Grey Market

As the scope of international trade increases, brand owners are increasingly involved in ever more complicated sales and distribution networks and are engaging with partners in unfamiliar and sometimes remote jurisdictions. With this comes an increased exposure to the risks of product diversion and reduced income from sales outside the authorized distribution chain.

Bishop IP assists clients in identifying sales of grey market goods and obtaining evidence that goods are being distributed from sources outside the authorized network. The work frequently involves test purchases in countries both within and outside the European Union and then engaging with those actively conducting grey market activities.

Grey markets operate in a wide variety of sectors; everything from pharmaceuticals to computer games. Businesses may not realize they have a grey market problem until their authorised distributors find that they are being undersold by grey market brokers.

Case studies

A major manufacturer of computer hardware appeared to be suffering considerable losses from the sale of grey market goods in Europe. We initially assessed the scale of the grey market activity. Then we investigated the companies involved and undertook test purchases and forensic examinations of the goods acquired. Our inquiries enabled our client to take the appropriate action and create new guidelines and processes for its distribution channels.

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The managing director of a company in the spirits industry had dined in a UK restaurant and noticed that the menu offered customers a drink which was not meant to be distributed in the UK. Bishop IP Investigations was instructed to determine the restaurant’s source for the drink and the extent of grey market trade in the product. It transpired that an employee of the restaurant had brought back a single bottle from a holiday abroad and that once that bottle was exhausted the drink would be removed from the menu.