Economics

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Counterfeit Hand Sanitizer? How Low Will Criminals Go?

20 May, 2020

By: Mary Helen Sprecher

Wow. How low can you go? Lower than a virus can slither, apparently.

A recent report from a promotional products newsletter carried the unhappy news that unscrupulous merchandise companies have been hawking bogus face masks, hand sanitizers and apparel items.

That’s right – just when you were hoping to stock up on such products for sports events, trade shows and event promotional bags (just in time for the resurgence of tournaments), you can’t get what you want because, well, what’s available is no good. And what's good is unvailable.

Fast Company noted that counterfeiters had been set to fare quite well by 2022 anyway in contributing to a $4.2 trillion industry. Since COVID-19 has intensified everyone’s need to feel safe and productive, (the latter owing to a combination of unemployment and stay-at-home orders), their hold over various markets has exploded, leading numerous entities to crack down on exploitative measures.

So with the proliferation of bad merchandise, including masks that couldn’t filter out a cockroach and hand sanitizer that won’t even tickle a germ, where can you find what you want?

Nowhere, at the moment.

The bad guys are able to create bad products that are profiting because of three words: Supply chain disruption. The irony is that they didn’t cause it. In early March, China was hamstrung by a crippled manufacturing industry stemming from its own anti-virus fight. As the virus spread to the U.S., an emphasis on handwashing led to an emphasis on using hand sanitizer when out in public.

The ensuing panic purchasing of hand sanitizer (you know, around the same time people were negating every store’s stock of toilet paper) inundated suppliers, who were fielding calls and emails at such a rate that some even had automatic responses telling distributors not to even bother, they’re out of stock, they won’t be in stock for a while.

And it’s a domino effect that goes right down the beleaguered supply chain, adds Promo Marketing. In fact, it’s not just shortage of the hand sanitizer itself that’s causing the supply issues. It’s also a shortage of the plastic bottles it comes in. Companies that manufacture the flip-top bottles are dealing with a supply of polyethylene terephthalate (PET) that doesn’t match demand for hand sanitizer. Because of this, manufacturers are prioritizing where their supply goes.

“We’re not selling 6 oz. containers to hand sanitizer companies, we’re selling those to yogurt companies,” Amy Waterman, a spokesperson for Berry Global Group Inc., told Bloomberg.

Even companies that pivoted from manufacturing sportswear and began working on masks, face shields and other products have experienced problems, said Promo Marketing. After all, it wasn’t as easy as just flipping a switch. There are complex supply chain issues, RFPs and regulations to learn and navigate. Import and export rules change, then change again. Lead times are long. Available stock fluctuates wildly. Information from suppliers outside the usual promo channels isn’t always reliable. Forbes reported that a Chicago-area Fully Promoted franchise owner had yet to receive a shipment of surgical masks from China 21 days after placing the order. Another promo distributor I spoke to said he had spent the last four-plus weeks “living in PPE hell.”

But hand sanitizer, masks and other PPE items aren’t the only things on sports event owners minds. Plenty of them had already ordered a full season’s supply of give-away and promo items – and those were in stock at the ballpark (or the soccer field or the football team’s offices) long before the virus was a factor.

“It seems like lately we’ve been allocating a lot of digital space toward figuring out where promotional products used for political campaigns or the 2020 Olympics will go,” noted PM’s Brendan Menapace. “Now we’re wondering where the promotional products planned for the beginning of the MLB season will go.”

Much of the merchandise – provided it doesn’t carry a date or a cultural reference that won’t make sense later on – can simply be used at a later date. When it comes to MLB game items like bobble heads and T-shirts, for example, as long as a player doesn’t get traded, that merch will still be in demand.

St. Louis, Missouri’s NHL franchise, the Blues, won’t even wait until fans can get into the Enterprise Center. The team is giving away its planned promotional items regardless, following the theory that anything can be sold for a profit, even if a game isn’t being held.

“If the remaining home games are not rescheduled, we will offer our fans a chance to purchase these items from our STL Authentics team store,” Mike Caruso, vice president of media and brand communications for the Blues, told the St. Louis Business Journal.

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