Counterfeit Food: A Threat to the Economy, Consumer Safety

The counterfeit food market emerges as a pressing concern in Mexico, reaching MX$500 million (US$29.09 million) annually, particularly surging during periods of high inflation. This clandestine industry poses a significant threat to both the economy and consumer well-being, shedding light on the urgent need for comprehensive solutions to tackle this escalating issue.

Enrique Alcázar, Vice President of Franchises, Brands, and Intellectual Property, National Confederation of Chambers of Commerce, Services, and Tourism (CONCANACO-SERVYTUR), emphasized that this form of commercial fraud focuses on electronic devices, technology, clothing, and footwear, constituting a significant 70% share in this market. Furthermore, 25% is attributed to movies, software, beauty products, perfumes, and even toys and illicit downloads. Lastly, the remaining 5% is associated with processed foods. According to estimates from the National Chamber of the Transformation Industry (CANACINTRA), counterfeiting in Mexico constitutes a market surpassing MX$10 billion annually. In this context, the 5% related to pirate foods corresponds to approximately MX$500 million.

Esperanza Ortega, President, CANACINTRA, emphasized that these products pose an extremely unfair competition, given their significantly lower cost compared to authorized ones. Moreover, as these products are not regulated, they may present health hazards. María del Refugio Torres, Researcher in Pharmacobiology, University of Guadalajara (UdeG), underscored the potential presence of chemical and biological risks, as the substances containing these foods can be toxic and potentially fatal. Additionally, there are hygiene-related risks in handling these products, which could lead to gastrointestinal problems.

Alcázar emphasized that during periods of high inflation, there is a heightened demand for these types of food items. “As family finances come under pressure, households are compelled to seek out more affordable offers, creating an opportune moment for criminals to exploit this market. The fact that these products are low-cost leads to their distribution through informal markets, directly affecting the formal economy,” explained the entrepreneur. 

Héctor Magaña, Coordinator of Analysis and Research of the Center for Research in Economics and Business, Tecnológico de Monterrey, highlighted that the production of counterfeit products leads to a substantial decline in the sales volume of companies in the food sector. He argued that, despite the issue not currently posing a significant financial threat due to the high revenue levels of large retailers, the marketing of these items will continue to rise unless there is a greater incentive for formal commerce and a strategy to curb illegal trade.

Gerardo Cleto, President, Council for the Development of Small Companies and Family Businesses (CONCOMERCIO), expressed concern about the potential damage to the reputation of businesses caused by counterfeit products. Cleto noted that the uncertainty surrounding the authenticity of these products can create doubts among consumers and tarnish the image of the companies involved. 

In mid-2023, authorities in Mexico City seized two clandestine Coca Cola factories operating in the capital. These facilities were distributing between 50 and 60 boxes of soda per day to various businesses, priced at approximately MX$200. In response, Coca Cola Mexico issued a statement expressing appreciation for the efforts of the authorities in tackling such incidents. “We acknowledge the efforts of our country's authorities in combating these actions, which, up until now, have been confined to these cases. We will continue to collaborate to ensure the integrity and safety of our consumers," reads the statement.