Skip to main content

Trade Groups Rail Against Shoplifting, Counterfeiting

WASHINGTON, DC -- The Food Marketing Institute and Grocery Manufacturers of America were busy here yesterday, supporting legislation to fight against the evils of organized shoplifting and counterfeiting.

Pushing for legislation to make theft crimes perpetrated by organized retail gangs a federal felony, Chris Nelson, director of asset protection for Target Corp., testified before the House Judiciary Crime, Terrorism and Homeland Security Subcommittee on behalf of the FMI-chaired Coalition Against Organized Retail Theft (CAORT).

Adding insult to the estimated $30 billion worth of injuries that organized shoplifting crimes costs the retail industry annually, Nelson's testimony described the problem as also a serious threat to consumer health and safety and should thus become a federal felony.

Nelson said what is most important "and most disturbing is the fact that this type of criminal activity can put consumer health and safety at risk." He cited as examples infant formula and over-the-counter drugs, which are commonly stolen by shoplifting rings. Pilfered products may not be kept under ideal or required storage conditions, "which can threaten the product's integrity," Nelson said. "Organized thieves will repackage and change the labels of stolen products to falsely extend their expiration dates." The items, he continued, are then resold through flea markets, over the Internet and elsewhere past their expiration dates, threatening consumer health and safety.

Due to the absence of a statute that clearly identifies organized retail theft as a federal felony, Nelson said criminals are usually prosecuted under state shoplifting laws that treat such crimes as misdemeanors, which results in probation or little jail time.

Bill Greer, director of editorial services for FMI, told Progressive Grocer a stiffer federal law is necessary, not only to act as "a much stronger deterrent, but also to provide stricter penalties to give these people appropriate punishment."

While the CAORT awaits word on a prospective sponsor for the would-be new law, Greer said legislation is also needed for ringleaders and other related criminal players along the pipeline. "A federal felony would serve as a strong deterrent against crimes of this nature in the future," Greer said, noting that in last year's 108th Congress, the coalition endorsed such a bill (S. 1553) that was introduced by Senator Larry Craig (R-ID).

GMA, meanwhile, commended a House subcommittee for passing "The Stop Counterfeiting in Manufactured Goods Act" (H.R. 32). GMA has endorsed H.R. 32 as a member of the "Coalition Against Counterfeiting and Piracy" (CACP).

The Crime, Terrorism and Homeland Security Subcommittee of the House Judiciary Committee voted unanimously in favor of H.R. 32. The bill would increase the penalties for criminals who distribute counterfeit products by closing existing loopholes in federal law and granting trademark owners similar remedies already provided to copyright and trade secret owners.

The subcommittee today also hosted a hearing regarding concerns about organized crime against manufacturers and retailers, including counterfeiting and organized retail theft.
Paul Fox, director of external relations for The Gillette Co. and chair of CACP, testified, "Counterfeiting and [organized retail] theft pose a significant threat to the economy of the United States and undermine the welfare, security and safety of its citizens. … As leaders in global commerce, we must take real steps to protect the integrity of U.S. brands and products."

Criminals traffic in counterfeit products and organized retail theft to raise funds for illegal and terrorist activities. It is estimated that counterfeiting results in the loss of an estimated $200 billion to $250 billion dollars in U.S. sales annually. According to industry research, organized retail theft increases retail costs by $30 billion a year.
--Meg Major
This ad will auto-close in 10 seconds