Th e electrical contracting

Th e production and availability of counterfeit goods has been a longstanding issue in the electrical contracting sector. We examine the scale of the problem – and the dangers of being tempted by deals which seem to be too good to be true

BY ROB SHEPHERD

Product counterfeiting is a big business. A recent report from the Organization for Economic Cooperation and Development put the value of fake goods at more than £400 billion – a fi gure equivalent to 3.3 per cent of world trade. Lighting devices, cable, wiring accessories, circuit breakers and fuses are just some of the products in electrical contracting that are counterfeited and readily available for contractors to use, knowingly or otherwise.

Th e word ‘counterfeit’ refers to a product that illegally uses a manufacturer’s branding and infringes intellectual property rights in order to dupe a potential purchaser. Th is is diff erent to a product that is simply substandard and doesn’t meet regulatory compliance. Nevertheless, there are always people willing to produce goods that are designed to lull unsuspecting purchasers into a false sense of security.

Jeremy Hodge, British Cables Association (BCA) secretary general and director of the Approved Cables Initiative (ACI), says the matter is particularly problematic in the electrical contracting sector. “Th e main issue is the risk of an installation that fails an inspection or a test and needs extensive rework,” he says. “For cable that has been permanently fi tted into a building, the cost of rework could be many multiples of the diff erence between the original cable cost and the counterfeit. With this then goes reputational damage, which can take a while to recover – if it does at all.”

It is surprising that any reputable electrical contractor would risk purchasing such products, but

30%: THE PROPORTION OF PEOPLE WHO HAVE BOUGHT ELECTRICAL PRODUCTS ONLINE THAT TURNED OUT TO BE COUNTERFEIT

£400BN: THE GLOBAL VALUE OF FAKE GOODS

Mark Froggatt, technical director at the British Approvals Service for Cables (BASEC), believes that the tendering process is a factor. “Every penny counts, and it is this fi nancial pressure which can create problems, leading to the use of counterfeit goods,” he warns. “However, opting for a low-cost product that does not hold any formal product approval will have a higher chance of causing issues further down the line.”

WEB OF DECEIT

Online trading has introduced additional opportunities for counterfeiters. Th e scale of this problem has been highlighted by Electrical Safety First, which found that some of the most popular e-commerce sites are being used to exploit online shoppers, exposing them to thousands of substandard, counterfeit and suspected recalled electrical goods.

“We surveyed 2,000 people and found that 30 per cent have bought electrical products online that turned out to be counterfeit,” explains Martyn Allen, technical director at Electrical Safety First. “We also found that 92 per cent of people think online retailers have complete control over third-party sellers, regulating what goods they off er. Th is isn’t the case.”

Chris Stammers, compliance services manager at the British Electrotechnical and Allied Manufacturers’ Association (BEAMA), shares this concern. “With the exponential increase

in the size of the global online marketplace, the risk of noncomplaint or counterfeit electrical products reaching the UK market is increasing,” he says.

“Electrical contractors should be aware that if they purchase electrical equipment online from an overseas source, they will be legally classifi ed as the equipment importer and have the added obligation of ensuring the equipment is designed, examined and tested to be electrically safe and compliant. Having the CE marking stamped on a product is not in itself proof of compliance.”

Wiring accessories are some of the most counterfeited electrical products, and sophisticated production techniques mean it is often diffi cult at fi rst sight to distinguish the fakes. Counterfeit plugs, socket outlets and plate switches are often superfi cially good copies of the genuine article and carry what appear to be the correct trademarks and approvals.

Some companies in this sector are fi ghting back against the counterfeiters. Peter Bridgwater, Scolmore’s purchasing director, gives the example of CDS Superstores – trading as Th e Range – which had been selling domestic lamps with counterfeit plugs that were copies of Scolmore’s genuine products. “We secured an injunction against CDS Superstores preventing it from dealing with any counterfeit Scolmore products in future and we were paid a substantial sum in damages,” he says. “We will always pursue any infringer and are prepared to fi ght our cases on multiple fronts in diff erent countries.”

ON THE WIRE

Due to the price of copper, electrical cable is often targeted by counterfeiters, too. Some have reduced the diameter of the copper wire, which has the eff ect of reducing the current rating and increasing the resistivity of the cable. Th ere have also been instances where materials other than pure copper, such as steel wire and copper clad aluminium, have been used.

“Unscrupulous manufacturers could be tempted to reduce the copper content in attempts to save costs,” points out Froggatt. “Th is can have very serious knock-on eff ects, one of which is undersized conductors, which is a high-risk safety hazard. While in operation it can put additional stresses on the product, leading to overheating and increased risks of fi re.”

For cable manufacturers such as Prysmian, counterfeiting is not the key issue – substandard and noncompliant cable is. “Insuffi cient copper or non-electrical grade PVC cause real safety concerns,” says Simon Hopkins, marketing manager at Prysmian. “Cable that is substandard, or used in the wrong situation, is a life-threatening hazard, so particular attention must be paid to the Construction Products Regulation (CPR). Labelling in relation to CPR is a legal requirement and shows that a manufacturer has designed and tested cable for reaction to fi re.”

TAKING THE INITIATIVE

A great deal of work has been done to address the problem – often with collaboration from all sectors of the industry. For example, BEAMA’s Anti-Counterfeiting Working Group was formed in 2000 to take action against counterfeit products and the traders who distribute them. Th is was boosted in 2008 with the launch of Th e Electrical Installation Industry Charter, a pan-industry association operation that is backed by organisations including BASEC, BEAMA, BCA, the Electrical Contractors’ Association and the Electrical Distributors’ Association.

Similarly, the ACI investigates unsafe, non-approved and counterfeit cables and raises awareness of this issue. It also lobbies government to enforce and develop legislation, ensuring that only cables that fully comply with British, European or international standards and carry a third-party certifi cation can be manufactured for sale in the UK. If the ACI fi nds unsafe cables, details are passed to the police, Trading Standards and the Health & Safety Executive.

Fighting the counterfeiters remains a tough challenge, though. “Unfortunately, enforcement in the form of the police service and border force has been severely aff ected by government cutbacks – being reduced by 20 per cent in the last seven years,” says Stammers. “Furthermore, Trading Standards staff numbers have suff ered even more severely, so the risk of being apprehended has diminished as the scale of the problem has increased.”

Everyone likes a bargain, but we all know that you usually get what you pay for. Electrical contractors need to remember that they are legally liable for the services provided under contract for six years from completion of the works. Furthermore, if someone becomes hurt, or worse, as a result of having had products supplied and installed that are counterfeit and/or do not meet the required standards, there will be serious repercussions.

Rob Shepherd is a freelance business journalist who specialises in the building services industry

‘Opting for a low-cost product that does not hold any formal product approval will have a higher chance of causing issues’