Executive Briefings

Can Manufacturers Determine Retail Pricing on Imported Products?

Buy low, sell high. Pretty simple. But a case currently before the U.S. Supreme Court tests whether manufacturers can prevent retailers from buying their products for the lowest price simply by, for example, printing the labels for the products outside the United States.

By using an "anti-grey market" copyright statute, the holder of the copyrighted work (the company that designed the label) can prevent the importation of authentic products produced for a cheaper foreign market and keep prices to U.S. retailers artificially high. It can also impose liability on the retailer that acquires these perfectly good "grey market" goods.

Take the example of a bottle of L'anza brand shampoo. The manufacturer in California sells the shampoo for say $5 a bottle in the U.S., but sells the same shampoo overseas for only $3 a bottle. Unless it violates your distribution agreement with that manufacturer, it is perfectly legal for a retailer to buy the genuine shampoo overseas, import it back to the U.S., and then resell it for a profit. But add a label to the bottle of shampoo, and the situation may change.

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Keywords: Retail, Legal, Govt. & Regulatory Issues, Supply Chain Security & Risk Mgmt, Supply Chain Analysis & Consulting, Global Supply Chain Management, "Grey Market" Goods, Anti Grey-Market Legislation, L'anza Shampoo Litigation

By using an "anti-grey market" copyright statute, the holder of the copyrighted work (the company that designed the label) can prevent the importation of authentic products produced for a cheaper foreign market and keep prices to U.S. retailers artificially high. It can also impose liability on the retailer that acquires these perfectly good "grey market" goods.

Take the example of a bottle of L'anza brand shampoo. The manufacturer in California sells the shampoo for say $5 a bottle in the U.S., but sells the same shampoo overseas for only $3 a bottle. Unless it violates your distribution agreement with that manufacturer, it is perfectly legal for a retailer to buy the genuine shampoo overseas, import it back to the U.S., and then resell it for a profit. But add a label to the bottle of shampoo, and the situation may change.

Read Full Article


Keywords: Retail, Legal, Govt. & Regulatory Issues, Supply Chain Security & Risk Mgmt, Supply Chain Analysis & Consulting, Global Supply Chain Management, "Grey Market" Goods, Anti Grey-Market Legislation, L'anza Shampoo Litigation