Putting Security First
February 2004
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A growing need for security packaging opens up opportunities for converters to increase their customer base and income.
THE TYLENOL MURDERS of 1982, the 1993 bombing of the World Trade Center, and last year's Procrit® drug scare all have something in common: they're all the result of product counterfeiting and/or tampering. Once deemed relatively harmless problems, counterfeiting and tampering have turned out to be sinister crimes that threaten public safety and encumber economies around the world.
The statistics are dismal.
• In a blitz this past summer, the FDA and the U.S. Customs Service found that 88 percent of drug products examined at mail facilities in Miami and New York City were found to be counterfeit and contained "potentially dangerous" substances.
• Shrinkage—revenue lost to product pilferage, tampering, counterfeiting, etc.—cost U.S. retailers $31.3 billion in 2002, according to a presentation by Valeron Strength Films (Houston, Texas), which cites information from a National Retail Federation National Retail Security Survey from November 2002.
• According to the International AntiCounterfeiting Coalition (IACC), the worldwide computer software industry loses between $12 and $16 billion per year due to piracy and counterfeiting. That's more than 40 percent of all global software business revenues.
• In 1993, the U.S. Customs Service estimated the total American job loss due to product counterfeiting was 750,000 jobs.
• In 1994, New York City's consumer affairs commissioner, Mark Green, approximated that counterfeiting cost the city more than $350 million in lost tax revenues, according to the IACC.
The numbers say it all. Yet, in the midst of this uphill battle to save lives and bottom lines, there is hope. In recent years, new security packaging has emerged that's affordable, easily integrated into a converters' current processes, and—most importantly—makes criminals work harder than ever.
Thus, security packaging presents an ample opportunity for many converters to expand their portfolio, while adding value to their capabilities.
Opportunity knocks
Interest in security packaging has escalated in the last two years for many reasons. After 9-11, manufacturers faced pressure from new FDA regulations and recommendations, retailers, and their consumers to ensure the safety of their goods.
And now, as criminals get better at product simulating and tampering, brand owners need to protect their end users from the resulting health risks, subpar products, and higher product costs, said Ken Traub, president/ CEO of American Bank Note Holographics, Inc. (ABNH, Elmsford, N.Y.).
Manufacturers also have to protect themselves from lost revenues and liability issues, and problems related to the integrity of their brand. "Financial documents such as currency and credit cards have long been designed with strong counterfeit deterrence features, and now consumer packaged products are greatly improving the security of their packaging in order to address the increased threat of counterfeit products," Traub said. "Counterfeiting and tampering undermines the integrity and the consumer confidence in a branded product. A single tragic incident can tarnish the reputation of a manufacturer or brand owner for decades."
THE TYLENOL MURDERS of 1982, the 1993 bombing of the World Trade Center, and last year's Procrit® drug scare all have something in common: they're all the result of product counterfeiting and/or tampering. Once deemed relatively harmless problems, counterfeiting and tampering have turned out to be sinister crimes that threaten public safety and encumber economies around the world.
The statistics are dismal.
• In a blitz this past summer, the FDA and the U.S. Customs Service found that 88 percent of drug products examined at mail facilities in Miami and New York City were found to be counterfeit and contained "potentially dangerous" substances.
• Shrinkage—revenue lost to product pilferage, tampering, counterfeiting, etc.—cost U.S. retailers $31.3 billion in 2002, according to a presentation by Valeron Strength Films (Houston, Texas), which cites information from a National Retail Federation National Retail Security Survey from November 2002.
• According to the International AntiCounterfeiting Coalition (IACC), the worldwide computer software industry loses between $12 and $16 billion per year due to piracy and counterfeiting. That's more than 40 percent of all global software business revenues.
• In 1993, the U.S. Customs Service estimated the total American job loss due to product counterfeiting was 750,000 jobs.
• In 1994, New York City's consumer affairs commissioner, Mark Green, approximated that counterfeiting cost the city more than $350 million in lost tax revenues, according to the IACC.
The numbers say it all. Yet, in the midst of this uphill battle to save lives and bottom lines, there is hope. In recent years, new security packaging has emerged that's affordable, easily integrated into a converters' current processes, and—most importantly—makes criminals work harder than ever.
Thus, security packaging presents an ample opportunity for many converters to expand their portfolio, while adding value to their capabilities.
Opportunity knocks
Interest in security packaging has escalated in the last two years for many reasons. After 9-11, manufacturers faced pressure from new FDA regulations and recommendations, retailers, and their consumers to ensure the safety of their goods.
And now, as criminals get better at product simulating and tampering, brand owners need to protect their end users from the resulting health risks, subpar products, and higher product costs, said Ken Traub, president/ CEO of American Bank Note Holographics, Inc. (ABNH, Elmsford, N.Y.).
Manufacturers also have to protect themselves from lost revenues and liability issues, and problems related to the integrity of their brand. "Financial documents such as currency and credit cards have long been designed with strong counterfeit deterrence features, and now consumer packaged products are greatly improving the security of their packaging in order to address the increased threat of counterfeit products," Traub said. "Counterfeiting and tampering undermines the integrity and the consumer confidence in a branded product. A single tragic incident can tarnish the reputation of a manufacturer or brand owner for decades."
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