Demand for fake designer goods is soaring

The must-have look for Britain's wealthiest consumers this season combines all the top luxury brands. The shoes are by Prada, the handbag is from Louis Vuitton and the watch is a Bulgari.

The jacket, however, is 100 per cent counterfeit. Bought at a fraction of the price of the other items, it is likely to be the handiwork of an unregulated Chinese sweatshop linked to the drugs trade, knocking out fake garments on an industrial scale.

But a report says the owner of this fashionable wardrobe almost certainly does not care that part of it is counterfeit. Research has found as many as seven out of 10 buyers of luxury goods are willing to "mix and match" designer brands alongside known fakes. And evidence has emerged of a soaring market for "lookalike" goods in which cheaper products are passed off as the real thing, simply without the designer label.

The report from the law firm Davenport Lyons found that while one in eight British adults had bought fake designer clothes, footwear or jewellery in the past year, half had bought a lookalike. More than half said lookalikes were beneficial, making designer goods more affordable.

The demographic breakdown of the consumers who admitted buying fakes revealed they were likely to be earning more than £50,000, under 35 and married or in a relationship. The findings prove a far cry from the popular image of the devotees of fake brands as "chavs". Dawn Sanderson, of Davenport Lyons, which specialises in branding and copyright, said the report's authors were astonished at the level of acceptance and ignorance among consumers over fakes.

"It has become a lifestyle choice. Someone might buy a Prada bag and mix and match it with a lookalike pair of shoes," she said. "They say 'I'm happy to buy luxury items but I'll combine them with non-brand items'."

British buyers of fake goods favoured products claiming to be made by Burberry, followed by Gucci, Louis Vuitton and Yves Saint Laurent. The report found that Gucci and Louis Vuitton are in danger of being outsold by counterfeiters.

The research will make sober reading for the luxury goods makers who have always believed their well-heeled customers are unlikely to be tempted by fakes. However, they are under no illusion over the scale of the problem. It is estimated that UK industry loses £9bn a year from fakes, costing the Government £1.5bn in lost tax revenue.

Burberry has a team to combat counterfeits, including a unit dedicated to monitoring the sale of its goods on eBay. "We have a strong in-house team which works closely with local authorities throughout the world. When a case is proved we always push for the maximum penalty," a spokesman said.

This week the European Union justice commissioner, Franco Frattini, proposed sanctions that would see counterfeiters jailed for four years. Ruth Orchard, the director-general of the UK's Anti-Counterfeiting Group, said people were still failing to grasp that there are proven links between counterfeiting, organised crime and even terrorism. The makers of fakes are not subject to the same safety standards, labour protection laws and do not pay tax, she said.

"Getting a good fake is now almost something to show off about. The counterfeiters are upping the ante, charging more and more and making more profit. But the same Mr Bigs are involved, using the same containers to export clothes as they do drugs or to smuggle people."