Grey Market comes out from the Shadows...

For some time now in Australia, there has been a real struggle in the wholesale, retail and parallel import arenas. Let me simplify what has occurred. Take cameras for example, when a retailer buys a camera and lets say its a Nikon, the retailer approaches the subsidiary Nikon Australia Limited and obtains their products to sell at a slightly increased margin in their retail outlets. That has been the way things have been done for many, many years. Several years ago a small parallel import or "grey" market became much larger when the Australian dollar became quite strong. Essentially third party operators found they could buy Nikon Cameras from Hong Kong / China which is the same place that Nikon Australia would obtain their cameras from and import and sell into Australia and a greatly reduced price compared to Nikon Australia. Essentially they bypass the conventions and costs that are associated with providing a sales force, repair base and offices in Australia. It is NOT that Nikon Australia is too dear, it is just that the grey market importers are not bound by the same constraints in selling to the public. For example, when a camera wholesaler offers a 12 month warranty on their products sold in Australia, a grey market operator can still advertise a 12 month warranty but what few people realise is, that the warranty is NOT covered by the wholesaler. Meaning, that if you buy a Nikon camera from a grey market operator, YES you will save money, and sometimes that saving could be in the thousands of dollars, and we all love a discount. BUT IF anything goes wrong you cannot take the camera back to Nikon under that warranty. In my opinion that is fair and understandable. There has been some issue in retail spaces in Australia over the last couple of years with retailers claiming that proper wholesalers have to pay GST on items whereas individual people and some grey market operators are not bound by the same rules and could import items into the country under $1000 with no payment of GST which clearly isnt fair, but much lobbying had been done to the federal government for some ruling in the hope it would protect the wholesale / retail arena and today 29th July the government handed down their findings......

Essentially,the Standing Committee on Infrastructure and Communications recommended the Copyright Act 1968 and the Trade Mark Act 1995 be modified to allow the parallel importation and marketing of “genuine goods”. This would allow for greater competition between a subsidiary and a grey importer, potentially leading to the former adjusting its prices. These conflicts are often seen in the photography industry, where major price differences exist between retailers and importers of name-brand DSLRs. current.com.au

So the upshot of this is that price competition is to remain the status quo which is great for consumers. an interesting finding.