Counterfeit goods are flooding the world's markets, but what role can technology play to hoodwink the criminals?
A is for alcohol
In July last year, five men were incinerated in an instant, after the Lincolnshire warehouse where they worked exploded. Chemicals found inside the burnt out unit at Broadfield Lane Industrial Estate in Boston indicated alcohol was being produced illegally. Several months earlier, Trading Standards, HM Revenue and Customs (HMRC) and police seized cigarettes and drink, including counterfeit vodka, from six shops in the town. Lincolnshire County Council said at the time that tests on the fake vodka showed it contained cleaning fluid and was “unfit for human consumption”.
Before this high-profile incident, most people associated bootleg liquor with the prohibition era of the 1920s in America, which led to the rise of organised crime on an unprecedented scale to supply the seemingly indestructible public craving for alcohol.
Admittedly, times have changed, and alcohol is legal and widely available in the UK. However, decades of increasing taxation has made the counterfeit trade highly lucrative - and the case of the unfortunate Lincolnshire five has brought home the problem to the public and increased pressure on the authorities to stamp out this trade.
E&T made a Freedom of Information request to all the trading standards authorities in the UK (excluding Northern Ireland) about seizures of counterfeit alcohol, and figures indicated a dramatic increase in activity.
Of the 110 trading standards authorities who were approached, 82 responded. Between June 2008 and June 2009, they reported 31 occasions where counterfeit alcohol was seized. Between June 2010 and June 2011 - just before the Lincolshire blast - there were 158 such occasions, a five-fold increase in just two years.
According to HM Revenue & Customs sources, the evidence points to organised gangs, who are setting up factories and making alcohol on an industrial scale, often in unhygienic conditions, which then gets shipped out to off-licences, pubs and clubs.
In February 2011, trading standards officials reported the results of spot-checks around the country and claimed that up to a quarter of licensed premises in parts of the UK had been found to have counterfeit alcohol for sale.
In a series of raids of licensed premises at the end of 2010, 26 per cent of outlets were found to be selling counterfeit alcohol in south west England, 17 per cent were doing so in Manchester and around 10 per cent in West Yorkshire. Information was unavailable for the rest of the country.
The officers claim it is a growing problem nationally. Alcohol fraud costs the UK about £1bn a year in lost revenue, including £300m from illegal spirits sales, according to government estimates.
In October 2010, HMRC officers seized 25,000 litres of counterfeit vodka, along with bottling and labelling equipment at Cheetham Hill, Manchester; in March 2011, more than 11,400 litres of counterfeit alcohol were seized at an industrial unit in Worcestershire; in October 2009, a major counterfeit vodka manufacturing and bottling plant was dismantled in Leicestershire, UK, where 10,000 litres of fake vodka was seized with 35,000 litres of pure alcohol - enough to make 100,000 litres.
Despite these and other high-profile raids, customs officials admit that the best that they can do is to disrupt the trade rather than halt it.
Gavin Partington is the chief spokesperson for the Wine and Spirits Trade Association (WSTA). He says he would not be surprised to find that the current problem is significantly under-reported as trading standards authorities are stretched
“The larger drinks companies have the facility to process and analyse suspected counterfeit sources and actively cooperate with the police and customs officials,” he says.
Public Health Concerns
The National Institute for Health and Clinical Excellence (NICE), is the UK body responsible for developing guidance for NHS authorities, local authorities, and others in the public, private and voluntary sectors, including patients and the public. A spokesperson for NICE stated that they have no specific guidelines for the monitoring of the adverse health effects of drinking counterfeit alcohol - which could have dangerous levels of methanol and other substances.
Without any guidance, there is no compulsion for A&E departments within NHS authorities to record or even investigate instances of alcohol poisoning related to fake alcohol.
This is further compounded by the lack of a formal method of communication on the issue between health workers and the drinks industry, other than providing a public ‘hotline’ to report suspected counterfeit alcohol and the most basic guidance - such as looking out for spelling mistakes and other obvious discrepancies.
Much of the advice that the drinks industry offers is aimed at the general public - and the anti-counterfeiting technology they are willing to talk about is ‘overt’. This is for the public to authenticate themselves whether the product they are purchasing is genuine.
However, many of these techniques, such as hologram stickers, have been around for years and are easily forged. Covert anti-counterfeiting technologies are not available to the general public. There are lines of communication open between HMRC, trading standards authorities, the police and the drinks industry in using them, but they exclude health authorities from the equation, meaning that health workers are unable to investigate the source of suspected alcohol poisoning from a counterfeit source if they chose to do so.
This is in stark contrast to the authority’s strategy and attitude to counterfeit drugs - where there is significant cooperation between the authorities, drug companies and health officials.
In other countries, where the problem of counterfeit alcohol is more widely recognised by the health authorities, cases of alcohol poisoning from counterfeit sources are likely to be more widely reported.
For example, in May 2011, poor-quality alcohol served at the bar on a yacht voyage from Bodrum to Antalya, Turkey, led to the deaths of five Russian tourists, and the hospitalisation of 20 more, some of them in a critical condition. The alcohol turned out to be counterfeit and contained large quantities of methanol - which is also widely used to make counterfeit alcohol in the UK.
More recently, counterfeit alcohol poisoning led to the deaths of 17 people in southern India during New Year celebrations - according to local officials. Doctors idenfied large amounts of methanol in the drinks. This was the second case of counterfeit alcohol poisoning in India in recent weeks. In mid-December 2011 some 170 people died in the West Bengal region of eastern India after visiting a low-price bar.
The drinks companies are themselves reticent to talk about the covert technologies they deploy. Richard Burhouse, business development manager for Payne Security, suggests that ‘taggant’ authentication solutions are used to identify and distinguish genuine drink products and brands from counterfeit products.
Taggants are chemical markers, typically manufactured using complex rare-earth phosphor compounds that are extremely difficult to source or replicate. When engineered at molecular level, these compounds emit a unique signature under certain conditions.
For many taggants, the trigger is excitation by infrared radiation. Others may only be visible under a microscope - a type of ‘nano-barcode’. This type of technology was originally deployed to trace and identify plastic explosives such as Semtex.
The technology can be used to identify and distinguish genuine drink products and brands from counterfeit materials. Due to their size, taggants can easily be included in inks, lacquers, or plastics. They can also be embedded in packaging materials, such as cartons, overwrap, labels and tapes, which is particularly relevant for the protection of drink products.
The absence of a generic model for taggants significantly enhances their effectiveness as a security device. The specific and unique composition and structure of each taggant makes it almost impossible to replicate (without having prior knowledge of the molecular structure).The success of a taggant hinges on the manufacturer’s control over supply. In order to ensure a high level of security, taggant manufacturers must maintain a tight control of their chemical combinations, preventing third-parties from acquiring the taggant.
A recent development in covert anti-counterfeiting is the use of laser marking. The most sophisticated technologies are deployed in the packaging of higher-ticket items such as vintage wines and spirits. One such technology is revolutionising the industry: a laser that can write on the inside of glass without damaging the outside.
Axel Kupisiewicz, founder of Trackinside, which makes the laser, says: “We have developed a laser technology that allows us to make markings inside transparent materials without damaging them in any way….there are no fissures, no cracks, nothing. And we’re not using any additives, like ink, so there are no consumables. We use nothing but laser to put the hologram inside the glass.”
The laser system etches a unique code below the surface of glass containers, at a rate of 10 engravings per second. The focused laser beam leaves permanent marks that do not weaken the container and can easily be read by a computer. A camera then captures the code and puts it on screen, allowing the system to decode the information contained in the data matrix. It can also check the anti-counterfeiting data included in the code.
Since the incident in Boston, the heightened awareness has meant that the authorities are keener to be seen to be acting. This was evident when public health warnings over drinking counterfeit alcohol appeared was issued during the Christmas holidays and the new year.
Trading standards officers at Horsham in West Sussex alerted residents following a seizure of Drop vodka, Red Admiral, Arctic Ice and Spar Imperial which contained the industrial solvent propanol. Smirnoff and Glen’s vodka had also been copied with bottles containing 52.5 per cent alcohol despite the label’s stated 37.5 per cent.
People in the Wokingham were also alerted to a consignment of 700 one-litre bottles of Drop vodka which, when investigated by trading standards teams, contained chloroform.
Salford city council’s trading standards team seized 89 bottles of counterfeit Smirnoff and 15 bottles of Drop vodka this autumn. The drinks were found to be unfit for human consumption.
One in five independent off-licences in Staffordshire were found to have been selling counterfeit alcohol when the county council launched an investigation after reports of people’s throats burning after drinking certain types of vodka. About 1,800 bottles were seized from 73 stores and found to contain high levels of methanol.
St Helen’s borough council recently launched two prosecutions against licensed premises for selling substituted Smirnoff vodka. Earlier this month, a bar owner had his alcohol licence suspended for a week and was fined £200 with £1,000 costs.
Nottinghamshire county council’s trading standards found cleaning fluid and methanol in bottles of counterfeit vodka on sale at two off-licences in Mansfield.
The examples demonstrate that trading standards officials are stepping up their activities in relation to counterfeit alcohol - despite their finite resources. Counterfeiting in the clothing and fashion industry has often been the focus of trading standards officials. However, for the year up to June 2011, there were up to 166 occasions where counterfeit clothing was seized - down from 267 the previous year.
This suggests that occasions where alcohol is seized will overtake clothing and will be seen as the number one counterfeiting problem in the UK. But the country still lacks a joined-up policy involving the Health Service. Without this, it’s likely that many cases of alcohol poisoning that are the result of drinking counterfeit alcohol will go unreported.
“A growing number of patients come into accident and emergency thinking their drinks have been spiked, when in fact they have drunk fake alcohol,” says Vikas Sodiwala, a consultant at Lincoln County Hospital. “Victims suffer severe abdominal pain. Drinking substances like this can lead to liver and kidney failure. You could end up blind or even dead.”
But the other important issue are the working conditions the people who work in these factories have to endure. The evidence from the UK Borders Agency and the Serious Organised Crime Agency (SOCA) suggests a direct correlation with human trafficking, drugs, prostitution and slavery.
John Erskine, from the Merseyside Police Counterfeit Alcohol and Tobacco Unit says: “The fakes are funding human trafficking and terrorism, not just in Liverpool, but all over the UK. Right now it’s impossible to say how much is coming into the country.
“There is a jail sentence to people caught smuggling fakes; the government takes it very seriously. We need people to realise that buying these are helping to fund very serious organised crimes,” adds Erskine.