Inquesta's international network of investigators can help you ferret out and check product diversions and counterfeiting.
Products intended and priced for one market are oftentimes reshipped—diverted—to another market in violation of a contract, regulation or law. Resellers of diverted products are typically motivated by the higher profits such goods generate in a different market than they were intended for.
In many ways a similar problem, piracy involves the illegal reproduction of known brand items. Usually pirated products are cheap fakes of legitimate things that are represented to be genuine and are offered at bargain prices that still generate great profits for the counterfeiters.
Luxury items, such as salon products, music or video files, or jewelry and watches, are the most commonly diverted and counterfeited. But almost anything, including pharmaceuticals and clothing, can be found counterfeited, or diverted to unlicensed distributors or unauthorized markets.
Inquesta’s international network of investigators have the experience and resources to ferret out diversion and piracy operations. We identify the perpetrators and operatives and, at a client’s request, we can cooperate with local law enforcement authorities when feasible.
Case Study: Combatting Product Diversion in the Beauty Industry
A leading international beauty and cosmetics company discovered that its products were being diverted to an unlicensed gray market by a licensed U.S. distributor, threatening its revenues and damaging its brand. To address this, the company engaged Inquesta to trace the source of the unauthorized distribution.
The investigation began with an undercover operation in the Caribbean, identifying unauthorized retailers and gathering batch and stock number data from diverted products. Information elicited from a retailer led to a suspected U.S. distributor. Surveillance of the distributor confirmed outbound shipments, which were traced to the gray market sellers in the Caribbean.
Using the evidence, the beauty company terminated the distributor’s license and contract, cutting off the illicit supply chain. This action safeguarded the company’s profit margins, market exclusivity, and brand reputation, restoring control over its authorized distribution network.
