This section provides an estimate of the short-term economic impact of counterfeiting on the Swiss economy. The assessment is based on the estimated value of counterfeit trade presented in the previous section, combined with an econometric model that quantifies how such illicit trade affects key economic indicators.
Counterfeiting, Piracy and the Swiss Economy 2025
Total estimated sales lost due to counterfeit goods infringing Swiss Intellectual Property Rights (IPR) reached USD 3.03 billion in 2021 (Figure 3.1). The watch and jewellery sector recorded the largest absolute losses at USD 1.44 billion, followed by the electronics sector at USD 1.05 billion. In relative terms, the clothing, footwear, leather and related products sector suffered the most, with lost sales amounting to 12.2% of the sector’s total, indicating deep market penetration by counterfeiters. The household cultural and recreational goods and electronics sectors followed with losses of 3.4% and 3.0% respectively.
In USD, mn
Note: The share of sales in the watches and jewellery sector is based on estimates of the sales value.
Counterfeiting creates a significant social cost. In 2021, an estimated 6 000 jobs were lost due to the trade in counterfeit goods infringing Swiss IPRs—equivalent to 1.4% of employment across the affected sectors. The highest job losses in absolute terms were observed in the watch and jewellery sector (over 2 500 jobs), followed by electronics and telecommunications (1 870 jobs), and the clothing and footwear sector. In relative terms, the clothing and leather goods sector was the most impacted, with an estimated 10.1% decrease in employment, followed by the watch sector at 4.5%. These figures highlight the broader economic and labour market risks posed by counterfeiting.
The trade in counterfeit goods infringing Swiss IPRs has important fiscal consequences for the Swiss government. Lower sales and reduced profit margins for Swiss rights holders translate directly into diminished corporate income tax (CIT) revenues. In parallel, the reduction in legitimate business activities leads to fewer employment opportunities, which in turn suppresses revenues from personal income tax (PIT) and social security contributions (SSC). Furthermore, to the extent that counterfeit goods displace legitimate sales within Switzerland, the government experiences a loss in value-added tax (VAT) revenues.
It is important to note that only a very small share of counterfeit Swiss-branded goods is consumed within Switzerland. Most counterfeit goods are purchased by consumers abroad and, as such, VAT-related losses in Switzerland are limited. Nevertheless, to provide a fuller picture, an illustrative estimate of potential VAT losses is included, demonstrating the type of fiscal impact such goods could have at the domestic level under different consumption scenarios.
In total, the estimated tax revenue losses linked to the trade in counterfeit goods infringing Swiss IPRs amounted to nearly USD 97.8 million in 2021. Among these, foregone Personal Income Tax (PIT) and Social security Contributions (SSC) revenues represented the largest component, reaching an estimated USD 72.5 million. This reflects the strong link between employment levels and labour-based tax contributions.
These estimates are conservative. The calculations rely on available data on wages, social security rates, employment, and company margins—data that may not fully capture the entire scope of economic activity affected by counterfeiting. As a result, the real impact on public revenues could be significantly higher.
In addition, the sectoral composition of counterfeiting in 2020–2021 played a role in moderating the fiscal effects. During this period, labour-intensive sectors such as machinery and heavy manufacturing were less targeted by counterfeiters, while more capital-intensive or export-driven sectors such as watchmaking and electronics were more heavily affected. This sectoral pattern limited the overall impact on employment and therefore suppressed the full scale of potential PIT and SSC losses. Should the structure of counterfeiting shift to more labour-intensive sectors, government revenue losses could become even more pronounced.
Source: OECD calculations.