Grey market ruled against

In article
,
Rich wrote:

http://forums.dpreview.com/forums/re...ssage=37180618

Poor B&H. Half their sales are threatened.

I didn't realize that B&H sold watches.

The Swiss watch industry has been vigorous in their desire to control
the entire vertical market for decades. In other countries it is easier
to prohibit unauthorized dealers from selling their watches, or anyone
selling at prices below the prices fixed by the manufacturer.

In the US this kind of monopolism is illegal, so they have relied on
copyright laws -- they copyright the design of their dials, cases,
bracelets, etc. and prosecute unauthorized dealers for infringement.

Leica is the only camera company I know which has successfully done the
same thing in the camera world. Leica prices are set in Solms, Germany.
If you are an authorized Leica dealer and you sell for less than list
price, you lose your authorized dealership.

Of course Leica is a tiny manufacturer compared to the Japanese
companies. If Nikon or Canon were to try to resort to these tactics they
would lose money on every camera they sell. Imagine how much it would
cost Canon to track down unauthorized dealers, or dealers who discount
their prices. You can buy a Canon or Nikon from the corner grocery store
and the manufacturers will be happy to have the sale.

On 2010-12-15 09:33:50 -0800, shiva das said:

In article
,
Rich wrote:

http://forums.dpreview.com/forums/re...ssage=37180618

Poor B&H. Half their sales are threatened.

I didn't realize that B&H sold watches.

The Swiss watch industry has been vigorous in their desire to control
the entire vertical market for decades. In other countries it is easier
to prohibit unauthorized dealers from selling their watches, or anyone
selling at prices below the prices fixed by the manufacturer.

In the US this kind of monopolism is illegal, so they have relied on
copyright laws -- they copyright the design of their dials, cases,
bracelets, etc. and prosecute unauthorized dealers for infringement.

....and therein lies the problem with this ruling. Where is the
copyright established?

The Swiss watch manufacturers have a well documented catalog of
copyrighted designs. So a TAG Heuer, bought at Schipol airport, a Rolex
bought in a Geneva boutique, or an Omega bought in California, even one
bought in Cairo. If being one of the current, or back catalog of
copyright designs would be sold, serviced, and warrantied at authorized
dealerships and service centers Worldwide. The Swiss origins and
designs are established.

The issue is non-franchised vendors reselling genuine watches not
obtained through the US importer/distributor, grey market if you will.
The franchise holders have an expectation of local exclusivity, and
support from the manufacturer to protect that exclusivity, otherwise,
why buy into the franchise in the first place?

So it seems Costco was importing Genuine Omega watches from Paraguay
and Egypt for resale in the USA, undermining the established Swiss-US
Swiss watch distribution system and purchased franchises. They were
apparently legitimately purchasing these watches wholesale from the
Paraguayan and Egyptian, importers and distributers. Costco to
legitimately sell these watches in the US would need to enter into a
dealership arrangement with Omega.

Once you move into the area of that other high ticket item, exotic
cars, you will find a similar problem. Those dealerships of Ferraris,
Bentleys, Morgans, etc. expect a degree of regional exclusivity, and
are going to enlist the aid of the manufacturer to protect that
exclusivity. These watches are no different.

How this ultimately translates to photographic equipment remains to be
seen. I doubt that Costco is going to be able to sell grey market
Nikon, Canon, Sony, etc. in the US and have the US distributers honor
warranties on those sales. I am sure there was no such problem with the
watches.



Leica is the only camera company I know which has successfully done the
same thing in the camera world. Leica prices are set in Solms, Germany.
If you are an authorized Leica dealer and you sell for less than list
price, you lose your authorized dealership.

Of course Leica is a tiny manufacturer compared to the Japanese
companies. If Nikon or Canon were to try to resort to these tactics they
would lose money on every camera they sell. Imagine how much it would
cost Canon to track down unauthorized dealers, or dealers who discount
their prices. You can buy a Canon or Nikon from the corner grocery store
and the manufacturers will be happy to have the sale.

Provided that Canon, or Nikon was placed in that corner grocery store
by the local authorized Canon, or Nikon importer/distributer. There is
still nothing stopping high volume outlets such as Bestbuy, Costco, or
even B&H from negotiating lower wholesale prices on large quantities,
and/or soon to be discontinued items, provided they play within the
Byzantine rules of commerce.


--
Regards,

Savageduck