CHINA Zippo battles makers of fakes



Knockoffs made by Chinese factories are a huge problem for Zippo.
BRADFORD, Pa. (AP) -- They are as American as apple pie, as distinct as a Harley-Davidson and as original as Elvis. But increasingly, cheap knockoffs of the Zippo lighter are being made in Chinese factories that can rival the output of the Pennsylvania company itself.
The problem is serious enough, particularly in a politically contested state that has lost more than 150,000 manufacturing jobs since January 2001, that Assistant Commerce Secretary William Lash is traveling to China later this month for high-level talks about compliance under World Trade Organization rules.
Zippo has spent about $10 million investigating foreign counterfeiters, but with limited success.
The vast majority of bogus Zippos are made in southern China at factories that can knock out 45,000 replicas a day, as many as the Zippo factory in Bradford, said Greg Booth, Zippo's chief executive.
China has become more willing to crack down on counterfeiters since the country joined the WTO in 2001, but counterfeiting remains a huge problem, Booth said.
Zippo, which employs about 700 people, has refused to manufacture overseas. Its complaints will play a prominent role in the government's case that China needs to do a better job stopping counterfeiters, Lash said Monday at a stop at the Zippo Manufacturing Co. factory.
Victim of success?
In 1986, very few Zippos were sold overseas. But their reputation preceded them, in part because the lighters appeared in 1,400 American films. They were introduced to other continents in the mid-1980s and today 60 percent of all Zippos are now exported.
Regardless of what happens during trade talks, Asia remains a huge market for Zippo and other manufacturers. About 20 percent of all Zippos are now bought in Japan, though that number could be challenged by China, Zippo officials said.
China's middle class totals 350 million people. "That's bigger than our entire population," Booth said. "A third of the world's smoking tobacco is consumed in China."
Zippo is a private company and does not release sales figures.
Despite spending millions, Booth concedes the best the company may be able to hope for is to stop the spread of counterfeiting.
Zippo's success, however, is part of the problem.
"The stronger our brand gets worldwide, the more problematic it becomes," Booth said. "It's just the number of plants interested in counterfeiting."
With Zippos going for $30 in China -- a week's pay for some workers -- the demand for cheap knockoffs is immense.
Lucrative business
Counterfeiters can make so much money on fake Zippos in a few days, it can be worth setting up shop for a week, said Peter Morici, professor of international business at the University of Maryland.
"One thing about China, no matter what you're making, if you are successful, someone will copy your product and they're going to do it rapidly," he said.
Even with rampant counterfeiting, Morici and other trade experts say Zippo won't leave China anytime soon.
"This is a matter of leakage, but it's a pretty big pipe and there's going to be a lot of water running through it," he said. "It becomes a question of selling 1 million lighters when you think you could be selling 2 million."

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