Hot on the scent of the Calvin Klein fakers

The American designer and perfumier Calvin Klein has recruited a team of investigators to track down the suppliers of counterfeit scent and clothing which are flooding British markets.

The faking of top labels is a widespread problem across the globe but Calvin Klein decided to recruit forgery detectives in Britain because it is so rife here - and so sophisticated.

Just how sophisticated was made apparent by a recent raid in North Wales by police and trading standards officers. In a Deeside factory, equipped with hi-tech machinery for printing fake designer clothing and champagne labels and car registration discs, they found 22,000 bottles of imitation CK Be - Calvin Klein's latest perfume - with a street value estimated at more than pounds 750,000.

Then, a week later, police investigating a ram-raiding at a warehouse in Doncaster, South Yorkshire, uncovered several more crates of CK Be and labelling equipment.

What was particularly alarming was the speed with which the counterfeiters had worked - the Deeside raid took place the day after the company had launched CK Be in the UK.

Firms whose goods are counterfeited say that they not only lose out on sales but also their name can be tarnished by being linked to products which are often highly inferior.

Al Checkett, the US-based director of corporate security for Calvin Klein Cosmetics, said: "Although the packaging is usually excellent, the quality of the product is extremely variable.We have found muddy water in some bottles, and in most cases the imitation fragrance does not last more than a few minutes. There may also be associated risks of skin irritations."

Counterfeiters are attracted because the products are easy to imitate and the potential rewards are huge.

"A counterfeit bottle sold at a market or a boot sale will cost between pounds 10 and pounds 15. It would have cost no more than pounds 2 to make," Mr Checkett said.

A comparable bottle of genuine CK Be costs about pounds 28.75 in the UK.

Many of the goods targeted by counterfeiters are not only expensive but also have restrictive sales policies so that their exclusivity is enhanced.

Often designers grant licences to sell their wares to a limited number of shops. As a result, the counterfeiters cash in both by undercutting the high-street store price and meeting a demand for a product in limited supply.

To see where many of the counterfeit perfumes, shirts and watches end up, simply take a walk along the major high streets in the larger towns of Britain. With a cardboard box full of fake goods, and a nice line in patter, stallholders set up shop until they have sold out - or are spotted by the police.

The Calvin Klein investigators work by hunting these stalls, and collecting documentary and photographic evidence.

Information is then handed over to the police and town-hall trading standards officers who can prosecute under the Trademarks Act. Those found guilty could face up to 10 years in prison.

One of the Calvin Klein investigators, who did not wish to be named, said: "We have to catch the goods in bulk when they are in a warehouse. By the time they've been moved for sale it's too late.

"The distribution network is so fast. Within 24 hours of these guys sending out batches of 20,000 bottles of perfume it has all been broken down into boxes of 20 being sold all over the country and Europe by people who make it their business not to ask where the cheap stuff has come from.

"There is just so much money in all this it is hard to believe. What better market is there to ape? After all, every single Calvin Klein perfume has done tremendously well."

Calvin Klein's investigations convinced the company that Britain was the centre of the European market for the counterfeit perfume racket, with fakes being exported to France, Spain and Germany.

"We have even seen profits from counterfeit perfumes go towards funding terrorist groups, including the IRA," said Mr Checkett.

Calvin Klein is not the only designer affected in Britain. The raids which uncovered CK Be perfume also led to the discovery of thousands of swing tickets and logos for Ralph Lauren, Ellesse, Kickers, Nike and Adidas, along with Giorgio Armani watches.

The same organisation employed by Calvin Klein also works for Ralph Lauren and US casual-wear company Tommy Hilfiger.

Hilfiger, which is poised to launch in the UK market, has already proved popular with the counterfeiters, who are supplying vast numbers of British clubbers with the chinoslacks and button-down shirts which have proved successful in the hip-hop scene in the US.

A spokesman for Giorgio Armani said counterfeiting could have a "serious negative effect in terms of image". He added: "Our policy is to pursue aggressively any counterfeiting of our brands anywhere in the world."

Five people have been arrested and bailed by North Wales police pending further inquiries.