Possibilities and purposes of Internet
usage: authentic and fake Italian food
products
Marco Platania, Donatella Privitera
DiSTAfA- Department of Agroforestal and Environmental Sciences and Technologies - “Mediterranea” University of Reggio Calabria - Italy [email protected]; [email protected]
Abstract
Counterfeiting is a growing and increasingly dangerous phenomenon. The latest Customs statistics
published by the European Commission show that counterfeiting and piracy continue to be a alarming
threat in Europe. The agrofood italian production, famous all over the world for their qualitative
characteristics, it reenters among the products that are imitated. The aim of the paper was to investigate
the level of the “Italian Sounding” of the products sold via e-commerce, which often leads consumers to
believe they are buying genuine “Italian” goods The carrying out of the study foresees, initially, to
consider the volumes of counterfeit commodities to world level. Subsequently the main features of the
companies using the internet an e- commerce for selling typical Italian fake products will be analyzed. It
will finally be tried to define the degree of imitation of the site analized.
Key words: agri-food sector, fake, Italian Sounding, e.commerce.
1. Introduction
On the international scene Italy is one of a number of countries which possess a rich and varied
agricultural and food heritage. The food industry plays a significant role in the Italian economy in terms
of both turnover and employment, and is of strategic importance not only to meet domestic requirements
but also on account of the export capacity it offers.As is known, food production in Italy is increasingly
oriented towards quality, especially in the form of certified products, both traditional (i.e. those
recognised by the Ministry for Agriculture) and organic. In 2005, the turnover for sales of these products
was 30 billion 560 million Euros, representing an increase of 2.8 per cent as compared with 2004. Export
figures were also considerable, amounting to over 4 billion 678 million Euros, an increase of 10.3% on
2004 (MIPAF, 2005). Currently there are over 700 certified PDO (Protected Designation of Origin), PGI
(Protected Geographical Indication), and TSG (Traditional Speciality Guaranteed) products in Europe
(including wines) and as many again awaiting recognition by the EU. The economic strength of these
products is significant above all in Italy, the European leader in this sector, with 155 recognised products.
In this context, Italian food products are often counterfeited and imitated. The former case refers to
adulterated products, obvious fakes, the misleading use of geographical origin or counterfeited sell-by
dates; the latter refers to the use of “Italian Sounding” (IS) names or images. In reality the problem does
not only concern food products: the phenomenon has reached enormous proportions, affecting products
of all kinds, violating intellectual property and thus becoming a legally pursuable offence. The aim of the
paper was to investigate the level of fake products sold via e-commerce, which often leads consumers to
believe they are buying genuine “Italian” goods. Reference to Italy, its history, its symbols and its culture
is, in fact, of great appeal. The “Made in Italy” label is a strategic trademark which induces consumers to
purchase products even though they are not original. The survey thus tried to gain insight into the
categories of food products that are the most imitated, the attractive “Italian” elements that are exploited
to induce consumers to buy non-original products and the technological characteristics of the businesses
offering these products on the Internet.
2. The value of counterfeit products
It is difficult to quantify the flow and provenance of counterfeit products at a world level. In past years
the Counterfeiting Intelligence Bureau set up by the International Chamber of Commerce (ICC), stated
that the value of counterfeit goods ranged between 5-7% of worldwide trade, amounting to 200-300
billion Euros a year (Counterfeiting Intelligence Bureau 1997). More recent studies claim that the sale of
counterfeit products or reproductions represent as much as 9.5 of world trade (IPI 2004). As far as the
European situation is concerned, according to a report published by the European Commission’s Taxation
and Customs Union Office, in 2005 38% of products intercepted entering the EU came from China, 10%
from Thailand, 8% from Hong Kong, 7% from Turkey, 4% from the USA, and 33% from other countries.
This is certainly destined to grow: counterfeit products seized in 2005 represented an increase of 118 per
cent as compared with the previous year. These phenomena are in practice difficult to measure: EU
statistics make it possible to quantify the overall amount of products seized by EU customs authorities,
but they are lacking in detail as food products are not grouped specifically but generically classified as
“foodstuffs, alcoholic and other drinks”. With all due caution as to the reliability of the data, it is still
possible to trace certain trends in the phenomenon being observed. In the European food sector, there has
been a constant growth in counterfeiting in the last five years, going from 10 cases of products seized by
customs authorities to 50 cases in 2005. The number of items seized went from about 2,350 million to
5,230, and the percentage of food products seized as compared with the total went from 4% to 7%. If we
observe the provenance or origin of the food products seized (Tab.1), it can be seen that the countries
most involved are Turkey, China and Thailand, which correspond in substance with the provenance of
counterfeit products in general. A surprising finding is the high value attributed to “other countries”,
which would suggest that although some countries can be defined as leaders in the field of counterfeiting,
there are a series of satellite countries producing counterfeit goods, albeit in lesser quantities (Nicoletti et
al., 2007).
Tab. 1 - Number of cases expressed as % by origin
Origin
Number of cases
2000
2001
2002
2003
2004
2005
Turkey
20%
33%
10%
18%
16%
China
10%
17%
20%
6%
8%
Thailand
11%
20%
Poland
20%
18%
Czech. Rep.
10%
Spain
10%
6%
Japan
10%
Chile
10%
18%
Ukraine
12%
13%
10%
Honk Kong
10%
Indonesia
10%
6%
Iran
10%
Greece
10%
Russia
13%
12%
Dominican Rep.
9%
USA
6%
Hungary
4%
Argentina
4%
Others
20%
39%
22%
51%
48%
Total
100%
100%
100%
100%
100%
100%
Source: data processed on basis of information from European Commission — Taxation and
Customs Union.
As regards Italian food products, it is again difficult to provide an estimate of the economic damage
caused. According to Federalimentare (Tab.2), the Italian Federation of Food Industries, it can be
quantified, at least as far as the American market is concerned, as amounting to 1,510 million Euros, i.e.
70% of the corresponding value of the counterfeit products (Federalimentare 2003). From analysis of the
data it is evident that there is a lack of balance between the level of the counterfeit phenomenon in the EU
and in North America. Also evident is the economic damage, in terms of exports, suffered by Italy, not
least in consideration of the fact that the phenomenon is rapidly expanding; despite cautious estimates
which do not predict geometrical progression (i.e. annual figures constantly doubling), Federalimentare
estimated that a threshold of 5.4 billion Euros would be reached in 2006.
Tab. 2 – Estimated consumption of illegal products (2002)
Area
Export
Estimated consumption of illegal fake products –
protected Italian designations
Value
Value
Inc. % export
USA + Canada
2.157
1.510
70
European Union
8.443
422
5
Other countries
3.345
668
20
Total
13.945
2.600
18,6
Source: Federalimentare (2003)
3. Methodology
The aim of the investigation was to study the trend towards using explicit reference to Italy to sell food
products on the Internet, persuading consumers that what they are buying is actually “Made in Italy”. By
fake products we mean food products with explicit references to Italy on their labels or packaging (e.g.
Italian colours, geographical references, etc..), but whose origin and/or place of manufacture and/or
method of preparation is not Italian. The investigation required a preliminary census of the businesses
trading Italian, or apparently Italian, products on the World Wide Web. Certain rules of selection were
defined: more specifically, that the websites were not based in Italy, that they were involved in ecommerce (thus eliminating “showcase” sites with exclusively promotional aims), and that they proposed
the purchase of at least one product with “Italian sounding” features (Bertozzi 2006). Three search
engines were used to identify the sites (Google, Msnsearch and Yahoo), inputting appropriate keywords
(e.g. Italian food, Italian pasta, etc..). The search was extended down to the fifth page of results and
yielded a total sample of 30 cases. The fake products were selected by category: once the presence of a
homogenous product category was detected the search was halted. This explains why many of the sites
analyzed offer few Italian Sounding products. These products do, however, represent a broader class of
products. The data was collected on specially prepared datasheets containing information about technical
and marketing variables, such as the presence of a webmaster, FAQs, mailing lists, an internal search
engine, a personal domain, the transaction methods used to purchase products, foreign language options,
and information about the imitation of Italian products (company history, product image, Italian
production processes, reference to names of Italian origin, etc..). The data was initially processed via
descriptive statistics in order to have a detailed view of the phenomenon being investigated, and
subsequently by means of indicators, thanks to which it was possible to outline the sales behaviour of
online businesses and their use of “Italian” references. More specifically, the degree of “Italian Sounding”
references (IS) was calculated, giving each reference to Italy a score according to the following variables:
number of IS products; number of IS references on packaging; the presence of IS references to Italian
products protected by quality certificates; references to Italy in the website presentation.
4. Results
4.1. General characteristics of the websites
The results yielded a sample of sites, almost all specialising in the sale of food products. As far as the
product categories are concerned, the most frequent types of product on sale are pasta, sauces and
cheeses. This is probably due to the keywords used in the sampling stage. As far as the technical
characteristics are concerned, most sites seem to meet the basic requisites of surfability and accessibility:
almost all have a personal domain (96,7%), testifying to a clear decision to use the Internet (Fig.1).
Accessibility for foreign users is infrequent: only 16,7% of the sites offer options in other languages.
Certain online marketing tools are rarely used, for example mailing lists, which are useful to increase the
degree of client loyalty. Finally, 60% of the sites have their own search engine: this is of particular
interest as it indicates a highly professional technical approach to setting up – and above all updating –
the sites.
Fig. 1 - Principal characteristics of the websites studied
Another important feature to point out is the ways in which these businesses actually sell their products
(Fig.2). Most (80%) sell by telephone order, i.e. offline: this is demonstrated by the presence of “Contact
Us” in almost 90% of cases. Only 40% sell online with payment by credit card. Images and descriptions
of the products, key selling points, are the most frequent form of information given and guide consumers
in their choices. Presentation of the company, which is necessary in a virtual market to make the
producer-consumer relationship more tangible, is also frequent (83,3%). It also provides information as to
the geographical location of the companies involved, which in 90% of cases is in the USA. Other types of
information, such as Help facilities and FAQs, are not widespread: 13,3% of cases for the former and
30% for the latter
Fig. 2 - Principal characteristics of the websites studied
4.2. Degree of “Italian Sounding” references
The investigation then evaluated the “Italian sounding” signs, symbols, labelling and images used by
manufacturers to make their products look original. The phenomenon is widespread on the sites
examined: the product categories most frequently imitated (Tab.3) were cheeses (25%), especially
parmesan and mozzarella (the most frequently used Italian names) and preserves and sauces. These are
followed by pork meat products, the most frequently imitated product being salami (20%). Pasta products
also occupy a good position (19,2%). 11 cases (36,7%) were obvious fakes of Italian PDO and PGI
products protected by EU quality certificates. The main “Italian sounding” elements used on the
packaging of fake products (Tab.4) are use of the original Italian name, present on almost all the sites
investigated (96,7%), and written references to Italy.
Tab. 3 – List of “Italian Sounding” products by category
n.
%
Cheeses
13
25,0
Preserves, sauces, etc.
13
25,0
Pork meat products
11
21,2
Pasta
10
19,2
Bread, flour, grissini, etc.
3
5,8
Coffee
1
1,9
Food Hampers
1
1,9
Total
52
100,0
Tab. 4 – List of main elements used on packaging of fake products
Colours of the Italian flag
Geographical references
Written references to Italy
Imitation of the name of an Italian product
n.
15
12
20
29
Tab. 5 – Degree of “Italian Sounding” references on websites examined
Score
Case Number IS references
Product of
References to
Total
n.
of
on products certified Italian
Italy on
score
Products
origin
website
3
3
9
0
1
13
4
3
6
2
1
12
11
4
8
0
0
12
18
3
6
1
1
11
6
3
3
3
0
9
9
3
5
0
1
9
19
2
4
2
1
9
24
2
5
0
1
8
13
2
4
1
0
7
30
1
5
0
1
7
21
2
3
0
1
6
29
2
3
0
1
6
1
2
2
0
1
5
12
2
2
0
1
5
14
1
3
0
1
5
20
2
3
0
0
5
7
1
3
0
0
4
8
1
3
0
0
4
15
1
1
1
1
4
17
1
1
1
1
4
23
1
2
0
1
4
25
1
2
0
1
4
28
1
2
0
1
4
10
1
2
0
0
3
16
1
2
0
0
3
22
1
1
0
1
3
26
1
1
0
1
3
2
1
1
0
0
2
5
1
1
0
0
2
27
1
1
0
0
2
Besides phenomena of actual usurpation of Italian names or fraudulent use of trademarks or signs and
images evoking an Italian origin, it was observed that in 63,3% of cases it was the sites themselves that
presented images and colours referring to Italy and its culture rather than the specific product categories.
This would appear to be an “Italian sounding” feature of great communicative power, possibly greater
than that of the single products. The investigation attempted to define the degree of IS references on the
sites by using a scale of scores assigned on the basis of the presence or absence of certain elements linked
with imitation. As the results listed in Table 5 show, there are various degrees of IS references, ranging
from “weak ones (scores of 1 to 5: 60,0% of the total number of cases examined), to “moderate” ones
(scores of 6 to 10: 26,7%) and “strong” ones (scores of over 11: 13.3%). It also appears evident that the
signal most widely used for imitation purposes is the use of references on packaging, although from the
qualitative viewpoint the imitation of a PDO or PGI protected product is more serious).
5. Final Remarks
The amount of “fakes” on the market has now reached enormous proportions, with significant
consequences for various sectors, including the food industry, and heavily penalising Italy’s export
capacity. But the limitations in market access, with imitations stealing a large amount of space from
authentic products, are not the only effects, as these imitations are often accompanied by aggressive price
lowering strategies which induce consumers to opt for counterfeit products. From the concise survey
conducted EU statistics do not make it possible to analyse the phenomenon in great detail. It seems clear
that countries in which the fake industry is rife are focusing increasingly on widely and commonly used
products and observation of the provenance of the products seized shows that it is substantially the same
as that of generic counterfeit goods. It emerged from the investigation of the websites included in the
survey that firms manufacturing IS food products are often small businesses of Italian origin. The element
of appeal most frequently used is the original name of the product in Italian (96,7% of cases) together
with other written references to Italy (e.g. the actual word “Italy”). The use of images, along with the
history of the company and reference to its Italian origins, is the strategy most widely used to make an IS
product more sellable. The consequences are a growth in the phenomenon, which is difficult to prosecute
legally but represents, in a highly competitive market like that of food products, competitive space that
genuine Italian businesses have relinquished. Finally, although the investigation confirms the
characteristics of e-commerce, such as the development of a market with no geographical barriers, it has
also highlighted a new topic for reflection: its use as a means for the exchange of information and a
commercial environment which at times is misleading.
References
Bertozzi, C.A., 2006. Autenticità ed imitazione dei prodotti alimentari italiani in Nord America. ICE, Parma Chamber of
Commerce. Working paper.
Conterfeiting Intelligence Bureau, 1997. Countering counterfeiting: a guide to protecting & enforcing intellectual property rights.
International Chamber of Commerce.
European Commission, 2006. Taxation and Customs Union. http:// www.eu.com.
Federalimentare, 2003. Cibo italiano, tra imitazione e contraffazione. Roma.
IPI, 2004. L’industria del falso S.p.A. Danni economici e sociali della contraffazione. Roma.
MIPAF 2005. I prodotti agroalimentari italiani.http:// www.buonitaliaspa.it.
Nicoletti, G., Platania, M., Privitera, D., 2007. Authentic and Fake Italian Food Products in theWorld. 105th EAAE Seminar
‘International Marketing and International Trade of Quality Food Products’, Bologna, Italy, March 2007.
Acknowledgements
The paper is the result of collaboration by the two authors. However, Marco Platania wrote section 3 and
4.2 whereas Donatella Privitera wrote section 2 and 4.1. The Introduction and Final remarks are a joint
contribution.