Counterfeit CDs Worry IT, Cell Phone Vendors

RIYADH, 8 July 2007 — Several IT and cellular phone vendors have called on the government agencies to impose tighter restrictions to check the sale of counterfeit IT products and cellular phone accessories following the raids on two local stores here.

A large number of resellers have been found to be involved in this multimillion-riyal trade of counterfeit products, said Hassan A. Abdul Waheed, a local supplier.

The call to check fake products came after data-storage products vendor Imation decided to take legal action against two resellers. This led to the raids conducted by the inspectors of the Commerce Ministry on the stores, which resulted in the seizure of over 98,000 fake CDs and DVDs last week. This is in addition to a similar raid conducted at the local Mursalat market, a favorite spot for selling and buying cellular phones.

Referring to the raids conducted by the ministry’s inspectors, Riyaz Abdulla, regional manager at Imation Middle East and East Africa (MEEA), said: “We are very grateful to the authorities at the ministry for their cooperation and their initiative in protecting the consumers and the Imation brand name.”

Abdullah said Imation did not have a big problem in the region with counterfeit goods, but that some resellers continued to ignore warnings. “We are not to protect our brand only, but also support our legitimate channel and our customers who rely on Imation quality,” he added.

The initial raid targeted one store but was then extended to a second which led to the seizure of a further 20,000 CDs in the capital city. A salesperson at the second store ran away from the shop, when he was being questioned by the inspector about the suspect goods, said an eyewitness.

The Imation executives said it thought the fake CDs and DVDs originated from China. The ministry and intellectual property firm Xeno IP also worked on the case. Referring to the practice of selling fake products, Noor Muhammad Arshi of Samsung Digital, said: “We have been facing same problem; fake monitors and printers in the name of Samsung are also sold in the local market and it is a growing problem.”

Also, a recent report uncovered literally hundreds of counterfeit mobile phone accessories on sale in all the Gulf states, including Saudi Arabia.

“The accessories, which included vendor branded batteries, chargers, headsets and handset cases, were generously stocked on shelves, and were quite often co-located with original products, despite outnumbering them at times by 10 to one,” said Naeem Jameel, marketing manager at Hana Al-Meshari Trading.

He said regional trade in counterfeit accessories is costing vendors and distributors millions of dollars in lost revenue. “Moreover, it is interestingly amazing to note that retail staff in the local stores are happy to identify fake goods from originals, and offer huge discounts for bulk wholesale orders,” said Jameel, while referring to the trend of counterfeiting, which has taken deep roots.

Despite recent crackdowns, counterfeit phone accessories and batteries continue to be sold out. A report quoting Techmart President M.P. Sharma said counterfeit mobile phone accessories, particularly batteries, pose a major threat to the safety of consumers.

“It is a major safety issue that consumers need to be made aware of,” the report said, while adding: “Ninety percent of all mobile accessories sold in Saudi Arabia are not genuine.”

The president of Samsung Gulf Electronics, Jehyoung Park, said Sharjah and Jebel Ali Free Zone have become major hubs for the importation of counterfeit mobile phone accessories.

Meanwhile, Saudi Customs has warned importers against getting implicated in customs smuggling operations or in importing counterfeit or goods that bear fake certificates of origin and that could mislead the consumer.

According to statistics of the Jeddah Port Customs Office, cases related to trade fraud during the past two years totaled 371, with over SR12 million worth of fines imposed. Several such cases involving counterfeit products have also been registered in Riyadh and Dammam in the recent past.

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