Any Laws Protecting Businesses From Parallel Importers?

[Zen]

Hi,

I wonder if there's any laws protecting businesses from parallel importers?

Is there anything that can be done against people from selling products in the grey market? These people hand-carry the goods into Thailand and sell them at a low price. His buyers will deposit cash into his bank acount then he sends the items by post to his customers.

I know hand-carrying stuffs into Thailand to sell is really common here, but is there something I can do to stop this guy from damaging my products, image etc.....

In my country we can sue the person for lost of sales, damage to brand images etc....I'm not sure what can be done in Thailand?

Anyone got any advice or able to help?

Thanks!

[Chang_paarp]

Zen

Are you asking about someone importing a product you have a distribution right too?

ie You have the right to import "Fred's waffle Iron" from the US and some one is also importing the same item, bought from another source.

In some countries this permissable, you as the local distributor do not have to offer warantee to the parrallel import product, but have no further recource. In my industry it is cheaper to buy Fuji photo paper from a "grey" source than it is from Fuji. It comes from Europe, Fuji can not do much as the Competition Commission (ACCC) will step in and fine them, as the people are not making any false claims about the product. just smile sweetly and say take it back to the place you bought it.

Or are you talking about a product that is copied from the origional and sold as the origional?

In this case you or the manufacturer have patent and trade mark cases you can persue.

Either way in Thailand good luck.

[Zen]

Yes someone is importing the product although I have sole distribution rights to.

So i'm thinking what i can do to deter them.

Any suggesstions?

[Chang_paarp]

Find out where they are getting their product and relay the information to the licence holder. They may be less worried as they are getting the sale any way.

If nothing else negotiate a better price for yourself.

[p_brownstone]

A lot depends on the Product you are talking about.

In my business we sell quite complex equipment and Quote to local Customers giving full Specs., Installation Drawings etc.; of course once the End User gets all this information he may well be tempted to Import directly from a Buying House in the U.S. or wherever.

Our only defence is to do as Chang Paarp mentions – make it clear to all Customers that we will not be responsible for Warranty, Service or Spare Parts backup for any equipment not purchased through us as the Authorised Sole Distributor.

Since most of the Products we Represent here are critical to the overall operation of manufacturing Plants we only had to make an example of one Customer by refusing point blank to give any assistance when his Grey Market equipment failed and making sure that the matter became well known in the Market.

No more problems since.

Patrick

Edited July 19, 2006 by p_brownstone

[percy2]

Hi,

I wonder if there's any laws protecting businesses from parallel importers?

Is there anything that can be done against people from selling products in the grey market? These people hand-carry the goods into Thailand and sell them at a low price. His buyers will deposit cash into his bank acount then he sends the items by post to his customers.

I know hand-carrying stuffs into Thailand to sell is really common here, but is there something I can do to stop this guy from damaging my products, image etc.....

In my country we can sue the person for lost of sales, damage to brand images etc....I'm not sure what can be done in Thailand?

Anyone got any advice or able to help?

Thanks!

If the big car companies can't stop SEC what chance do you have.

In this situation the best way to beat them is to be better / price / service etc.

Good Luck

[Charma]

Are your prices higher due to import taxes that you are paying? If so, this guy is clearly avoiding import duty and that may be an area you could look at.

[steveromagnino]

If the big car companies can't stop SEC what chance do you have.

In this situation the best way to beat them is to be better / price / service etc.

Exactly. As long as Benz Lexus et al continue to sell the products to SEC and others, then they can expect to face grey market competition here; the solution is with your supplier who is willing to sell these things to the grey market competitors.

It sounds like, in a situation similar to Louis Vuitton, Fendi and others, that people are bringing in products and able to undercut you because they have not paid tax. LV and others compete by offering service and an experience; seems to keep them able to pay the bills. If LV sell it to someone in Paris (and they try not to, but they cannot stop it) then what do they expect when it shows up in Siam Square?

Possibly if you could prove this, you would have some recourse; however unless it is a product with a high tax rate, it may simply be that your margins are higher than what your competitors are willing to accept. Not much you can do about that. Diversifying into related services support would help, but you must have a way to enforce that, and only really works with things needing that support, e.g. a GPS.

If it is cigars, wine, liquor or similar, then you just have to accept that this is part and parcel of those businesses; worldwide everyone has to put up with the duty free product leaking in and affecting some of the market.

There are a few products where it is illegal, and of course if the person is breaching a supply contract by ordering a product with clear contract conditions that it is for use in only certain countries (e.g. US textbooks vs. the rest of the world, Americans for some reason are kind enough to pay about 2X more than anyone else for textbooks, so the publishers state clearly that the fitness for use of the book is only for everywhere EXCEPT USA/Canada right on the cover) then you could sue the vendor as they are breaching the Sale of Goods Act (I suspect). However, I doubt that this is the case. More likely, they buy retail, possibly wholesale, and bring it in and make profit by not paying duty. Personal use blah blah blah.

Lest anyone come up with that bullS&*t phrase TIT at this juncture, in NZ Grey market importing is legal and for most products cannot be blocked; thus TV direct channels, hypermarkets and flea markets alike cherry pick product lines and parallel import them in various ways avoiding tax (hand carrying it in, sending in limited quantities below the tax threshold by the dozen, transfer pricing, lying, etc). It is the future of retail. Well, that and copies; not that much you can do about it.

Edited July 19, 2006 by steveromagnino

[chuchok]

If the big car companies can't stop SEC what chance do you have.

In this situation the best way to beat them is to be better / price / service etc.

Exactly. As long as Benz Lexus et al continue to sell the products to SEC and others, then they can expect to face grey market competition here; the solution is with your supplier who is willing to sell these things to the grey market competitors.

It sounds like, in a situation similar to Louis Vuitton, Fendi and others, that people are bringing in products and able to undercut you because they have not paid tax. LV and others compete by offering service and an experience; seems to keep them able to pay the bills. If LV sell it to someone in Paris (and they try not to, but they cannot stop it) then what do they expect when it shows up in Siam Square?

Possibly if you could prove this, you would have some recourse; however unless it is a product with a high tax rate, it may simply be that your margins are higher than what your competitors are willing to accept. Not much you can do about that. Diversifying into related services support would help, but you must have a way to enforce that, and only really works with things needing that support, e.g. a GPS.

If it is cigars, wine, liquor or similar, then you just have to accept that this is part and parcel of those businesses; worldwide everyone has to put up with the duty free product leaking in and affecting some of the market.

There are a few products where it is illegal, and of course if the person is breaching a supply contract by ordering a product with clear contract conditions that it is for use in only certain countries (e.g. US textbooks vs. the rest of the world, Americans for some reason are kind enough to pay about 2X more than anyone else for textbooks, so the publishers state clearly that the fitness for use of the book is only for everywhere EXCEPT USA/Canada right on the cover) then you could sue the vendor as they are breaching the Sale of Goods Act (I suspect). However, I doubt that this is the case. More likely, they buy retail, possibly wholesale, and bring it in and make profit by not paying duty. Personal use blah blah blah.

Lest anyone come up with that bullS&*t phrase TIT at this juncture, in NZ Grey market importing is legal and for most products cannot be blocked; thus TV direct channels, hypermarkets and flea markets alike cherry pick product lines and parallel import them in various ways avoiding tax (hand carrying it in, sending in limited quantities below the tax threshold by the dozen, transfer pricing, lying, etc). It is the future of retail. Well, that and copies; not that much you can do about it.

What you have mentioned here about NZ is not quite correct. You are allowed to import copied/pirated goods for personal use.anything other than personal use is illegal.

You can also import licenced product, providing that the licience fee has been paid.eg: I can buy a ton of Nike golf shirts from a local (Legit) Nike shop in BKK and sell them in NZ.

[Chang_paarp]

What you have mentioned here about NZ is not quite correct. You are allowed to import copied/pirated goods for personal use.anything other than personal use is illegal.

You can also import licenced product, providing that the licience fee has been paid.eg: I can buy a ton of Nike golf shirts from a local (Legit) Nike shop in BKK and sell them in NZ.

Same in Oz, the record companies tried to stop parallel imports on copyright grounds and lost in the high court. It went to the government and they were told to stop gouging the consumer.

In the case I mentioned above, we buy Fuji branded photo paper for our lab at over 20% less than the best price we can get from Fuji Au (a wholy owed subsiduary of Fuji Japan). When asked to come close to the grey price they declined. The "grey" product is imported legally from legal sources. As a business which would you pick? As the item is consumable not technical we do not need a great level of support.

One way of promoting your licenced product if it is a technical product is to promote your service and back-up. Double your service charges and offer your customers a 50% discount on service. A similar process for consumables would make your product more attractive.

[Zen]

Hi guys, thank you all for sharing your experiences..

Yes this guy collects orders and gives his "friend's" bank account number for customers to deposit the cash. I did think of taking a step further through the Customs, but I doubt I'll have any luck. The guy can just give some money and get through Customs easily.

Then I thought of the Service and Spare Parts. Yes I'll reject providing service to someone who didn't buy from the authorized dealer, but the problem is I'm afraid that guy will be able to get spare parts from other sources and hand carry them in to provide the service in his grey market....

Another thing, if I lower the prices he'd go lower too...

[steveromagnino]

What you have mentioned here about NZ is not quite correct. You are allowed to import copied/pirated goods for personal use.anything other than personal use is illegal.

Sorry for being unclear; copies and pirated goods that are not legitimately made with the brand's consent are illegal so my comment does not apply.

I was only talking about legal products e.g. the nike shirts you mention after :-)

Go the All Blacks Tomora!

[Chang_paarp]

Go the All Blacks Tomora!

Wallabies