Fake pesticides deal severe blow to EU economy, report says

Germany and France are champions in losses due to fake pesticides in their markets. [Teddy Llovet/ Flickr]

Counterfeit pesticides take a significant toll on the EU’s industry, tax revenues, and employment levels, a new report has found.

The report, published yesterday (8 February) by the EU Intellectual Property Office (EUIPO), estimates that legitimate industry loses about €1.3 billion of revenue annually due to counterfeit pesticides, while the direct impact on employment is also significant.

Particularly, the survey notes that approximately 2,600 direct jobs are lost in the EU and taking wider implications in account, lost jobs could reach 11,700.

“If the knock-off effects on other industries and on government revenue are added, when both the direct and indirect effects are considered, counterfeiting in this sector causes approximately €2.8 billion of lost sales to the EU economy,” the report reads.

Antonio Campinos, executive director of the EUIPO, commented that counterfeiting could affect every economic sector, and the pesticide manufacturing industry, which includes a large number of small and medium enterprises (SMEs)

The report notes that 400 out of 600 EU pesticide companies are SMEs employing less than ten workers and generating 38% of the sector’s total turnover.

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Big losers

Germany and France are champions in losses. In a sector that is worth €4 billion, the German pesticide industry loses €299 million and 500 jobs per year.

Similarly, in France, which is the second biggest producer of pesticides in Europe, manufacturing loses an estimated €240 million in sales and 500 jobs each year.

Italy, Spain and the United Kingdom lose €185 million, €94 million, and €76 million every year, respectively.

Environmental impact

The European Crop Protection Association (ECPA), a trade group representing the pesticides industry, goes further, pointing out the potential environmental impact of counterfeit pesticides.

Graeme Taylor, ECPA’s director of public affairs, stressed that in addition to the lost revenue there is also an effect on the environment and the health of people that use them.

“At a time when our industry’s products are rigorously tested and scrutinised, both politically and scientifically, the European Commission and national authorities should be doing more to combat illegal and counterfeit products, rather than arbitrarily reducing the legitimate number of products on the market,” he said.

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Taylor explained that through smuggling or under the cover of parallel imports these fake products enter the EU market in an illegal way and come in various forms as a bulk consignment of pre-manufactured concentrate, or in fully finished packed goods.

“The packaging itself can be with basic labels without user instructions or have a very well designed copy of the original labeling. It’s important to note that these products are untested and violate the strict EU regulations that ensure that the substances would have no unacceptable risk to the farmer, their crops or the environment,” he warned.

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