A backyard for counterfeiting brands

Syrian “counterfeit” products competing and being marketed in Turkey

Syrian “counterfeit” products competing and being marketed in Turkey

Enab Baladi Enab Baladi
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The waves of Syrian refugees to Turkey, and their need for products they were used to and which they don’t find in the “foreign country”, pushed a number of “new traders” and business men to produce food products that use the same names to remind Syrians of products that are familiar to them, put them on the market in response to the high demand, and establish new trades but at the expense of the reputation of the original products in Syria.

Chips and biscuits of various types, along with a number of canned goods, carry Syrian product names without having their quality or taste, and have become a popular commodity in the Syrian-Turkish market at a cheaper price (for Syrians) than other products.

The lack of registration and protection of the original brands in the Turkish market was a pretext for “counterfeiters” to justify this operation. Enab Baladi contacted Syrian merchants who own original brands, and others who are counterfeiters whose trade has prospered throughout all of Turkey.

Original producers sue for international protection

“Derby” is one of the Syrian products that has been counterfeited, since a number of traders took advantage of the well-known brand name of the popular potato chips in Syria to put on the market a replica of the original product. The “counterfeit” goods have been found widely in Syrian shops in Turkey and had the same name as the original product with slight modifications, such as adding a word or a letter to the original name.

10 thousand Syrian companies in Turkey

In January 2016, the Disaster and Emergency Management Presidency (AFAD), affiliated to the Turkish Prime Ministry, issued a statement which confirmed that the Syrian capitals and companies which were founded in Turkey in 2015, ranked first among foreign investors in the country, by about 22.3%.

According to the Turkish newspaper “Dünya”, in September 2015, the number of Syrian companies in Turkey reached ten thousand companies, while experts believe that the number of companies exceeds ten thousand, if unregistered companies and companies that have Turkish partners are counted.

The original owner of the Derby chips brand, Kadan & AFSH Company, was the first company to start its business from the city of Mersin in Turkey. After their product gained great popularity, similar “counterfeit” products started spreading on the market. Therefore, the original owner, who holds an international certificate for the product, intervened.

Enab Baladi interviewed Hossam Kadan, the director of the company (Kadan & AFSH), who began by explaining the first stages for establishing the factory (Derby) outside Syria in Amman, the Jordanian capital, in 2011, under the name “Al-Adel Company” after being launched in Syria in 1979 by two traders from Aleppo, Adel Afsh and Hussein Kadan.

The product was recognizable by its red packet carrying the image of “Superman”, and was in first place in the Syrian industrial register.

Kadan said, “We contacted the counterfeiting company (Dadichi), but they never responded. Therefore, we were forced to have recourse to the Turkish judiciary, armed with the Turkish protection certificate carried by our company”.

The trader from Aleppo is still waiting for the judicial response till now. He explained that the “Dadichi” company product, which is called “Derby original”, is counterfeit and does not hold any certificate of protection from the Turkish government, since it only relies on a registration request. Therefore, the original company, Derby,

Enab Baladi tried to contact the counterfeiters of the Derby product, but wasn’t able to get hold of them.

Kadan confirmed that “The fake product is only present at a small range and does not greatly affect the market of the original company. However, it has no Turkish protection, and this is confirmed by the institution responsible for products protection that we always follow”.

The process of imitation is targeting internationally-known product brands. It has also targeted other products such as the “Syrian” tea brands that have invaded the market, as well as marmalades and food cans, coffee, muffins and similar products. Therefore, the trading market has turned into a platform for new trading players.

The counterfeiter justifies his actions and refuses to reveal his name

During our research on the phenomenon of unprotected products in Turkey, Enab Baladi contacted a trader who owns a biscuit company, which is very well known by Syrians in Turkey, to find out his justifications and the methods he uses in manufacturing his product and selling it on the market, although he is using a brand name already used by an original owner. He agreed to talk to us on condition that he does not mention his name nor the associated producing company.

The Syrian trader said, “Before starting to launch any brand or product in Turkey, the work should be legal, to avoid any legal liability by the Turkish government”. He also confirmed that “Most of the traders who work in Turkey do not work in an official and legal way”.

The trader added, “When the owner of the brand works in a regular and legal way through referring back to the associated government departments in Turkey, and issuing a work permit for the factory and the product, as well as marketing it, no one will be able to question him or prosecute him because all his business is legal in the country where the product was launched”.

The trader Kadan responded to what the counterfeit trader said, and considered that “Some Syrian traders rely on a cunning method, which is the right method according to them”.

The counterfeit trader justified his work by saying, “Our business is legal and done in a public and legal way, and no one has the right to hold us accountable, because we have been preparing for our project for two years”.

He also clarified that “Some claim that the name of the product has had an original owner in Syria for twenty years, and the original product should not be imitated (…) We tell him that this applies to Syria, not to Turkey. There are those who have money and want to manufacture the product, so what is the problem with that?”.

However, Kadan explained that “the quality certification of the counterfeit product is easily obtained through conventional processes and issued in Turkey through registration and payment (…) I demand an ownership protection certificate specifically for the brand name”.

However, the counterfeiter considers that “it is not reasonable when a trader sacrifices thousands of dollars in order to manufacture, market, and sell a particular product, that another person who calls himself the owner of the original product emerges to stop this business. This is commercially not logical”.

Counterfeit products lack quality

“Syrians are complaining about counterfeit products, since they do not taste like the original product that was being previously sold in Syria”, says trader Salem Abu Ahmed, owner of a food store in the Esenyurt district of Istanbul.

He also confirmed to Enab Baladi that the products, especially biscuits and chips, which he is selling at his store, lack the quality of the original Syrian products.

He pointed out that “most of the time, goods are returned by consumers because of their poor quality, despite their well-known names”.

Concerning the method Abu Ahmed uses in purchasing the goods and ensuring their quality and their food content before selling them to consumers, he explained that “the first step was to buy products from mobile commercial representatives, since they carry various products in their vehicles”.

He also spoke about fraudulent and counterfeiting methods used by some Syrian merchants. They put stickers with the names of well-known Syrian products, but later, the consumer discovers that they are poor quality Turkish products, which contain the Syrian brand sticker on top of their package.

“Al Qotm”: The backyard for “counterfeit” production

Enab Baladi received information that there is a market in the Turkish city of Gaziantep, called the “Al Qotm” market, which is an unauthorized market that the Turkish authorities overlook. 80% of the Syrian products manufactured and sold in this market are unlicensed.

The market includes factories for the packaging of counterfeit products, such as thyme and oil, to which brand names are easily added onto their packages.

From this market, companies export products to other countries, such as Iraq, as well as to Syria. Manufacturing costs are relatively low in comparison with approved and licensed factories and are far from being threatened by the suspension of their trade.

The counterfeiting does not only involve food products, but this market contains also shops selling shampoos of various types and internationally known brands such as Hamol shampoo, whose producer has no connection with the original product.

Counterfeiters market their products through advertisement

In the context of the commercial operation of brand owners of counterfeit products, the new traders focus their business on the advertising and marketing strategy, whether through Syrian newspapers in Turkish regions or through social media, especially Facebook, which included dozens of accounts for these counterfeit companies, according to Enab Baladi’s own investigation.

To further identify this essential step in the process of marketing their products, Enab Baladi contacted Firas, the young manager of an advertisement newspaper in Turkey.

He explained that “traders market their products through the advertisement newspapers in Turkey, where full pages are reserved for promotion”.

He also pointed out that newspapers are witnessing a large increase in advertisements, with more than 60 advertisements of counterfeit products per month out of nearly 500 advertisements.

Since he is directly familiar with the phenomenon, Firas mentioned some traders who adopt the method of “strikes”, which means “the trader reserves the name of a company making a well-known product in Syria, then sells the name to traders in another Turkish region at an attractive price, which might reach into the thousands of dollars”. He also pointed out that “there is competition between counterfeit products through attracting Turkish companies that sponsor the brand and produce it officially”.

According to the newspaper’s director, the counterfeit trader does not only sell one brand, but rather “sells more than one brand based on certificates of protection that are issued in Turkey, and focuses mainly on international brands, which allows him to own the brand name regardless of legal actions”.

What is the commercial impact of counterfeit brands?

Enab Baladi asked Hossam Kadan, the trader from Aleppo, about the commercial impact of this imitation-based trade process or “brand name theft”.

He explained that “this process is due to the greed of Syrian merchants, which reflects a negative image of the social environment and Syrian trade”.

According to Kadan, “traders who are outside their country have to be positive ambassadors for Syria, and not the opposite”. He called on “any counterfeiter and imitator of a product or who claims he has the ownership right to show the legal documents proving that he owns it”.

However, the Syrian trader we interviewed who refused to disclose his name, said that “all legal matters related to the product must be studied before thinking about starting its production and sale on the market. In addition, it is crucial to sell a good product on the market, which must not distort the reputation of the original product”.

He added, “There are standards that the owner of the product who exports his goods to other countries must adhere to, such as quality certification and health certification, because other countries do not accept low-quality products, especially European countries such as Switzerland and Sweden”.

How are trademarks protected?

A trademark is a special mark or sign, which identifies products or services of a particular company from those of other rival companies on the market.

It can be a single word or a combination of words, letters and numbers. It may consist of images, symbols and signals in terms of the shape and packaging of the goods. It may also be a geographical name, which has to be distinctive. Letters and abbreviations may be used as trademarks to distinguish products or services from others, such as the “BMW” trademark in cars, or “LG” in electronic products.

The owner of the mark seeks to protect it so it cannot be used and imitated by others, especially in light of the spread of numerous counterfeit trademarks that worked on building their reputation at the expense of other trademarks with the aim of making profits.

The owner of the trademark can protect it, either locally by registering it in the property protection department of the country of origin or globally by registering it in the Madrid System.

The Madrid System, which is managed by the World Intellectual Property Organization (WIPO), allows the possibility of providing protection to trademarks in at least 88 countries, along with the European Union.

 

Anyone who wants to internationally protect his trademark must register it in the Intellectual Property Office in the country of origin and then submit an international application through the IP Office itself, which documents the application and then transmits it to WIPO.

When the trademark is registered in the International Register, it is published in the WIPO International Trademark Gazette. Then, the owner of the trademark receives the international registration certificate and informs the IP Offices in all the territories in which he wishes to protect his trademark.

The international registration of the mark shall be valid for a period of ten years. When it expires, it may be renewed in WIPO, and the effect of the renewal shall apply to the Contracting Parties concerned.

The importance of the Madrid System lies in its protection of the trademark in numerous countries of several companies, especially small and medium ones, which otherwise would not be able to internationally protect their trademarks, since it provides less expensive and less complex procedures.

At the local level, anyone who wishes to protect his trademark must apply for a registration request and fill in an application form and hand it to the Directorate of Commercial and Industrial Property Protection, which ensures a strong protection of the trademark, especially in cases of conflict with an identical or similar trademark causing confusion. However, the trademark protection remains limited only within national borders.

Syria joined the Madrid System in 2004. In April 2015, Imad Eddin Aziz, the director of the Syrian Commercial and Industrial Property Protection, stated that there were 140,000 registered trademarks in Syria.

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