Not only can fake products circulate through a company's distribution network, fake components can even be embedded in a company's products, according to Stephen Vickers, the chief executive of International Risk.
Mr Vickers related the case of a copying machine manufacturer with factories and distribution networks in China.
Senior Chinese managers at the firm set up their own unauthorised factory within the company, producing fake toner to go with the copying machines. The fake toner was manufactured by company workers on company pay, supervised by external syndicates.
The inferior quality of the fake toners caused breakdowns in some of the copying machines, leading the company to discover the scam.
'The scale of the problem was huge. There might have been four fake toners for every real product,' Mr Vickers said.
After two years the illicit factory was finally shut down and the offending employees fired, but not before immense damage had been done to the company.
