Pirates rip off the greatest exploiters

PUBLISHED : Thursday, 05 April, 2001, 12:00am
UPDATED : Thursday, 05 April, 2001, 12:00am

On Sunday TVB Pearl screened a BBC documentary on counterfeiting of sports merchandise - particularly that of Manchester Unit ed, the world's richest and, by some measures, most popular football club.

The programme, which carried a strident and alarmist tone, laid it on thick: counterfeiting was an insidious illegal trade that imposed heavy costs on legitimate businesses and cost honest workers their jobs.

Ironically, a day later Manchester United, which is listed on the London stock exchange, reported a 42 per cent rise in first-half profits.

This column has no desire to make an argument in favour of counterfeiting. Security of property rights is an essential component of economic growth and stability. Yet it was difficult to avoid the impression that the BBC team had missed a wider economic context.

Much of the footage was filmed from the back of a car, catching jerky pictures of the back of interviewees' heads.

At one point, the words 'secret filming' appeared on the screen as the BBC hacks haggled over a fake shirt with a Bangkok street vendor. Doubtless the Thai Government will be shocked - shocked! - to learn that fake products are on sale on Khao San Road. Immediate action can surely be expected.

The none-too-subtle suggestion was that those who buy counterfeit goods are supporting the purveyors of drugs, that other core business of the hardened Asian criminal.

Be careful the next time you buy a fake T-shirt; you could find yourself snorting heroin next.

At one point, a stern-looking British minister tutted over a pile of counterfeit football shirts, remarking on how difficult it was to tell the fakes from the real thing.

At no point did the programme talk about where the genuine products are made. Given the programme was targeted at a domestic audience, viewers were left to assume that the counterfeiters were costing British workers their jobs. Somehow, I don't think so.

The reason that fakes look so much like the real thing may well be that in many cases, to all intents and purposes, they are the real thing.

There is a saying in the rag trade that there are only five countries in which to manufacture: China, China, China, India and India.

There may be Italian labels but 90 per cent of the work is most likely done in China.

This is the rub. Western companies avail themselves of cheap Asian labour and manufacturing facilities to make products they can then sell at high profits, because of the demand created by the power of their brands.

A brand is a form of monopoly. The owner can restrict supply and raise prices to maximise profits. It may not be defensible but is it surprising when those doing the grunt work want a bit more of the action?

No club has been more ruthlessly efficient at exploiting its brand than Manchester United.

This poses another interesting question. Who really 'owns' a football club's brand? Legally it is the shareholders but in a moral sense, at least, it is really a form of public property.

The Manchester United brand was created not by one designer but by all the players, managers, staff and supporters in its history - and one terrible disaster - that contributed to the club's mystique.

Manchester United has kept shirt prices high and preyed on the loyalty and emotions of its followers by frequently changing its strip (necessitating a fresh purchase by those who want to keep up to date), to much outrage. The efficacy of this strategy is reflected in its profits. Who really is exploiting who?

Jake van der Kamp is on holiday.