Sale of grey imports now regulated
2007-02-15
THE Minister of Trade and Industry, Mandisi Mpahlwa, has signed a final regulation stipulating the disclosures sellers of parallel/grey goods are compelled to now make to consumers.
The regulations are the result of recommendations made by the Consumer Affairs Committee after it had conducted an investigation, following complaints that sellers failed to disclose upfront to consumers that the goods they were purchasing were parallel or grey goods.
Parallel/grey goods are intended for sale in one national market, but exported from their original destination for sale in another market; for example, South Africa. It should not be confused with counterfeit goods.
Parallel or grey goods are sold legitimately both locally and worldwide. They may, however, be distinguished by lack of an agreement between the seller and manufacturer/trademark holder to sell the goods.
If the seller sells the goods despite not having such an agreement, the goods are known as parallel or grey goods. If the sellers of these selfsame goods entered into an agreement with the manufacturer/trademark, they are deemed authorised distributors.
Parallel goods are sold legitimately in South Africa and are suitable for use in this country. If it were unsuitable, the SABS would not permit their sale.
A primary consideration for consumers when purchasing goods from an authorised or non-authorised seller/ distributor is warranties. Authorised sellers will usually offer consumers a manufacturer’s warranty, while unauthorised sellers would not.
However, sellers of parallel goods may offer their own warranties, which may be equivalent to the manufacturers’ warranty.
The Committee’s investigation involved issues like the disclosure of the status of such goods as well as the nature and extent of any warranty provided by the seller/manufacturer of the goods, and after-sales services for these goods provided by the seller.
Parallel/grey goods are not limited to electronic goods, but include any product sold without the specific authorisation of the manufacturer or trademark holder like motor vehicles, audiovisual equipment, agricultural machinery and equipment, photocopiers and computers.
The Committee found it is a consumer’s basic right to be informed that the manufacturer's warranty does not apply when an unauthorised distributor sells parallel/grey goods.
If such information is withheld from consumers, they are misled, which means that the relevant business practice is unfair to consumers.
As a result, the Minister of Trade and Industry requires sellers of parallel/ grey goods to alert consumers that they are not authorised distributors of these products, and that authorised distributors are not obliged to honour manufactures’ warranties/guarantees or to provide after-sales support.
Sellers should inform consumers of these goods of their parallel or grey status by the following words in all advertising and in-store promotions, websites, brochures and whilst being displayed for sale, in conspicuous size, without change “The authorised South African distributor of this product is under no obligation to honour the manufacturer’s guarantees/warranties or to provide after sales service:.
Any contravention of the Minister’s order is a criminal offence, punishable by a fine not exceeding R200 000, or imprisonment for a period not exceeding five years, or both a fine and imprisonment.
Should you require any additional information or clarification you can contact the Chief Director, CCRD: Office of Consumer Protection, Private Bag X84, Pretoria 0001 on tel 012-394-1507 or ebimo@thedti.gov.za.
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