Lego Group, the company that makes LEGOs, is based in Denmark. It had $5.5 billion dollars in sales last year. Lego is a HUGE business. And a big part of that business is making kits - Star Wars kits, Harry Potter kits ... the list goes on. Lego doesn't keep making these kits forever. It retires them after a period, and at that point, these kits can become collectors' items. Some of them can become extremely valuable. And that creates an opportunity for counterfeiters.
And the barrier to entry is pretty low: it's not like counterfeiters have to replicate anything particularly technical. Legos are just little plastic bricks. They're easy to make. As a result, there is an entire company in China that turns out tens of millions of dollars a year in fake Legos.
This is intellectual property theft, plain and simple. But it's not just a portion of Lego's business that's threatened here, it's also the integrity of the secondary market in genuine Lego kits. Investors have to tread carefully. There's a real risk in buying a fake, and then passing it off as real. Reputation is at stake. Also integrity. And - potentially - a lot of money.
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