The cost of inaction: Why brand protection needs a seat at the strategy table

This article introduces key themes that will be explored in our upcoming webinar, “ROI of Brand Protection: Why Investing in Security Pays Off” taking place on Thursday,  13 November 2025. It outlines why brand protection is no longer optional and sets the stage for a deeper dive into its financial and strategic value.

Register now for the webinar to learn how investing in brand protection can drive growth, reduce risk, and safeguard your reputation.

Today, every business leader is acutely aware of the pressures that come with globalisation, digitalisation, and rapidly shifting markets. Yet there is one area that continues to be underestimated in many boardrooms: brand protection. Counterfeiting, product diversion, and intellectual property theft are not fringe issues confined to niche industries. They are global problems that touch virtually every sector, erode consumer trust, and place both revenue and reputation at risk.

Too often, brand protection is seen as a back-office cost or a legal formality, rather than as a strategic lever for safeguarding growth. The truth is that the cost of inaction is rising quickly, and companies that fail to address it head-on risk paying far more in the long run.

This article serves as an executive primer on why brand protection must move from the margins of corporate discussion to the heart of strategic planning. It also lays the groundwork for our upcoming webinar on the return on investment of brand protection, where the financial case will be unpacked in more detail.

The growing threat landscape

The scale of counterfeiting and product diversion has grown dramatically over the past decade. In 2021, the global trade in counterfeit and pirated goods was valued at approximately USD 467 billion, representing 2.3% of total global imports, according to the OECD and EUIPO. This is not a regional issue, nor is it limited to luxury handbags or designer watches. It is a systemic challenge that affects pharmaceuticals, electronics, automotive parts, food and beverages, fast-moving consumer goods, and even household essentials.

Electronics manufacturers continue to face substandard components entering the market, leading to safety risks and costly recalls. Even the FMCG (Fast-Moving Consumer Goods) sector, often thought to be less vulnerable, has witnessed fake products packaged convincingly enough to deceive unsuspecting customers on retail shelves and e-commerce platforms.

What makes this landscape even more concerning is the role of digital commerce. Online platforms, social media marketplaces, and cross-border e-commerce channels have made it easier than ever for counterfeiters to reach consumers directly. With sophisticated packaging, convincing websites, and international shipping networks, illicit operators can masquerade as legitimate sellers at scale.

No sector is immune, and the more valuable and recognisable your brand, the more attractive it is to those looking to exploit it.

Brand protection: Still treated as a cost centre?

Despite these growing threats, many companies still underinvest in brand protection. The perception persists that it is primarily a legal issue, managed by intellectual property lawyers through trademark filings and litigation. Others see it as an operational cost, something necessary but not directly tied to growth.

This mindset is problematic. By treating brand protection as a cost centre rather than a value driver, organisations remain reactive instead of proactive. Resources are often allocated only after a major incident has already caused reputational or financial damage.

Another reason for underinvestment is the mistaken belief that if the business has not yet experienced a visible counterfeit crisis, it is not an urgent priority. This view ignores the reality that counterfeiting often grows silently in the background, eroding margins, seeding distrust among consumers, and preparing the ground for larger problems that surface only later.

When leaders delay action, they are not saving money. They are simply deferring costs that will eventually be multiplied in the form of revenue losses, legal expenses, customer attrition, and damaged market share.

When reputation, safety and revenue are on the line

The impact of counterfeiting and diversion is not theoretical. It plays out in tangible risks to reputation, consumer safety, and company performance.

A brand that has taken decades to build can be tarnished in a matter of weeks if counterfeit goods linked to its name cause consumer harm. Even if the company itself is not directly responsible, the customer does not always make that distinction. In the eyes of the market, the brand failed to protect them.

Counterfeit pharmaceuticals or medical devices can have life-threatening consequences. Fake electronic chargers or automotive parts can cause accidents or fires. Once consumers associate a brand with risk, trust is eroded, often permanently.

Revenue leakage from diverted products, fraudulent warranty claims, or grey-market sales undermines not just top-line growth but also profitability. At the same time, regulatory penalties and the costs of product recalls can run into millions. What begins as an attempt to save costs by underinvesting in protection frequently results in greater long-term losses.

On the other hand, companies that invest in prevention reap benefits that extend beyond avoiding crises. They strengthen customer loyalty by demonstrating that safety and authenticity are core values. They also gain clearer supply chain visibility, which improves forecasting, compliance, and efficiency.

Preparing for the business case conversation

For many brand protection teams, one of the biggest challenges is translating the importance of their work into the financial and strategic language of senior decision makers. Executives want to see clear connections between investment and measurable outcomes.

There are several ways to frame this conversation:

1. Reduced warranty fraud and returns: Counterfeit products that fail prematurely often end up being returned under warranty. Effective brand protection reduces these false claims, protecting margins and lowering service costs.
2. Improved supply chain control: By addressing diversion and leaks, companies preserve legitimate sales channels and maintain pricing integrity. This not only prevents revenue erosion but also strengthens relationships with trusted distributors and retailers.
3.  Lower legal costs: Proactive protection reduces the need for lengthy and expensive litigation. When incidents do occur, companies with established monitoring and enforcement systems can act quickly and decisively.
4. Increased consumer trust and sales uplift: When customers feel confident that they are purchasing authentic products, they are more likely to pay a premium, return for repeat purchases, and recommend the brand to others.

These outcomes provide a compelling case that brand protection is not simply about avoiding losses. It is about driving sustainable growth and resilience. The financial case for investment is real, but it requires shifting the narrative from cost to value.

Webinar invitation

To explore the return on investment of brand protection in greater depth, we invite you to join our upcoming webinar.

Topic: ROI of Brand Protection- Why Investing in Security Pays Off

Date: 13 November  2025

Time: 11 AM CET

Guest speaker: Ronald Brohm, Managing Director of REACT, the global anti-counterfeiting network 

Speakers: Xavier Urbaneja, Head of Market Segment for Brand Protection, and Vincent Mathier, Technical Sales Senior Manager, SICPA

Register here

This discussion will go beyond the high-level primer offered here and provide actionable insights into how organisations can calculate, present, and realise the return on their brand protection investments.

We encourage you to secure your spot today and take part in shaping a future where brand protection is not treated as a secondary concern, but as a central pillar of corporate strategy.

Conclusion

The cost of inaction on brand protection is rising every year. Counterfeiting and diversion no longer operate in the shadows. They are sophisticated, global, and highly damaging to trust, safety, and growth. Companies that continue to treat brand protection as a minor cost will eventually face far greater financial and reputational consequences.

By recognising brand protection as a strategic priority and by framing it in terms of measurable outcomes, executives can safeguard their organisations while unlocking new value. The future of resilient, trusted brands lies not in reaction, but in proactive investment. At SICPA, our mission is to support organisations in this journey, helping them strengthen consumer trust, protect revenue, and ensure that authenticity remains at the core of their brand promise.