advises on strategic and supply chain (track and trace) solutions across the tobacco, drinks and pharmaceuticals industries. Robin joined KPMG from The Security Service (MI5) where he was a Principal responsible for counter-terrorism.
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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ILLICIT TRADE
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