FMN | August 3rd, 2020

FMN | August 3rd, 2020

Vol. 22 No. 16 An N.V. Publication Market News FLEX Serving The Flexographic Printing Industry For More Than Two Decades ®

August 3, 2020

COVID-19 Pushes Counterfeiting Higher

FTA Fall Conference Goes Virtual The FTA has made the decision to move Fall Conference 2020 to a ful- ly virtual environment. Now known as Virtual Fall Conference 2020, it retains six of its technical sessions, evolves into a fully online exhibit space, and adds opportunities to con- nect with attendees before, during and after the event. Technical Sessions The decision comes following an arduous review of the issues raised by the ongoing COVID-19 pandemic, travel and in-person gathering restric- tions, the state of business in the flex- ographic industry, and above all, con- cern for the safety and wellbeing of FTA members.Virtual Fall Conference 2020 will take place October 5-7 in FTA’s Virtual Conference Center. Each day will begin with a pair of back-to- back technical sessions. Attendees will be able to listen live to industry experts discussing essential topics, dissect a print sample sent to regis- trants,participate in live polls and ask questions to presenters.

by Greg Kishbaugh

T he COVID-19 pandemic has fundamentally altered the way businesses operate.There are overwhelming challenges that lie ahead and adding to the enormous pressures already bearing down on companies, an age-old problem continues to grow. Taking advantage of an unstable situation, counterfeiters have expanded their operations and pose an even greater threat to the health and safety of consumers than ever before.

The National Association of Manufacturers has released new research entitled “Countering Counterfeits,” that analyzes steps that Congress, the administration and the private sector could take to help combat the problem. “As Americans battle an unprecedented global health crisis, we are also battling a second threat: fake and counterfeit products that harm consumers and undermine manufacturing in the Unit- ed States,” said NAM Senior Vice President of Policy and Govern- ment RelationsAric Newhouse.“COVID-19 has provided new op- portunities for counterfeiters to prey on consumers’ anxiety and use the high demand for online goods to boost their illicit profits—

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Heidelberg Retreats From Flexo With Gallus Sale Having decided to focus on its core business of sheet- fed printing, Heidelberg is selling the Gallus Group to the Swiss packaging business benpac holding, six years after purchasing the company. The transaction will see benpac assume owner- ship of Gallus Holding AG in St. Gallen, Gallus Ferd. Rüesch AG in St. Gallen, Gallus Druckmaschinen GmbH in Langgöns, Heidelberg Web Carton Con- verting GmbH (WCC) in Weiden in der Oberpfalz, and Menschick Trockensysteme GmbH in Rennin- gen – five sites with a total of some 430 employees in Germany and Switzerland. With an agreed pur- chase price of some 120 million euros, Heidelberg is expecting the deal to generate earnings in the mid two-digit million-euro range.The parameters will be finalised at the time of closing. The sale, which still needs to be approved by the relevant bodies and is subject to other condition precedents, is set to take effect before the end of 2020. “We are selling our narrow-web rotary and rota- ry flexographic printing activities to focus more closely on innovative solutions for the entire print- ed sheet value chain,” said Heidelberg CEO Rainer Hundsdörfer.

While the COVID-19 pandemic continues to cause enormous difficulties for converting companies both large and small, press manufacturer Uteco has seen steady business over the past seven months. The company has reported press installations in Utah,Maryland, NewYork,Texas,Arizona,Alabama, and two installations in Montreal. Sapphire Expansion Additionally, the third Uteco Sapphire Evo M press has been shipped to a North American flexible pack- aging converter, where it will be used for large quan- tities of short run jobs. Other two presses are already installed in Italy and Japan. The Sapphire Evo M Press was developed jointly by the Uteco Group and Kodak to help flexible packaging printers migrate jobs from traditional printing processes to digital.The machine utilizes Kodak’s Stream continu- ous inkjet technology and water-based pigment inks from Kodak and supports a maximum web width of up to 25 inches. It features production speeds of more than 500 feet per minute. Uteco also reports that a Sapphire Evo W 53-inch digital press will be coming into North America by the end of the year.

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Counterfeiting Growth (Cont’d from Page 1) all at the expense of American workers, consumers and businesses. The NAM is leading the fight against counterfeiters to ensure the strength and stability of our economy and the health of the American people.” Counterfeiters target a wide range of products, a far greater swath of goods than most consumers would ever imagine. The recent rise in e-commerce, further fueled by the COVID-19 outbreak, has led to a mas- sive uptick in fake consumer products, especially in China. In 2019, more than 8 of every 10 counterfeit products seized at United States borders came from China or Hong Kong. Counterfeiters have exploited the anonymity and lack of oversight afforded through e-commerce to continue to push illegal goods. E-Commerce Surges E-commerce sales now make up 10 percent of all re- tail spending, up from 3 percent of total sales in 2009. Pre-COVID-19 estimates predicted that global e-com- merce sales would exceed $4 trillion in 2020,with U.S. e-commerce spending to exceed $1 trillion by 2025, doubling the volume from 2018. The spike in e-com- merce during the COVID-19 pandemic has added fuel to the fire and will push these numbers even higher. A surge in counterfeits accompanies a growth in e-commerce. And with the extraordinary growth of e-commerce sales, which are expected to exceed $4 trillion by 2020, counterfeiting will continue to surge, as well. According to recent statistics, the global trade in counterfiet goods exceeded an astounding $500 bil- lion in 2016, which is 3.3 percent of all global trade. It is estimated that authorities in the United States catch less than 2.3 percent of the total volume of counrter- feit goods. The NAM estimates that counterfeiting subtracted nearly $131 billion from the U.S. economy in 2019, in- cluding $22.3 billion in lost labor income and more than 325,500 fewer American jobs. This upsurge in counterfeiting threatens the invest- ments that manufacturers put into developing new products and violates their intellectual property rights. Manufacturers in the United States perform nearly two-thirds of all private-sector research and develop- ment, totaling $271 billion in 2018.14, according to NAM’s report. The activities of counterfeiters can do irreprible damage to the brand loyalty in which companies de- vote so much money, resourcs and attention. Con- sumers become confused about the quality and ori- gin and products and services when trademarks are infringed upon.

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Pouches Provide Added Safety Precautions

Label Academy Hosts Virtual Master Class

Single-serve, snack packaging is more popular than ever, especially among today’s emerging generations who desire convenience and portability above all.The recent COVID-19 outbreak has fast-tracked this trend for single-serve packaging as consumers want extra as- surance that their favorite snacks are safe to eat and have been handled by as few people as possible. Pack- aging is now recognized as a valued tool in ensuring product and consumer protection, increased shelf life, and safe delivery. GreenSeed, a contract packaging operations compa- ny that designs and manufactures custom packaging solutions for dry foods and supplements in the natu- ral products category, can accommodate all types of applications, including small or large format pouches, stand-up, easy tear, and zippered designs, all with hori- zontal form fill seals.The company reported increased demand in single-serve pillow pouches since the onset of the COVID-19 pandemic. In addition to their safety features, pouches are easy to customize. GreenSeed has worked with numerous CPGs to redesign and“right-size” their pouches,which were bigger and bulkier than necessary.

At the end of June, approximately 150 attendees took part in the Label Academy’s first online master class targeting an international audience. Prior to this, Label Academy master classes had never been held outside of Labelexpo shows. The Digital Printing Technology master class gave at- tendees a unique insight into the technologies, mate- rials, finishing, embellishment and workflow software available to converters.

Hubergroup Implements New Corporate Strategy

International printing ink manufacturer hubergroup has repositioned itself. Effective immediately, the pro- duction and marketing of raw materials for printing inks and coatings will be handled by the Chemicals Di- vision.With its product portfolio, it is primarily aimed at the printing and packaging industry, as well as the paint and coatings industry and chemical companies. To diversify and divide the business into two divisions —Print Solutions and Chemicals — is a strategic cor- porate decision.

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Covid-19 Boosts European Label Demand

After two years of modest, 1.5 percent annual de- mand growth in 2018 and 2019, the Covid-19 pandem- ic has boosted European demand for self-adhesive la- bel materials in the first half of 2020, according to the 13th edition of FINAT’s six-monthly Radar. Consump- tion of labelstock materials in the wider European eco-

nomic area was more than 8 percent above the level recorded in the same period last year. In the second quarter alone, demand for filmic roll label materials even exceeded the second quarter of 2019 by almost 25 percent. Increasing Demand The incremental demand increase for label materials in the first half of 2020 was almost 320 million square meters. More than half of this (53 percent) was com- posed by filmic label materials. In relative terms, the most severely affected regions, UK and Ireland and Southern Europe,were behind the other (double digit) regions but still recorded sizeable increases. The excessive overall demand growth in the first month (most likely reaching its peak in the first three months of the Pandemic, with the European econo- my in lockdown) was attributed to the crucial role of self-adhesive labels as enablers of the critical infra- structure in times of crisis: food, healthcare, person- al care, sanitary products and supply chain logistics. This effect was compounded by stockpiling at retail- ers and brand owners, and the fact that households in lockdown decided to spend their spare time on home maintenance and home delivery of goods and services. Finally, with lockdown measures being released, it can hardly go unnoticed that self-adhesive products play an important part as ‘social distancing’ markers. On the other hand, label demand in ‘non-essential’ sectors like automotive, electronics, travel and cater- ing were suffering in the first half of 2020.The first two

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Counterfeiters also force companies into diverting resources to policing and protecting their brand, pull- ing necessary resources away from critical business operations. Sadly, small and medium-sized manufacturers are the most likely to be harmed the most by the coun- terfeit market and risk being driven out of business as they are unable to offset losses from counterfeit- ing activities. Of course, consumers themselves are put at great risk from counterfeit products.According to Customs and Border Protection, 16 percent of the 31,560 ship- ments of counterfeit goods seized in 2016 contained products posing threats to consumer health and safety. “Counterfeiting is a complex problem that requires unwavering commitment from the private and public sectors to solve,” Brian H. Monks, Vice President and Chief Security Officer, UL.“UL’s Project Centurion, an effort to reduce counterfeit products in the market- place by leveraging a global safety network, led to over 270,000 counterfeit UL Marked products seized globally in 2019, valued at $23 million. UL’s Anti-Coun- terfeiting Innovation Center combines expertise from law enforcement, retailers, e-commerce platforms, government officials and others to address complex Counterfeiting Growth (Cont’d from Page 4)

counterfeiting challenges, reframe problems and im- plement innovative solutions.The Center aims to lead in anti-counterfeiting innovations that drive globally relevant, cost-effective solutions that advance public safety and build capacity within law enforcement and private sector organizations to combat IP crime.” Tackling The Problem A strong and concerted effort is required to tackle this enormous problem. NAM suggests a series of specific actions that all stake- holders can take to reverse the rising tide of counterfeit products.These solutions fall into five areas: Requiring E-Commerce Platforms to Reduce the Availability of Counterfeits Congress should pass legislation requiring e-com- merce platforms to improve vendor screening, remove counterfeit listings and share information with brand owners and consumers. Legislation could assign con- tributory liability if they fail to act. Modernizing Enforcement Laws and Tactics to Keep Pace with Counterfeiting Technology U.S. laws should be modernized to match enforce- ment needs. This includes updating the definition of counterfeit goods and contributory liability and ensur- ing the full enforcement of existing laws to prevent

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