Authors: Ball, R. & Quirke, S.
Published in National Security Journal, Volume 1, Issue 1, October 2019
is the responsibility of individual members or regional associations.29 While business supply chain applications such as traceability, country of origin, geographical indications and regulations are appropriate as part of the trade facilitation process, they have little effect on protecting the wine industry from counterfeiting, let alone aiding proactive investigations. Industry representatives acknowledge that wine is indeed vulnerable to counterfeiting and fraud, and a failure to implement a bespoke counter or anti-counterfeiting strategy could heavily impact on brand reputation. Despite recent prosecutions, the local wine industry is still to pursue such an approach beyond latent acknowledgement of a clear information gap.30
It is known that Zespri kiwifruit is counterfeited in multiple overseas markets. While ‘Theft’ counterfeiting of exported kiwifruit in China is well known,31 the company has also experienced cases where Chinese-sourced product with actual ‘Zespri labels’ – known as “combo infringing” – has been identified in markets in Europe.32 Zespri refer to counterfeiting within their industry as “exact copy counterfeiting,” which has less to do with imposter fruit, rather the ‘mislabelling’ of non-Zespri product with copied trademark labels and containers. According to the industry, counterfeiting varies from small scale false labelling to runs of “almost six million labels having being seized” as recently as 2017.33 This type of ‘trademark breach’ counterfeiting falls into the ‘Tamper’ and ‘IP Misuse’ categories. Despite enforcement actions, illicit labelling production lines emerge as quickly as they are closed down.34 The ‘Theft’ of plant varieties in China, Europe and New Zealand also exemplify another counterfeiting vulnerability for the industry. Prior to 2013, kiwifruit plants were stolen in China after Zespri had conducted ‘trials’ and later, these stolen plants were found to be growing in large quantities, causing biosecurity and legal issues in both countries.35 The theft of plant varieties is a major dilemma for Zespri as the opportunity for offshore prosecution is limited. Zespri utilise local investigators and legal firms for these enforcement actions.36
In reputational terms, Zespri sees the damage of counterfeiting as a “slow burn”; an issue that does need to be responded to but is not, as yet, critical.37 Such counterfeiting is not seen as coordinated or syndicated, but like the wine industry, more opportunistic. This not withstanding, there has been a “significant growth of trademark infringing packaging, labels and holograms” during interventions worldwide, and this is being driven largely by organised crime.38 Zespri is expected to produce NZ$2.42 billion worth of exports in 2019. As a result, Zespri officials see the counterfeiting of primary products as being a broader national issue, in that it is no longer a “Zespri product brand reputation issue in isolation”, rather a ‘New Zealand Inc’ reputation threat “where counterfeiting is really going to start impacting” in a