Company warns consumers about counterfeit product on Amazon, highlighting ongoing issue

The products were being sold by a seller who goes by the moniker of BluTiger.  The seller was allegedly selling counterfeit versions of Nutramax’s Avmacol dietary supplement.

“We are treating these counterfeit products as a threat to your safety and well-being,”​ the company said in a press release aimed at consumers. 

 The company said it will replace any bottle bought from BluTiger with an authentic bottle of their product at no charge.  Nutramax also said it would replace any bottles that consumers suspect might be counterfeit.

Nutramax details anti counterfeiting strategy

Nutramax, which is based in Englewood, MD, said it has a strategy in place to combat counterfeiting, which it called a global problem.  Among the steps the company takes are:

• Actively pursuing any company found to be selling counterfeit Nutramax products, including taking strong legal action.
• Working closely with retail channels, especially open-market retailers online, to implement policies to prevent the sale of counterfeit products, remove unauthorized third-party sellers and take counterfeit goods out of circulation.
• Making ‘secret shopper’ purchases and other vigilance measures via what the company calls its Brand Protection Team.

Counterfeiting is a continuing problem, and the bad players are becoming increasingly sophisticated, said Justin Prochnow, a shareholder in the law firm Greenberg Traurig.  In one example he has related to NutraIngredients-USA in years past, the only way to tell the difference between the two products—one authentic and the other a counterfeit—was that a shade of blue was slightly different on the fake label.

In another more recent case, the counterfeit labels were so well done that the only way to decide if the product was real or not was to look at the actual capsules.  And even then, it was a close call.

“In a lot of cases, the only way you can tell is when they are side by side.  And in the recent case, the color of the capsule was slightly more red in the real product,” ​Prochnow told NutraIngredients-USA.

The growth of ecommerce has brought vibrant growth to the dietary supplement industry, whose products are robust and easily shipped. But stakeholders in the dietary supplement industry have long bemoaned the fact that brand holders can lose some control in that scenario.

“There is no law that that actually prohibits people from reselling products on Amazon or any other site.  The problem that companies upset about this practice are seeing is these parties potentially making claims that are not authorized by the companies themselves,”​ Prochnow said.

Ease of online counterfeiting

And the online universe appears to have made it vastly easier for actual counterfeiters to operate.  Amazon is far and away the leader in ecommerce and as such takes the brunt of the backlash against this development.

According to an article in The Atlantic Monthly​ magazine published on April 20, 2018, multiple companies in a variety of industries have filed lawsuits against the retailing giant​​, saying it doesn’t do enough to stem the tide of counterfeiting.  The report said that the retailer has yet to found liable in such a case because it has successfully argued that it provides a platform for the sale, but is not the seller itself.  Nevertheless, Amazon claims to devote significant resources to the problem.

“In a statement, the company said it has a team available 24/7 to take action on reported violations, and has invested significantly in machine learning and automated systems to detect copyright violations,” The Atlantic​ report stated.  Amazon did not respond in time for publication to an inquiry from NutraIngredients-USA about its practices regarding the sale of dietary supplements.

BluTiger, however, seems to continue to be an active Amazon seller.  The seller’s storefront now lists several clothing items, a tool for fishing electrical wires through walls and an incense gift bag.

Growing problem

The counterfeiting problem seems to be getting steadily worse. According to the Department of Homeland Security​​, in Fiscal Year (FY) 2017 (the most recent year for which statistics are available) the number of intellectual property rights (IPR) seizures in all product categories increased 8% to 34,143 from 31,560 in FY 2016. The value of those seizures, had the products been authentic, was calculated at $1.2 billion. In FY 2008, there were 14,992 such seizures, worth an estimated $272 million. 

So the dollar value of seizures increased slightly less than fourfold from 2008 to 2017 when adjusted for inflation. Meanwhile, the overall economy as measured by GDP grew only from $14.7 trillion in 2008 to $19.4 trillion in 2017, or about a 16% increase when adjusted for inflation.