Grey importers must inform consumers, inquiry finds

A

arf9999

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This is slightly OT for this forum, but still relevant I think in that it covers IT products.

http://www.busrep.co.za/index.php?fArticleId=3202322&fSectionId=552&fSetId=662

It has recommended to trade and industry minister Mandisi Mpahlwa that this practice be declared a harmful business practice and prohibited.

The unfair business practice involves the advertising, promotion and/or offer for sale of unauthorised branded products. This is when the end users have not been alerted by the seller that it was not authorised by the manufacturer to be an authorised distributor of the branded product. It also means that the authorised South African distributor is under no obligation to honour the manufacturers' warranties, guarantees and/or after sales support.
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I wonder how HiFi corp feels about this...

It does look like this recommendation is being made in the interests of consumers, not just the local distributers:

Bonke Dumisa, the vice-chairman of the committee, stressed in its report that the committee's sole function was to protect consumers from exploitation in the form of unfair business practices by investigating and recommending the prohibition and regulation of such practices to Mpahlwa.

He said: "Protecting licensed importers by a total ban on unlicensed imports could ultimately be more harmful to the economy than the importation of products which do not match local conditions.

"This would deprive consumers of their right to choose. Consumers have the right to choose to buy goods for which there is no warranty or back-up service, provided they are aware of the facts and make informed decisions to purchase products on this basis.
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This answers one of my biggest arguments against HiFi corp. At least now they have to tell you which of their products are officially distributed and which are grey imports. And it means that they will have to stop with their "parallel imports are not grey" crap.
 
pope24 said:
This answers one of my biggest arguments against HiFi corp. At least now they have to tell you which of their products are officially distributed and which are grey imports. And it means that they will have to stop with their "parallel imports are not grey" crap.
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agreed. consumer rights are abused daily by corporations. it is gratifying to see our rights being protected.
 
"It also means that the authorised South African distributor is under no obligation to honour the manufacturers' warranties, guarantees and/or after sales support."

and

"importation of products which do not match local conditions"

I call bullsh1t.

I've never understood why this is generally accepted. Why are companies allowed to scare consumers into paying inflated prices by refusing to honour warranties etc. Compare, for instance, digital camera prices to those in the UK. Dixons in the UK charges 492 pounds (about R5400) for the Canon EOS 350D kit. Kalahari.net's price, R8500!

Just because it's authorised distribution. This is just another way the SA consumer gets shafted.
 
BruceS said:
"It also means that the authorised South African distributor is under no obligation to honour the manufacturers' warranties, guarantees and/or after sales support."

and

"importation of products which do not match local conditions"

I call bullsh1t.

I've never understood why this is generally accepted. Why are companies allowed to scare consumers into paying inflated prices by refusing to honour warranties etc. Compare, for instance, digital camera prices to those in the UK. Dixons in the UK charges 492 pounds (about R5400) for the Canon EOS 350D kit. Kalahari.net's price, R8500!

Just because it's authorised distribution. This is just another way the SA consumer gets shafted.
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Your point is valid. However, just because the manufacturers promote dodgy practices, does not mean the consumer can get ripped off by buying a grey product that will not be honoured by the guarantee.
 
BruceS said:
I've never understood why this is generally accepted. Why are companies allowed to scare consumers into paying inflated prices by refusing to honour warranties etc. Compare, for instance, digital camera prices to those in the UK. Dixons in the UK charges 492 pounds (about R5400) for the Canon EOS 350D kit. Kalahari.net's price, R8500!
Click to expand...
Why should the local distributer have to cover the cost of a warranty for a product that he has had no income from?

In the case of your example...
1. You are using the current (very strong) exchange rate on a spot rate basis. Importers do not have this luxury, they need to buy forex at forward rates, generally this will mean a 3% loading. While today's spot rate is R10.73 =1GBP, it is likely that the importer is paying considerably more due to forward cover... e.g in February the rate was R10.8=GBP1, plus some loading, the actual covered rate that the importer is pro'lly paying is in the region of R11.25. This doesn't sound like much, but in the cae of your camera means that the relative price increases from R5400 to R5535 on a net basis. As long as pricing was an apple to apple comparison, but it isn't.
2. Shipment costs from the Netherlands (where Canon has their Warehouse) to the UK is much cheaper than the airfreight cost to South Africa.
3. You have ignored the local excise and tax impact
4. You have ignored the cost of logistics in South Africa
5. You have ignored the economies of scale in the UK as opposed to South Africa
6. You have compared an expensive channel (kalahari) to a cheap store (Dixon's).

.
 
The trick is to find out which manufacturers have global warrantees and stick to those. That way no matter where it was bought, the local agent has to honour the warrantee.
 
He said: "Protecting licensed importers by a total ban on unlicensed imports could ultimately be more harmful to the economy than the importation of products which do not match local conditions.
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This is my main concern with this actually. I don't want Ster Kinekor to control PS2 game prices [as they do now] and decide what reach this country and what not. The last thing i want is some Telkom-like monopoly sitting at the gateway between SA and the World controlling the entire supply chain , adding their 30-40% [or whatever the heck they want] markup before it goes to retail [who then add their own markup] .

In the end, if i want to buy a grey import, then it should be my choice. I don't need warrantees on everything. I also don't care how the grey-importer sorts out my warrantees, as long as they do. If i buy something from Hi-Fi and it has a 1 year guarentee, then i expect them to sort it out if the need arise, whether they need to import another grey product or go through a local distributor , not my concern.

This seems to be more about local distributor-protection than consumer-protection.
 
AFAIK LG has global support for all their products
 
diabolus said:
In the end, if i want to buy a grey import, then it should be my choice. I don't need warrantees on everything. I also don't care how the grey-importer sorts out my warrantees, as long as they do. If i buy something from Hi-Fi and it has a 1 year guarentee, then i expect them to sort it out if the need arise, whether they need to import another grey product or go through a local distributor , not my concern.
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And so you will be able to. The difference is you will not be misled into thinking you are buying something else.
 
Besides, that why we have insurance against Lightning and theft, Item stops working, call insurance company.
 
"Why should the local distributer have to cover the cost of a warranty for a product that he has had no income from?"

Would Canon not bear the cost of the warranty?

"1) ...As long as pricing was an apple to apple comparison, but it isn't."

Why not? It's the same camera. Or did you mean otherwise?

"2. Shipment costs from the Netherlands (where Canon has their Warehouse) to the UK is much cheaper than the airfreight cost to South Africa."

Fair comment

"3. You have ignored the local excise and tax impact"

Also fair. I was, however, under the impression that taxes etc. on electronic goods had fallen a lot over the past few years. I remember looking at some of the gvment websites for this information but couldn't find it.

"4. You have ignored the cost of logistics in South Africa"

Out of my depth here. Would have to trust you on this one.

"5. You have ignored the economies of scale in the UK as opposed to South Africa"

Also fair.

"6. You have compared an expensive channel (kalahari) to a cheap store (Dixon's)"

I don't recall experiencing Dixons as cheap. I also don't remember seeing this same camera advertised at much less than the R8500 I quoted at any other place that was obviously an authorised distributor. Do you?

I have to admit your reasons are good. They don't make me feel ane less shafted though. :-(
 
If Hi-Fi Corp can buy directly from Sony in Japan (which they do) - bring the product into the country (paying all relevant taxes) (guarantee the product for its normal warranty and provide extended warranties) and still charge R2000 less - then what does this tell you of our local market? Rip-off artists supreme - like telkom and the rest.

Strangling the import stream will do the country no good.

/and one more nail in the coffin for sa consumers/
 
I take the alternative view and say the government should force companies to honour guarantees worldwide regardless of where you bought a product. Prices are kept artificially high by this grey/not grey distinction. It cant be right to slap a R5000 markup on an Apple computer just because it came from Europe. It would be cheaper to fetch one myself!
 
kilo39 said:
If Hi-Fi Corp can buy directly from Sony in Japan (which they do) - bring the product into the country (paying all relevant taxes) (guarantee the product for its normal warranty and provide extended warranties) and still charge R2000 less - then what does this tell you of our local market? Rip-off artists supreme - like telkom and the rest.

Strangling the import stream will do the country no good.

/and one more nail in the coffin for sa consumers/
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1. No they don't. They buy job lots off traders in other countries.
2. They have been found guilty in the past of custom evasion and paid over R160 Million in fines.
3. Please find me a Sony Product where HiFi Corp is R2000 cheaper.
4. Also, who is doing the support for the "normal" warranty? Frikkie in the back with a soldering iron?


You have no clue.
 
diabolus said:
This is my main concern with this actually. I don't want Ster Kinekor to control PS2 game prices [as they do now] and decide what reach this country and what not. The last thing i want is some Telkom-like monopoly sitting at the gateway between SA and the World controlling the entire supply chain , adding their 30-40% [or whatever the heck they want] markup before it goes to retail [who then add their own markup] .

In the end, if i want to buy a grey import, then it should be my choice. I don't need warrantees on everything. I also don't care how the grey-importer sorts out my warrantees, as long as they do. If i buy something from Hi-Fi and it has a 1 year guarentee, then i expect them to sort it out if the need arise, whether they need to import another grey product or go through a local distributor , not my concern.

This seems to be more about local distributor-protection than consumer-protection.
Click to expand...
Did you read the article?
 
We once bought Maxtor hard drives from Sahara, and after a while one HDD stopped functioning, so when we phoned Maxtor (because it was out of warranty @ Sahara) they said no they cannot replace it, as it was not purchased from a ligit distributor.

Now that sucked because we had to purchase a brand new HDD.

They should definitely inform their clients that it is grey market wares.
 
I am more inclined to support parallel import - as long as the supplier inform & honour warranty service.

The reason is PRICE competition , If only one company can supply a certain brand of product , it has the power to manipulate price .

over-charging is the biggest voilation of consumer right ,the only way to prevent that is to ensure the presence of price competition in the market.(legislations can not achieve lower price, only competition can do the trick)
 
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WatchDog said:
I take the alternative view and say the government should force companies to honour guarantees worldwide regardless of where you bought a product. Prices are kept artificially high by this grey/not grey distinction. It cant be right to slap a R5000 markup on an Apple computer just because it came from Europe. It would be cheaper to fetch one myself!
Click to expand...

Bro, buy whatever you want to it's a free world.

But don't bring it to us registered SA dealers to fix when it breaks and you bought it elsewhere...send it to whoever you bought it from, that store in Dubai....and pay the courier fees yourself.

Get a grip, I don't think you have any understanding of the SA IT&T market.

Fact is we would all love to see lower prices right across the spectrum, with margins what they are....you may just have to send your IT equipment to Dubai to get fixed soon anyway....:rolleyes:

Recently had a client send me a retail quote for a DSLR, he purchased the unit for R2000 less than the SA distributor distributes it to dealers in the Cape.

So you're not the only person peeved off at high prices my friend....there was hell to play after that incident.

arf9999 some solid, valid input there...
 
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