India’s largest fast moving consumer goods company Hindustan Lever Ltd claims it is losing at least Rs 1,250 crore in revenues each year on account of counterfeiting. “The total loss to the FMCG industry is Rs 2,500 crore annually due to counterfeiting. Since we are the largest player in the industry, our share is more than 50%. The exchequer too loses around Rs 900 crore as revenues, due to loss of sales tax and excise duty,” said HLL vice-chairman MK Sharma at a press conference on Wednesday.
He called for the setting up of a special task force at the state level for combating this. “This will not only ensure that they have adequate time but also help them build-up expertise,” he said.
Calling for more vigorous implementation of existing laws, he said: “in my opinion, the existing laws are good enough, but need to be implemented more vigorously.” According to him, about 50% of counterfeit goods (by value) originate from Delhi’s Sadar Bazar. HLL now has 20 law officers to help it combat this menace and it has set aside Rs 10 crore annually for the same. “Spurious brands not only erode the goodwill of the company but also harm the consumer. In this case, there was no conflict of interest between manufacturers and consumer protection groups,” said Mr Sharma. HLL is now working with consumer organisations in Ahmedabad and Delhi to address spurious brand issues.
Meanwhile, it is planning a national rollout of Project Shakti, its initiative for reaching the rural consumers through empowering women. The project is now present in 12 states. “The project will first be fine-tuned and then launched nationally,” said Mr Sharma. The national rollout is to be completed by end 2006. Now there are 12,500 entrepreneurs under the project, which is expected to be doubled.