Most consumers believe that they get fair bargain by the massive bargain gap of counterfeit goods compared to genuine products. Eventually, the consumers end up paying the costs of unfair competition, low value of the goods and poor quality. The associated cost arises from the health related impacts of counterfeit non long lasting of the goods and thus constant replacement and loss of important revenue for development and growth of the economy. Hence, they end up paying an excessive price for an inferior product (Durham, 1996).
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The effects of inferior quality products related to health and safety are disastrous, workers in counterfeit companies are in most cases exploited and work in very poor conditions, counterfeiters also use the services of child labor, and the workers are also exposed to various risks including arrest and prosecution. Durham(1996) states that the workers of the counterfeiters are generally poor.
Perhaps in social terms the real damage suffered by businesses due to counterfeit are reflected on its impact upon employment. Employment levels may increase in the country where counterfeit products are produced. However, this growth of employment level does not create any meaningful economic impact to the employee since they are exploited in most cases. At the same time in the country where the counterfeit products will be marketed and sold, infringing products greatly affect employment. For example, the sale of fake batteries in Kenya from China creates employment in China but has led to massive loss of employment in Kenya’s Eveready Battery Company (Martin Eisend, 2006).
The prejudicial downgrading of the reputation and originality of the genuine products due to counterfeits has led to businesses incurring extra costs of running awareness clinics, anti- counterfeit campaigns, brand protection costs investigation and expatriates opinion in the dispute resolution and in certain cases may even lead to tort actions against the de facto right holder of the products marketed by the counterfeiter or pirate where the proof of good faith is in doubt