Counterfeit alcohol consumption not just due to low prices - study

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Previous work has overestimated the impact of low prices on counterfeit alcohol consumption, according to a Russian study.

Expansion of the counterfeit product market is often explained by demand of economically disadvantaged people for low-priced goods.

However, it becomes more complicated once deceptive and non-deceptive forms of counterfeiting are taken into account.

Regarding deceptive counterfeiting, consumers who unknowingly purchase counterfeit products do not differ from those who buy genuine alcohol in terms of purchasing patterns.

Counterfeit alcohol was defined as beverages that did not match the information provided on the labels such as trademarks, data on producers, composition, ethanol concentration, etc.

Just low price or other factors

Previous research put too much weight on low prices being behind drinking counterfeit alcohol, according to the study.

Problem drinking and attachment to social networks of surrogate alcohol drinkers are more influential in explaining why people purchase counterfeit alcohol, it added.

In 2002, illegal commercial alcohol made up more than half of the alcohol retail turnover in Russia.

According to official statistics, 105,449 organizations dealing with illegal production and distribution of ethanol and alcoholic beverages and 126,393 violations related to the illegal production and distribution of ethanol and alcohol products were discovered by law enforcement agencies in 2015.

A total of 627 violations were related to the illegal production and distribution of ethanol and alcoholic beverages using forged trademarks.

The study analysed data based on consumer self-reports from the nationwide Russia Longitudinal Monitoring Survey from 2012 to 2014 to find predictors of risky behaviour by consumers who purchased counterfeit alcohol knowingly or unknowingly.

Among respondents who had purchased alcohol during the previous 30 days, 5% had bought counterfeit alcohol.

A total of 32% purchased it unknowingly (deceptive counterfeiting), while 46% were aware they were buying counterfeit alcoholic beverages (non-deceptive counterfeiting), and 22% said sometimes they purchased it deliberately and sometimes inadvertently (non-deceptive counterfeiting).

Results contradict previous findings indicating that only one-third purchase counterfeit products deliberately.

This implies there has been a steady consumer demand for counterfeit alcohol maintained by the distribution system that makes it easily available in Russia, said the study.

The probability of counterfeit alcohol purchase rises with an increase in indifference to the quality of goods and famous brands when compared with consumers who purchase non-counterfeit alcohol.

Problem drinkers and social media impact

Problem drinkers have a higher likelihood of becoming consumers who purchase deceptive and non-deceptive counterfeit alcohol than drinkers who do not report any problems generated by alcohol relative to consumers who purchase genuine alcohol when all predictors were constant.

Given that problem drinkers consume alcohol frequently and heavily, they have an increased likelihood of purchasing counterfeit alcohol.

The probability of deliberately purchasing counterfeit alcohol decreases with an increase in per-capita income relative to consumers who purchase genuine alcohol given all other predictors.

Researchers said this means the worse the economic conditions, the greater the consumer demand for non-deceptive counterfeit alcohol.

Consumers who have social networks including drinkers of non-beverage alcohol and producers of homemade alcohol are highly likely to consume counterfeit alcohol deliberately.

Only 13% of Russian alcohol drinkers knowingly purchased counterfeit alcoholic beverages in the last 12 months, according to Khramova (2012).

The most popular reasons were “there was no time to choose” (46%) followed by “consumer’s desire to save a substantial amount of money” (34%) and “the perceived quality was comparable to the original” (23%). 

The study called for policymakers, enforcement agencies and brand holders to cooperate more by sharing laboratory examinations to investigate sources and channels of illegal products and components.

Legal producers should stimulate consumer loyalty to their brands and invent signals that allow consumers to distinguish between genuine and counterfeit products, it added.

The work had academic funding from the International Alliance for Responsible Drinking (IARD) in 2012-15. IARD is financed by 10 producers of beer, wine and spirits.

Source: Alcoholism: Clinical and Experimental Research

Explaining Counterfeit Alcohol Purchases in Russia

Author: Zoya Kotelnikova

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