According to the report released by the European Union Intellectual Property Office (EUIPO), the production of fake spirits and wine costs EU businesses €1.3bn annually.

The report shows that 4.4% of genuine sales of spirits and 2.3% of legitimate sales of wine are lost each year due to counterfeiting of alcoholic drinks.

EUIPO executive director of the António Campinos said: “The spirits and wine manufacture sector in the EU is overwhelmingly made up of small and medium enterprises, with an average of ten workers per firm.

"The spirits and wine manufacture sector in the EU is overwhelmingly made up of small and medium enterprises."

“This report shows the economic impact of counterfeiting on this industry, and its consequences for the EU economy as a whole. Our findings are intended to help policy makers as they respond to the challenges of counterfeiting in this crucial economic sector.”

The loss in the legitimate sales of spirits and wine has resulted in 4,800 jobs directly lost across the spirits and wine sectors in the EU, as legitimate wine and spirits producers are employing only few people, than they would have done in the absence of counterfeiting.

Because of these counterfeit products in these sectors across the EU-28 in terms of household income taxes, social security contributions, corporate income taxes, VAT and excise duties the government is losing approximately €1.2bn.

The report released by EUIPO is the eighth in a series of studies via the European Observatory on Infringements of Intellectual Property Rights into the economic impact of counterfeiting in industrial sectors in the EU.