Déjà vu? France steps up fight against counterfeiting in Olympic campaign By Reuters

By Helen Reid, Layli Foroudi and Mimosa Spencer

PARIS (Reuters) – At the tourist-friendly Saint-Ouen flea market, not far from the Stade de France where athletes will compete at this summer's Paris Olympics, police officers stormed the market at dawn on April 3 and closed down 11 shops selling counterfeit handbags and shoes.

They seized 63,000 items of clothing, shoes and leather goods, including fake Louis Vuitton and Nike (NYSE:) and dumped them into trash compactors at the scene. Ten people were arrested.

Michel Lavaud, head of police security for the Seine-Saint-Denis suburb that will host the Paris 2024 athletics and swimming events as well as the closing ceremony, described the operation as part of a pre-Olympics crackdown on copycats.

Counterfeit fashion is big business. Counterfeit branded clothing alone is estimated to have cost French companies 1.7 billion euros ($1.83 billion) in lost sales on average each year between 2018 and 2021, according to the European Union Intellectual Property Office.

“We have been talking about the problem of counterfeiting for two years,” Lavaud said, adding that police are trying to step up their efforts. The raid in the world fashion capital bears some similarity to clean-up operations carried out at previous Olympic venues, such as Beijing in 2008, which had mixed results, as well as in London in 2012 and Rio in 2016.

But the police crackdown on street vendors in Seine-Saint-Denis, where one in three inhabitants lives in poverty according to French national statistics, has drawn criticism for pushing people already in precarious economic situations into further difficulties.

Axel Wilmort, a researcher at the French social sciences institute for urban studies LAVUE, said he had noticed a sharp increase in police presence and repression of informal market vendors on the outskirts of Paris over the past three months, with frequent police patrols and the installation of metal barriers preventing vendors from setting up their stalls.

“There is a desire to erase all signs of precariousness, poverty and undesirability,” he said, adding that law enforcement officers often fail to differentiate between sellers of counterfeit goods and sellers of legal second-hand products.

Paris police did not respond to a request for comment.

Police raids on street traders near Paris's iconic Montmartre hillside have multiplied since February. Ten raids were carried out in four days in early June to dismantle a market of about 1,000 vendors, according to a letter seen by Reuters sent by the district's mayor to the interior minister. Seventy tonnes of goods were destroyed in March alone, according to the letter.

Reuters documented in April how street vendors were caught in a major police operation aimed at ridding poor Paris suburbs of petty crime ahead of the Games.

LUCRATIVE GAME

The estimated 15 million visitors expected to attend the Paris Olympics, a magnet for luxury shoppers, are a tempting target for sellers of fake designer goods.

Last year, Paris 2024 organisers and the International Olympic Committee, perceiving a threat to branded goods, joined forces with French intellectual property protection association UNIFAB. The organisation works with brands to raise awareness of the risks associated with counterfeit products, which often violate safety standards and help finance illegal activities.

“We have been working hard towards the Olympic Games,” said UNIFAB Director General Delphine Sarfati-Sobreira.

LVMH, the world’s largest luxury conglomerate and a sponsor of Paris 2024, is a prominent member. LVMH did not respond to a request for comment on the recent anti-counterfeiting measures. The company has said it works closely with authorities and customs officials to enforce its intellectual property rights and defend consumers from counterfeiters.

France has already stepped up its fight against counterfeiting. Last year, customs seized 20.5 million counterfeit products, 78% more than the 11.5 million seized in 2022, according to data published in May.

This spring, UNIFAB helped train 1,200 customs officers to verify the authenticity of Olympic products, with the Paris 2024 mascot and red clothing the most likely target of illegal replicas, according to authorities. French authorities also have 70 officers fighting online counterfeits, seeking to dismantle local and international criminal networks.

“Paris doesn't want to be known as the counterfeit capital of Europe,” said intellectual property lawyer John Coldham, a partner at Gowling WLG in London, who worked with brands during the 2012 pre-Olympics “Fake Free London” operation. But a bigger concern for French fashion houses may stem from foreign buyers' reluctance to visit Paris during the Olympics, rather than revenue lost to counterfeiting.

Air France-KLM warned last week that it expects a hit of up to 180 million euros this summer as some foreign tourists avoid the French capital. LVMH and its rivals have said they do not expect a revenue boost from the sporting event and may instead turn their attention to other destinations.

“Luxury companies are signaling they are ready to welcome buyers from places other than Paris – from the Côte d'Azur to Milan and beyond,” said Luca Solca, a luxury goods analyst at research and brokerage firm Bernstein.