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The Fight Against Piracy And Smuggling In The Textile Industry—Who Wins?

By Michelle Fafa Agbenotor


No Ghanaian market is complete without a wide range of colourful cloths and fabrics that tempt passers-by to part with their money—and the famous art and textiles market in the capital Accra is no exception.


Among the many designs on show is the famous Kente fabric — a silk and cotton fabric worn on special occasions— which is popular among the Akan people. Kente and many other fabrics, known collectively as African print, are produced locally

The textile industry in Ghana is, however, increasingly facing competition from cheap copies smuggled in from abroad, especially from China. Local manufacturers are being forced out of business with the influx of cheap pirated fabrics.

John Amoah, Assistant Brand Protection Manager at Akosombo Textiles Limited which produces African print has noted “We have a situation where unidentified people take the brand logo of the local manufacturers, send it outside, print it and then they smuggle it into the country and customers who see the label GTP or ATL think they are buying original materials while, in fact, they are buying pirated textiles.

On the PRINTEX Ltd. textile-factory floor is a closed door bearing a sign that reads: "Out of bounds. Anyone seen entering without permission will be severely dealt with." This is to maintain strict secrecy until the point of production and according to PRINTEX Executive, Sujit Menon, "We keep everything under lock and key."


PRINTEX managers have good reason to be careful. Behind the door, a team of designers comes up with more than 500 copyrighted patterns a year for the colourful African fabrics that are the staple of Ghanaian fashion, and textile pirates are itching to see the new designs. The sooner the new models go public, the sooner textile makers in China, Pakistan, Nigeria, India and Ivory Coast will make cheap copies of the most popular ones, smuggle them back into Ghana and snatch PRINTEX'S customers.


The four local textile producers in Ghana figure piracy and smuggling cost them about two-thirds of the $150 million annual local market, a sharp blow in a country with relatively little indigenous industry and an average annual income of just $400.


Potential health risks from chemicals


Even though government, through the Ministry of Trade and Industry (MOTI) has set up a taskforce to hunt down the fake textiles and remove them—an initiative that is in line with World Trade Organization (WTO) Regulations, not all traders approve of it.

Critics of the government taskforce argue that confiscating the pirated products and burning them is not the answer.

 

Faustina Amoakwah, for example, points out that it is not only textiles that come from China. This is her words “We are in Ghana, we import a lot of things, even in Parliament we have chairs from China, so if you are telling us not to buy ‘Made-in-China’ goods, then what are you telling us?”

 

Another trader, Nora Asiedu, thinks that local textile producers should be given easy access to credit so they can boost production and increase their exports while John Amoah says it is not just a matter of preventing the theft of local manufacturers’ intellectual property, and that there are also health considerations.

 

“The Ghana Standards Authority is there to protect people – but who checks which chemicals have been used for the production of such pirated products?” he asks. “That is why it is so important that if a company produces this type of product, that company needs to identify that product so that if somebody buys it and there is a problem, the person can take that company on,” he added.

 

Wholesaler Ms . Owusu, who sells the cloth to the women who run retail stalls in the market explains that the vendors and their customers are demanding lower-price goods. She sells six yards of the fake for 80 Ghana Cedis while the GTP version would cost twice as much, and a VLISCO wax original 280 Ghana Cedis.

 

In other words, the pirates keep costs low in part by copying only designs that are already selling well. The position of the market women is that if Ghana Textile Printing turns out less-expensive products, they wouldn't sell counterfeits as everybody wants something cheap.

 

The major cause of concern, particularly for industry, however, appears to be the smuggling  of foreign fabric into the country, and not the copyright infringement.

 

This is because imported textiles are subject to a 20% tariff, and if industry estimates are correct, that means the smuggling costs the government about $20 million in lost revenue, much of the pirated material coming through the ports in Togo, next door on the Gulf of Guinea while some are trucked north, where there is less border supervision, and smuggled into Ghana, past poorly paid, easily bribed customs officers..

Recently, Ministry officials summoned 1,500 Accra market women to the National Theatre and warned them a crackdown was coming.

About a month later, customs police conducting a series of market raids seized smuggled goods and arrested a handful of textile dealers. A group of angry market women stomped to the Ministry of Trade and Industry and demanded an audience with the minister, which they eventually got and there was uproar.

While piracy can be contained, containing smuggling appears to be a herculean task.

New technology that identifies pirated fabrics


A local technology company, mPedigree, with the support of Premium African Textiles, has developed a new system called the GoldKeys technology to help traders and consumers determine which fabrics are not genuine.

A scratch-able panel on the label of a fabric reveals a 12-digit code. That code is then sent as a text message to a toll-free number 1393. According to Stephen Badu from Premium African Textiles, there is an instant response to say if the product is genuine or a fake. Stakeholders in the textile industry are showing interest in the system but it could still be some time before pirated fabrics disappear from shops and markets throughout the country.

Selorm Branttie, Strategy Director of mPedigree notes that the adoption of Goldkeys to protect GTP wax prints and other high value textile brands marks a new height of innovation in a sector that has historically been a major job creator and leading light of Ghanaian manufacturing.
For his part, Stephen Badu, Marketing Director of Premium African Textiles (PAT) says PAT is committed to breaking ground in the use of the latest technology to ensure that their customers secure the full value of the product they purchase.

The company, in collaboration with Premium African Textiles, owner of the GTP, Vlisco, and Woodin brands has started the Goldkeys technology as part of a campaign titled OGA (Original, Genuine and Authentic) to end the age-long piracy in the local textile industry.

PAT is, therefore, expected to apply MPedigree’s Goldkeys labels to packs of its products bearing a unique identification code. Customers buying the textiles can scratch off the label cover to reveal the code, which is then verified by sending it via SMS to a dedicated number.

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