Grey market' likely to grow in EU

Although many of the world's top brand manufacturers would like customers to be confused, there is a major difference between…

Although many of the world's top brand manufacturers would like customers to be confused, there is a major difference between counterfeit articles and goods imported legally but without the permission of the local distributors.In law, there is nothing wrong with selling top-notch branded goods that have been imported at a lower price from another country. In fact, this is an example of global competition benefiting the consumer.For example, an Irish company might see that while a branded Brazil football shirt costs £50 in Dublin, exactly the same shirt costs perhaps $10 in Rio de Janeiro. So long as the Irish business pays duty on the shirts, and charges VAT on their sale, it can import thousands of them, and undercut the localshops.Big-brand companies, and their distributors, go to great lengths to prevent this sort of legitimate competition, often refusing to supply stockists in poorer countries if they suspect orders are being passed on.Pharmaceutical companies, which also try to maximise the revenues from each national market, actually have a vested interest in promoting a general fear of all foreign-marked medications.But this sort of competition, known as the "parallel channel" or the "grey market", is likely to grow, especially within the EU, where there are no longer import duties and VAT rates are likely to be harmonised.