Who's Running A Big Counterfeit Ring For Hermes Bags? Apparently Hermes Employees

from the is-that-still-counterfeiting? dept

There are significant reasons to question the actual impact of any counterfeiting that goes on, as multiple studies have shown that (a) it's not nearly as big as various reports claim and (b) most people buying fake products know they're buying fake products, and they often later buy the real ones. However, there's no doubt that counterfeiting exists, and it's understandable that there are efforts to crack down on pure counterfeiting: cases where someone is selling a knockoff good, claiming to be the original.

Still, it's a bit of a surprise to find out that, as part of an effort by French law enforcement to break up a ring that was counterfeiting Hermes bags, they discovered the whole thing may have been run by Hermes employees -- at least two of whom have been arrested (and fired). Of course, perhaps it's not so strange. When it comes to copyright infringement, it's pretty common to find out that early leaks are "inside jobs." Still, it does raise questions about whether those "knockoffs" were really of lesser quality... It reminds me of the story of a firm that created its own "counterfeit" line to compete, but that was "authorized." This just sounds like some rogue employees, trying to cash in.


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  1.  
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    fb39ca4 (profile), Jul 11th, 2012 @ 8:50pm

    If the employees are making it, presumably in the same factory, isn't it genuine?

     

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  2.  
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    markzip (profile), Jul 11th, 2012 @ 8:59pm

    Sounds the old days of the record biz

    This reminds me of record pressing plants of old.

    Record industry old-timers I know have told me lurid tales of "the front door" and "the back door" of pressing plants.

    The people who ran the plant would press a certain number of records and send them out "the front door" to be counted by the client/artist. A whole 'nother number went out "the back door" to be sold off the books, with the artists seeing nothing on the books. In extreme cases, it was a the record company itself selling off the books.

     

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  3.  
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    Anonymous Coward, Jul 11th, 2012 @ 9:33pm

    I used to see those type of employees as scum, lowlife people who stole from others.

    That vision is gone now, I see employees trying to copy their employer products and selling those as baby entrepreneurs, future partners that could become something if given a chance.

    I remember reading somewhere that Coca-cola embraces pirates, instead of suing them they go there, give them training and make them official Coca-cola distributors luring them with opportunities that they would not get otherwise if they were on their own, this is how you can find Coca-Cola in the desert or in the middle of a jungle.

    Instead of criminalizing people for producing something makers should be encouraging them to work for them, those are the boots on the ground that create markets, kill them and you kill your market slowly.

     

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    fb39ca4 (profile), Jul 11th, 2012 @ 9:41pm

    Re: Sounds the old days of the record biz

    The MAFIAA still does this.

     

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  5.  
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    Nobody Special (profile), Jul 11th, 2012 @ 10:11pm

    Globalism kills

    So after Katrina I decide to drop the $300 for an "authentic" stitched Saints jersey of my beloved Saints. Google showed quite a discrepancy in price though - $300 at the NFL Shop versus $40 on eBay. Enough to warrant some research, anyway. It only took a few mins to realize the $40 version was a knockoff but that only piqued my curiosity more. How could they produce it so much cheaper, etc? So I looked into it. Yeah, maybe 25 years ago "knockoff" meant inferior look-a-like materials and craftsmanship, but not any more. The Reebok plant that made the "real" jerseys was like next door to the Chinese factory making the knockoffs using the same fabric and thread from the same supplier as the "legit" plant next door. About the only difference I could find in the production technique was quality control - the "authentic" brand actually had a QC guy that would inspect and reject stock that may have been sub-par so no chance it could be sold to the public; the knockoff factory: not so much. That quality does add value, just not $300 versus $40 worth of value.

    The moral of the story: I used to believe in the anti-counterfeit argument back when "counterfeit" meant inferior quality made by slave-labor in sweatshops overseas. Unfortunately since then these same manufacturers moved their factories to exploit that very same slave labor and sweatshops overseas so the execs could shift the wages of those previously "overpaid" workers into their own pockets. So screw 'em. When my jersey eventually falls apart (5 years and still going) I'll just drop another $40 to replace it.

     

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  6.  
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    Manok, Jul 11th, 2012 @ 10:38pm

    I still have some Tommy Hilfiger shirts that I bought 15 years ago in China. Awesome quality!

     

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  7.  
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    Manok, Jul 11th, 2012 @ 10:38pm

    (Did I mention they are (supposedly) knock-offs?)

     

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    Aerilus, Jul 11th, 2012 @ 11:01pm

    Re:

    as far as i can tell getting upset about it is the least productive avenue sure it would probably upset me too. but you have to choose which you want to advance your ego or your company. letting emotion rule is probably not the best long-term solution. that being said i have read where cell phone makers have gone and offered counterfeiting engineers in china jobs and were turned down because they were making more money counterfeiting what positive outcome could come out of that situations?

     

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  9.  
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    Anonymous Coward, Jul 11th, 2012 @ 11:06pm

    Re: Globalism kills

    ya they are setting up shadow shift, shadow corporations and even shadow productions lines over in china we send over people to set the factories up and train everyone and they just copy everything exactly and sell it on the grey market pretty industrious imo who wouldent when we have given them the exact skill sets and capabilities necessarily

     

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  10.  
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    haiku, Jul 11th, 2012 @ 11:14pm

    Re: Globalism kills

    A large percentage of the European knitware/golf shirts/etc. have been manufactured in the Far East for years.

    The manufacturer receives an order for 500x shirts. He manufactures 530x to allow for flaws, but only uses 510x.

    The 20x 'over-run' is what you & I purchase as counterfeits.

    Many years ago I purchased a couple of Lacoste knock-offs, quite obviously different from those sold by the official distributor. Six months later I saw 'my style' of shirt for sale by the official distributor: turns out I was simply ahead of fashion.

     

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  11.  
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    haiku, Jul 11th, 2012 @ 11:14pm

    Re: Globalism kills

    A large percentage of the European knitware/golf shirts/etc. have been manufactured in the Far East for years.

    The manufacturer receives an order for 500x shirts. He manufactures 530x to allow for flaws, but only uses 510x.

    The 20x 'over-run' is what you & I purchase as counterfeits.

    Many years ago I purchased a couple of Lacoste knock-offs, quite obviously different from those sold by the official distributor. Six months later I saw 'my style' of shirt for sale by the official distributor: turns out I was simply ahead of fashion.

     

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  12.  
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    Bas Grasmayer (profile), Jul 11th, 2012 @ 11:51pm

    This is actually very common. Especially when manufacturing is outsourced to countries with lower wealth standards (and corruption), factories often produce an extra batch for the black market. Of course, they might run out of the production material for the job, but they know exactly how to make it and can do it on cheaper, lower quality material.

    Usually those are clear counterfeits and only intended for the local market where people can't afford western brands anyway.

     

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  13.  
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    velox (profile), Jul 12th, 2012 @ 12:13am

    "counterfeit" goods or just unauthorized?

    Having lived in Asia years ago, and having seen it first hand, I can vouch for what is reported in the above comments.
    There is no doubt that factories in Asia produce more than the contracted number of goods, and then sell the surplus themselves. In this situation, the word "counterfeit" doesn't accurately describe what is happening, since the buyer isn't being mislead as to the nature of what is being purchased. The goods are not "knock-offs", but are absolutely identical to what is being sold through authorized channels.
    These situations represent contract violations on the part of the manufacturer. In my opinion they should appropriately be viewed as torts to be dealt with in civil rather than criminal court. In an export/import scenario, I question why the taxpayers of either country should be paying law enforcement to sustain the parameters of a private contract.

     

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    Violated (profile), Jul 12th, 2012 @ 12:54am

    Re:

    Make up your own mind between authorised and unauthorised.

    In many cases the same factory can end up making both. This can start off like they have a few spare for some reason or another, such as design change, errors, over production, and they just dispose of them cheap.

    Except of course people get interested in the lower price and soon enough a big business wants to stock up. Factories are usually wanting additional orders.

    Well who can say how this one happened but it seems clear that the counterfeits were just as good as the original.

     

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  15.  
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    Violated (profile), Jul 12th, 2012 @ 1:05am

    Replica

    We can see what the World is coming to when a business owner like myself rarely receives through the mail sales flyers for clearly stated replica products.

    Sun glass, handbags, scarves and the like all with popular brand name logos.

     

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  16.  
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    Anonymous Coward, Jul 12th, 2012 @ 1:37am

    people who buy fake cloths, shoes bags etc know what they are doing and do so, i think, for two main reasons

    a) they cant afford the real items
    b) owning something that looks like the real McCoy makes them feel good

    there is no way that there is a 'lost sale' of a real item because that would never have happened. buying a fake should be looked on as flattery by the producers of the genuine items, not taking the piss. when fake goods are sold on ebay etc, the tax man gets his cut. people know by the asking price what they are buying, unless they are complete morons, that is!

     

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  17.  
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    abc gum, Jul 12th, 2012 @ 5:11am

    Why is the general public being asked to pay, with loss of money and rights, for the incompetence of corporations?

    Looks like another false flag operation.

     

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  18.  
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    ltlw0lf (profile), Jul 12th, 2012 @ 7:31am

    Re: Re: Globalism kills

    The 20x 'over-run' is what you & I purchase as counterfeits.

    What kills me is that a good businessman would look at this and realize that there is a very simple fix for this. They would realize that some people would pay $300 for something while others would only pay $40, and thus would produce a certain amount to be sold at $300 and a bunch more to be sold at $40. Then, they would own both the "white" and "gray" markets. An even better businessman would realize that $300 is 9,999,999% profit and would reduce the cost to $240, which would be more acceptable for their market price, and while they wouldn't be bringing in such an obscene profit, they would be making the product obtainable by more people.

    I actually know companies that compete with themselves on the gray market and do extremely well. They don't reply on pie-in-the-sky laws to protect their profit. They instead spend their time innovating, and by splitting their margins between white and gray, they pull in a lot more money that those who despise the gray and only sell official and overpriced items.

    In this case, it isn't globalism that kills...it is the standard unwillingness to innovate and compete in the open market that kills.

     

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  19.  
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    Chris Maresca, Jul 12th, 2012 @ 10:00am

    Hermes manufacturing...

    ... all their bags are handmade in Paris. It's doubtful that you could make ones that 'went out the back door', particular since it takes days to make one.

    That said, nothing is stopping employees from making the same bags at home....

    http://searchingforstyle.com/archives/10965/
    http://houston.culturemap.com/newsdetail/0 6-04-12-exclusive-photos-inside-the-hermes-factory-where-birkin-made/

     

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