Sales of security inks and coatings in Western Europe went up 14 percent in the two years to 2007 to $281 million, according to IntertechPira, a market research organization in Leatherhead, England, which is forecasting annual average of 12.4 percent growth over the next five years. The total brand protection market in Western Europe went up 19 percent to $1.4 billion from 2005-2007. Globally, the brand protection market expanded by 23 percent in the two years to 2007 to $5.6 billion.
Some observers believe that the market for security inks and other anti-counterfeiting products should be far bigger because of the extent of anti-counterfeiting in the world.
Counterfeiters across the globe are estimated to be producing fake branded products, banknotes, identification and other valuable documents which are sold for nearly $500 billion. There is also a vast amount of gray or parallel trading of products which have been manufactured by their brand owners but are being sold without their consent outside their own distribution channels.
The extent of counterfeiting is exemplified by the fact that ink developers and suppliers have to take steps to safeguard the identity of their own inks. Xaar, the UK manufacturer of inkjet printheads and also develops ink formulations for use on its equipment, runs a system of approved inks that carry its seal of approval and a tamper-evident hologram in order to deter counterfeiters.
In the EU, 250 million counterfeited and pirated items were seized by custom officials in 2006, three times more than in the previous year. In Germany, pirated goods with a value of €1.2 billion ($1.8 billion) were discovered by customs staff in 2006, which was five times higher than in 2005.
“The market for security inks and electronic devices like RFID tags should be worth several billions of dollars given the amount of counterfeiting and illicit trading of products which is going on,” said Raghu Das, chief executive of IDTech Ex, a market research organization at Cambridge, England.
“Brand owners are not willing to spend much money on anti-counterfeiting, particularly if they consider it to be expensive,” he continued. “Instead, they are buying anti-counterfeiting products which are much less effective than those which are actually available.”
IDTech Ex estimates that in 2007 the world sales for RFID tags amounted to $1.7 billion out of total market for radio frequency identification, including hardware and software, of $5 billion. The tags sector was dominated by the US and Europe, with sales in Europe amounting to around $570 million compared with about $900 million in the US. Yet only a small proportion of the tags sales were for security or brand protection. A large proportion were for identification of pallet and cases in transportation and smart cards, such as those used for personal ID systems.
IntertechPira believes that within Western Europe, sales of RFID products for brand protection amounted to only $29 million in 2007. Still, this was 34 percent more than two years ago, while over the next five years IntertechPira forecasts average annual growth of 29 percent.
At present, companies are concentrating their expenditure on the simpler security technologies which at least show consumers they are trying to do something about counterfeiting or the tracking and tracing of products.
“There is a lot of interest among brand owners in security, until they hear how much protection will cost them,” said an executive at one ink materials supplier. “Their enthusiasm tends to wane when they realize that the security component in the ink might need special equipment to detect it.
“Even pharmaceutical companies generally want the security ink to cost only a small percentage of a dollar per pack although the medicine itself may cost as much as $30 per pack,” he added. “Some pharma companies tend to get serious about doing something serious about security only when one of their products gets hit by a counterfeiter.”
In a recent report on counterfeiting and piracy, the Paris-based Organisation for Economic Development and Co-operation (OECD), which represents the world’s advanced economies, split security technologies into two groups. One consisted of methods for authenticating products, while the other comprised systems for tracking and tracing the movement of products through supply chains.
It then broke down the anti-counterfeiting technologies into four types. There is the overt kind in which markings, such as barcodes and holograms, are visible to the human eye under standard viewing conditions. In the case of barcodes these would still need to be identified by a reader.
Then there is the hidden device which, although embedded into the packaging, could be partly visible but usually can only be completely revealed by a reactive or laser pen, an optical filter or a UV light source. Another type is covert so that it not normally visible to the human eye and requires more specialist detection equipment to view it.
Finally there are the forensic systems, normally comprising sophisticated taggants made from unusual non-reactive chemicals which need to be detected in the security ink by in-field assay kits or through laboratory analysis. Since the composition of the product requires forensic analysis, it can provide the sort of evidence necessary for prosecuting a counterfeiter or his agent in court.
Ink Manufacturers and Security
Ink companies in Europe like SICPA, the Swiss-based specialist in security inks, Flint Group and Sun Chemical offer security products.
In the pharmaceutical and other sectors vulnerable to counterfeiting, SICPA supplies security inks, devices and services covering the whole packaging process and the stages of the value chain. These include tracking and tracing, anti-counterfeiting capabilities and systems which enable manufacturers or third parties to verify their products’ authenticity, make product diversions more difficult and provide corroborative evidence for legal cases.
SICPA can also provide RFID tagging for packages, boxes and pallets, backed up by additional security features.
Although Flint Group sold its security inks business to SICPA four years ago before it was merged with the former inks activities of BASF and Akzo Nobel, its XSYS Print Solutions operation for narrow web label inks provides security products. These range from overt features in security inks to taggants made by Microtrace, Elgin, IL, for formulation by XSYS into inks.
Sun Chemical has a security inks business which covers all the levels of protection from overt to forensic systems. It operates according to a best practice protocol in order that the supply chain both inside and outside the company, particularly raw material providers such as pigment makers, is completely secure.
“Only authorized people have access to our formulations,” explained Philip Berrie, head of Sun Chemical’s security operation in Europe, Middle East and Africa. “We even have high security products moved around in cages so no unauthorized person can get hold of them. At the forensic level we can provide expert witnesses to appear in court cases.”
Sun Chemical has been involved with the PrintCity alliance of European print industry companies on a project to develop brand protection packaging for pharmaceuticals. PrintCity plans to demonstrate a box incorporating the secure packaging features at Drupa this summer at Dusseldorf, Germany.
“It will be a multi-layered concept in that it will apply all the different levels of security from overt to the forensic,” said Mr. Berrie.
XSYS has developed a holographic ink which can create numerous holograph colors and patterns. This ink is marketed on the basis of its ease of use, versatility on multiple substrates and its UV curability.
“It creates the illusion of a genuine hologram without the need to print on an expensive holographic material,” said Niklas Olsson, global brand manager at XSYS Print Solutions, Trelleborg, Sweden. “We see major interest in this technology to offer cost effective overt brand protection as well as offering great differentiation possibilities with stunning graphic effects that makes brands stand out.”
With a growing number of brand protection systems, metalized holograms are now being replaced by features applying color shifting technologies. “The advantage of the color shifting device is that they are the equivalent of ink-based holograms and do not require special equipment for heat stamping,” said Mr. Berrie. “You can choose two colors which will shift from one to the other according to the viewing angle.”
Manufacturers of electrophotographic presses, which often develop and make their own toners, have been extending their range of security aids so that they are similar to those provided by security inks. These include fluorescent print, which is only detectable under UV light, micro print which can only be seen under a microscope and infrared text which can only be viewed with an infrared detector.
A growing proportion of brand packaging and valuable documents now have as a matter of course security features, the majority of which can be seen by the human eye. But the key issue is how long it will take brand owners and other end users to request more sophisticated security printing.