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Retailers and Parallel Imports

The Retail Merchants Association publishes a magazine called NZ Retail. The June issue includes an interesting article on parallel importing. We reproduce an extract here, with permission.

The same issue also includes an article by Barry Hellberg on compliance costs. The Importers Institute recommends this publication to members, especially those who sell to retailers. The annual subscription is $68 for eleven issues. To subscribe, email your address details to Barry Hellberg, bhellberg@retail.org.nz, or phone him on (04) 472 3733.

[Extract from NZ Retail, June 2000]

PARALLEL IMPORTS FOR

Stefan Preston is Whitcoulls' spokesperson on parallel imports (and its ex-chief executive), and executive chairman of FlyingPig. Preston says turning back the clock and banning parallel importing is ridiculous, particularly in books and music, which anyone can order off the internet at global prices.

Preston has this to say. "Books were so expensive in New Zealand before parallel importing that, when it was first introduced, Whitcoulls visited publishing houses in the States to research it. Little parallel importing actually happens in books, because the threat of it meant local suppliers made their products cheaper and stopped holding-out on releases of books so New Zealand could have them at the same time as the northern hemisphere.

"Books are now 20 per cent cheaper than in Australia because the overseas suppliers are pricing books into the New Zealand market with the knowledge that businesses like Whitcoulls can go and import them direct from wholesalers. Parallel importing gives New Zealand consumers low prices and full access to books, and books are basic for education thus for the future of this country.

"It's ludicrous for the Labour government, which platforms the needs of the less prosperous, to consider legislation that will give rise to monopolies and invite high book prices. Plus, banning parallel importing will only negatively affect poorer people because the well-off are connected to the internet and will get books from offshore, at overseas prices, without paying GST.

"The government says its intention is to promote arts and culture by reinstating the ban using the argument that monopolistic licence holders will invest profits in domestic titles. Whitcoulls did an analysis on its extensive database and found that more local titles have been published annually since parallel importing became a reality than before. Arguments about supporting local talent are red-herrings monopolists use to lobby for their own interests.

"In books there are no benefits to consumers in banning parallel importing but there are benefits to distributors who will have tidy monopolies."

AGAINST

Brittain Wynyard imports sports equipment. Christopher Brittain explains that one of its brands, Wilson golf equipment, has been particularly affected by parallel importing. The Warehouse has brought in Wilson items and this has affected the brand image, Brittain says. "The items they brought in have usually been inferior close-out lines, things that are quite old and things that we would not import ourselves because, in New Zealand, the Wilson brand is sold at the serious end of the market.

"Selling Wilson at The Warehouse erodes brand confidence because The Warehouse is at the bottom of the market and Wilson is not traditionally perceived to be there. The States is big enough for Wilson to have developed a cheap mass market channel and this, plus stock from jobbers who deal in close-out sales, is what The Warehouse brings in. Wilson doesn't believe the brand belongs in The Warehouse and is working on stopping the channels that supply it."

It's a matter of identifying where product is coming from but with big brands that's not easy. Brittain claims brands don't support parallel importing and, because of this, it's difficult for parallel importers to get an ongoing supply of goods.

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