Fake Products Flood Armenia

Thursday, 31 July, 2003

The link has been copied

Tigran Avetissian

Want a Pierre Cardin suit at bargain prices? At the street market in Yerevan you can buy one for 60 or 70 US dollars. A Versace? No problem, the price will be around the same.

A few days later, you will notice your suit does not look so sharp anymore. Some seams begin to rip, and buttons start falling off. Then you realise the big-name label was simply attached to a locally made product.

Armenia is at a loss as to how to deal with a flood of counterfeit products and government shows no signs of being able to tackle the problem in the near future.

"Some 50 per cent of what we think are imported goods are actually made in Armenia," Armen Pogossian, chairman of the Armenian Consumer Rights Society, told IWPR. "Moreover, in many cases, the goods imported into Armenia are already counterfeit."

Pogossian, who worked as an expert for the president of Armenia for many years, blames the problem on lack of proper state control. "Market vendors pay for their space, but no one will ask what they are selling, where the merchandise comes from, and what it's quality is like. They are not responsible for that," he said.

But why is it so hard to establish proper controls? "A draft bill on outdoor vending was drafted and submitted to the parliament a long time ago, but the deputies seem in no hurry to pass it," explained Pogossian, adding that the new legislation is unlikely to solve the problem completely. "The roots of this problem lie very deep, and its inertia is strong. It will take time to fix."

The counterfeiting business is hitting honest importers. Tsolvard Gevorkian, chairman of the Armenian Merchants' Union, complained, "Those who wish to buy a genuine product distrust everyone, including ourselves."

Gevorkian added that in an environment like this honest business cannot succeed. "The only way to avoid being ripped off is to shop at brand-name stores," he said.

The Nushikian Association, headed by Garegin Nushikian, operates a chain of brand name shops. "We sell the goods we import through our own chain of stores," he told IWPR, adding this is a good way to protect your business from the corrupt influence of a pirate-infested marketplace.

Meanwhile, Pogossian has some useful tips for demanding shoppers. "If you look at the seams of a genuine brand name product, you will never see loose thread ends, not even on the inside. Fakes have lots of those." Pogossian also advises examining the labels, saying fake ones are usually poor quality, sometimes with spelling mistakes. And, finally, beware of brand name products offered for cheap, he says.

The government admits that the problem is still beyond its control. Armine Udumian, head of the press office of the Government Commission on Fair Competition, told IWPR that under Armenian law, counterfeit labels are recognised as "unfair competition" and must be punished. "However, our commission is unable to fight a great number of fake products," Udumian said. "This is up to those firms whose business is threatened by counterfeiters."

Udumian said these firms have a duty to alert her commission, which will then act accordingly, but admitted Armenian law does not punish counterfeiters very harshly. "The worst they can get is their proceeds from selling fake products will be seized by the government," she said. Based on the commission's report, the honest firm can also sue the counterfeiter for damages.

But the procedure is so prohibitively complex the few companies that have used it now regret they did.

A newly established body, the Quality Inspection Office, set up by the Ministry of Trade and Economic Development, has a remit of monitoring products on sale in Armenia, but the head of the organisation, Ashot Manukian, declined to give any more information about it.

Arsen, 28, sells shoes marked "Made in Italy", at a neighbourhood street market. He swore his shoes were actually made in Italy. "I don't know who makes them, but the guy I get them from travels to Italy to buy new stocks twice a month," he told IWPR.

The choice is to either take Arsen's word for it, or not buy his "Italian" shoes at all.

Other vendors were more honest about their wares. Many of them do not even wait for the customer's question before saying, "Don't even look at that label. These shoes were made locally, but they're good. I've been wearing my pair for two years, and they still look as good as new."

Susanna, 52, has been a market vendor in Yerevan for over ten years. She seemed surprised when I brought up labels. "Don't you know they glue fake labels on to sell the merchandise. No one would pay this kind of money for a local pair of shoes," she said, adding that Armenian-made shoes are high quality, and can easily pass for Italian, Valentino, for instance.

"To those who really want to know, I will always tell the truth," said Susanna. "Sometimes it pays off to be honest. I will tell my customer: you wouldn't expect to pay anything less than 80 dollars for a pair of genuine Valentino shoes. These are 30 dollars, and fake. Take them or leave them."

Every line of products has its own specific problems.

When it comes to car parts, 90 per cent of the cars on Armenia's roads are still Russian-made. But Russia is a foreign country now, and imported car parts don't come cheap.

In most auto parts outlets (especially, auto markets), you can see hoses and axles you know were made in a basement nearby, bearing Russian or Ukrainian labels.

Vahan Nazaretian, 35, drives his own Lada for a Norwegian company. "I've used a lot of cheap parts in my day, but now I'm prepared to pay more for a genuine part," he said. "I used to buy fuel inflow pipes for around a dollar each. They broke down fast, and I had to buy three or four of them a month." Now Vaan pays just under three dollars per inflow pipe, and it serves for around 12 months.

Saiad Saiadian, an auto parts expert, told IWPR around 70 per cent of car parts on the market are rip-offs. The biggest problem is that you can buy a fake product even at a certified store.

When it comes to food and drink products, some Armenians are more optimistic.

According to Frunze Aitian, a food retail auditor with the Armenian Consumer Rights Association, "No need to worry about local produce anymore. Local meat, dairy products, fruit juice and alcoholic beverages are usually fine, and local produce dominates the market."

Aitian warned, however, against foreign food products and particularly vodka, "Foreign brands are ripped off more often. Apart from fake vodka, I've seen fake sausage allegedly made by the famed Moscow meat packer Mikoyan, and fake Russian salmon caviar."

There have been instances when Armenian drinkers poisoned themselves with fake Stolichnaya or Kristall vodka. Levon Gukassian, a doctor, recalls a mass poisoning outbreak in the town of Ashtarak in 2001. "We did what we could to save them, but two people lost their eyesight," he said.

Gukassian advises shoppers to exercise extreme caution when shopping for alcoholic beverages, "You can discard a fake suit, but fake vodka can blind or even kill you. That's irreversible."

Tigran Avetissian is a journalist for the Aravot newspaper in Yerevan