The Corporate Citizen, August 2007

Section: Features

Counterfeiting:  The High Cost of Low Cost Fakes

By Kathy Shepard, Social Responsibility Manager, Affiliates, New Balance Athletic Shoe

If your product is popular, chances are very good that it is being produced illegally somewhere throughout the world. Counterfeiting is globally estimated to exceed $750 billion annually.

In our 21st century global marketplace, we are faced with counterfeit or pirated items too many to count, too many to patrol or police. Millions of consumers are being dangerously deceived, and the U.S. economy loses $200 billion a year (U.S. Department of Commerce) from counterfeiting. It is due, in part, to a lack of public awareness and a priority in battling terrorism by law enforcement. 

New Balance Athletic Shoe takes seriously the issue of counterfeits and counterfeiting for many reasons.

Most obviously, we are concerned about our product integrity and brand image. The company has invested millions of dollars in research to develop quality products and technology. Our customers trust that when they see the New Balance name on product, they can expect a product that will perform.

At New Balance, however, we are committed to more that just providing good products.  Incorporated in our mission statement is the phrase "demonstrating responsible leadership." We believe that companies have a responsibility for how they do business.

Our impact on the environment, contribution to the communities where we operate, and concern for our associates and any individual involved with making our products are of foremost concern affecting how we do business. This social conscience comes into direct conflict with all that counterfeiting stands for. 

Until recently, most people weren't aware of the evils of counterfeiting. Health and safety concerns, funding of terrorism, and money laundering are inherent with counterfeiting. The FBI believes the World Trade Center bombing in 1993 was funded by counterfeit T-shirts and sports apparel. In 2003, Interpol provided testimony to Congress that high profile terrorist groups used product counterfeiting as one of their funding methods (Loss Prevention Concepts Ltd.).

More importantly, the public doesn't see the human toll taking place behind the scenes.  Counterfeit manufacturers and wholesalers use unacceptable practices that exploit people in a terrible way. They may operate sweatshops, employ children, pay low wages, provide poor working conditions, and engage in human trafficking and even slavery.  These practices exploit people who are vulnerable and easily violated.  

We work hard to protect our workers and customers who make and purchase our products, as well as the reputation of the company and brand.

And we feel we have a role to be a leader in helping to make this a better world both now and for future generations. 

Back to Aug. 2007 Newsletter