Source: O Globo, 15/10/2004

Awareness of the population is one of the weapons of the Federation of Commerce of the State of Rio de Janeiro (Fecomércio-RJ) to try to combat illegal trade in the state. Orlando Diniz, president of the federation, says that regional meetings and seminars, such as the one promoted by the organization last Wednesday, have tried to clarify to the population how the purchase of pirated products ends up affecting the country's economy.

? Do consumers need to be insistently warned and reminded that they are themselves the biggest victims of piracy and smuggling? says Diniz, who represents 370 thousand commercial establishments.

The entity also calls for more drastic action by the powers of repression, to reduce the vulnerability of Brazilian ports and airports. In order to combat the "binomial of evil that unites drug trafficking and piracy".

? Because not only individual interests or localized sectors are at stake. But the threat of the degradation of a new and significant portion of society, driven to join the ranks of crime, in yet another route of unbearable detours. The fight against piracy and smuggling are the permanent focus of Fecomércio.

And, as a direct consequence of the crime, legal commerce has been losing ground. According to the Brazilian Association of Record Producers (ABPD), two thousand stores selling original CDs were closed from 1997 to 2002. According to the entity's financial director, Eduardo Rajo, there are cities in which there is not even one store for sale of legal CDs, mainly in the Northeast. He says that, to try to compete with pirated products, the industry has tried to reduce the price of catalog CDs, a traditional suggestion from consumers.

? There are products for all income groups. Today it is possible to find CDs for R $ 10 or less. Our challenge is to find the price balance point. But, since 1997, has the value of CD at the factory remained stable? says the president of the association.

Revenue with unpublished CDs fell 67%

But the launches still require a lot of investment, which prevents competition with the street stalls in the city, which display the launches before they even reach stores. Therefore, the number of launches has been decreasing every year. From 1997 to 2003, there was a 67% nominal drop in turnover with unpublished CDs:

? Is there a total inability to compete with pirates? takes on.

According to Rajo, of every two CDs sold, one is pirated, which strangles the Brazilian music industry, which has already stopped making tapes precisely because of piracy:

? There is no productive process that can resist this rate of counterfeiting. Especially in an industry where the biggest feature is investment.

For him, the pirate industry has advanced more since the early 90s, with the spread of CD technology. And now, with the advancement of piracy, Rajo fears for the future of concert DVDs. Is it a product that has been gaining space in the record industry's revenue? historically it represented 2% and today it already accounts for 15% of the movement.

? It is the new lode that counterfeiting has been looking for.

The high and distorted tax burden between the various sectors of the economy is another factor that favors the growth of the piracy industry, also in the opinion of the director of the Fecomércio-RJ Institute, Luiz Roberto Cunha.

? This is the initial link in the chain. The impact on trade is enormous, especially for micro and small business owners, who end up being pushed to informality. This is different from smuggling and piracy.

Emerson Kapaz, from the Instituto Ética Concorrencial (Etco), confirms this incentive to tax evasion. According to him, of the approximately 38% tax burden on the Gross Domestic Product (GDP), 24% are levied on companies in the productive sector:

? In the United States, it is no more than 8%. This makes piracy survive. There is a huge advantage over legal products.

Flood of pirated products from China

The director of the Fecomércio-RJ Institute also recalled the flood of counterfeit products of Chinese origin. According to the economist, the situation is more serious due to the direct and indirect action of the Chinese government:

? China is a complicated problem for everyone, due to the state's involvement.

But Cunha warns that a certain type of informality has a social role. And even for the survival of some Latin American countries, such as the work of artisans, who were street vendors before the invasion of pirated products.

? The informal economy is a tradition, especially in Brazil. This informal trade in the sale of handicrafts does not affect society.