Source: InfoMoney; Yahoo Finance - 03/12/2010

SÃO PAULO - This year, the IRS has already seized about R $ 1,1 billion in pirated products. Only this week, the institution carried out an operation that destroyed more than 2,7 tons of irregular goods.

This Friday (3), the agency will hold another National Merchandise Destruction Task Force, which should destroy CDs, DVDs, cigarettes, used tires, beverages, cosmetics, condoms, medicines and foods unfit for consumption, in addition to counterfeit products. The volume is valued at more than R $ 156 million.

The action is one more carried out across the country aimed at combating piracy, whose day is celebrated this Friday (3). And although measures like these are increasingly common in the country, the consumption of pirated products grows.

According to a survey conducted by Fecomércio-RJ (Federation of Commerce of the State of Rio de Janeiro), in partnership with Ipsos, about 70,2 million Brazilians buy counterfeit goods. The research shows that what motivates the purchase of this type of product is the low value - a factor that decides the purchase of 94% of consumers.

Real impacts

The figures also show that consumer awareness of the negative impacts of piracy on different segments of the economy has been falling. Many question whether, in fact, the sale of counterfeit products has great relevance to their lives and causes real damage.

The President of the National Council to Combat Piracy and Executive Secretary of the Ministry of Justice, Rafael Favetti, has no doubts. “The distribution of pirated products involves an immediate negative impact not only on trade, industry, the government's fiscal health, but mainly on people's dignity”, he says.

Favetti points out that it is important for the consumer to realize that a pirated product has no guarantee of safety and can still compromise the consumer's health. “This product is a lie”, he reinforces.

For the president of ICDE (Institute to Combat Fraud and Defense of Competition), Rodrigo Lagreca, the impacts of this parallel trade are real. “Piracy imposes unfair competition between companies and damages mainly small and medium-sized companies, which employ almost 70% of the population”, he says.

And the movement in this market is significant. The latest data on the underground economy, measured by FGV (Fundação Getúlio Vargas), show that the informal economy moved R $ 650 billion in 2010 and grew at the same speed as GDP (Gross Domestic Product). The data refer to the informal economy that includes tax evasion, social security contributions and compliance with labor laws and regulations, in addition to the production of goods and services that are not reported to the government deliberately.

The expressive numbers show the harmful potential of pirated products, according to Lagreca. He explains that piracy spins a non-virtuous circle that begins and ends with consumers at the same time. Low prices attract them, causing sales of companies that were concerned with purchasing certified and authorized products to decrease, as well as their production. These declines generate a decrease in the revenues of these companies, which end up having to reduce the number of employees - consumers.

Awareness

And at what point can that circle be broken? “The key point is to change people's behavior in the face of this illegal act”, says Lagreca, from ICDE. "It is important for the consumer to understand that his particular action in this sense causes damage", reinforces Favetti, from the Ministry of Justice.

Although the figures show that consumer awareness of the negative impacts of the sale of pirated products is falling, the president of the National Council to Combat Piracy believes that this perception is increasing. "Brazil has advanced in the fight against piracy and more and more consumers are aware of this act", says Favetti.

For Lagreca, the issue of the lowest price is not the only factor. "People buy pirated products not because they cannot afford to pay for the originals, but because they want to obtain the individual advantage in the short term, without the concern that this may have consequences for the collective, including for themselves," he says.

In this regard, Favetti says that there are solutions, but that they are not only based on government measures, such as fiscal and tax exemptions. “The market itself has mechanisms for this. There are good practices for reducing prices ”. One of them, he mentions, is the sale of licensed products - which are not original, but which are not part of the pirate market.

“Everyone must work together. It is not just the government's job to do this, ”says Lagreca. "We need to reinforce awareness campaigns, because piracy is added to the practice of consumer rights and duties", he adds.