Electrical retailers who knowingly sell counterfeit or copied product could go to jail under a new European law.

Trade Associations will be able to initiate proceedings. Traders could be forced to disclose the sources and prices paid, have product confiscated and face fine or imprisonment.

The crackdown on counterfeiting and piracy is in a new directive to enforce intellectual property rights across Europe.

Pirated copies account for 16% of video and DVD sales in the EU, according to the European Commission. Software losses to piracy are running at around £2 billion in Western Europe.

"Businesses, which often invest large amounts of money in research and development, marketing and publicity, must be in a position to recoup their investments," says the Commission.

AMDEA welcomed the new law. "We have evidence of over 20 different products being copied and sold in Europe in recent times," said Director General Peter Carver.

"Heating, small appliances, vacuum cleaners, components have all suffered. Pirates will even copy entire manuals with some products. Our Member Company STRIX has been fighting running battles against copyists for years.

"Counterfeiting is unfair competition and dumps unsafe products on the consumer. We are pleased the Commission is taking this problem seriously, because it drains our manufacturers of the resources needed for re-investment."

Mr Carver heads up the Counterfeiting Task Force in CECED, the European Association. "We are determined to combat the copyists, wherever they come from. A major problem area is China, and we raided seven stands at HomeTech in Berlin last year. We're establishing trade show rules to keep the miscreants out in future."

The manufacturers are seeking to create an alliance against counterfeiting, bringing together governments, manufacturers and retailers to fight the menace. They have already initiated contact with the Chinese manufacturers' trade association, and hope to work with them to tackle the problems at source.

"It may seem attractive to some retailers to buy in a cheap shipment of copies. But counterfeiting is unlawful. It damages manufacturing here, threatening jobs and the economy. In the phonographic sector alone, VAT losses in Europe are reckoned to be €100 million. And copied products are often unsafe - a hazard to consumers."