A client of ours subcontracts the manufacture of smallish high-end retail items costing about £1k.
They are the exclusive seller, the goods are not sold via distributors.
Couple of weeks back one of their customers wanted to return a batch of new goods as they had over stocked.
No problem, customer goodwill and all that, save that our client had never sold that particular item to them in the first place.
These were not fakes in the normal sense. The subcontracting manufacture had taken it on themselves to make significant extras and sell them direct to the shops, including all of the relevant security features!
The problem they now face is that they can't find capacity with another manufacturer for months and don't trust this one any more.
Owner flew out to investigate further and was greeted by officials who threatened him and his team.
Legal action on the subcontinent takes years and being in the right is no guarantee of successes and the manufacturer will just keep on making the product anyway.
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Subcontract Manufacturing at Your Peril new