If your business sells parallel imports in Australia you must be aware of and understand your obligations to consumers.
Parallel importing, also known as grey or direct importing, occurs if your business sells products directly to consumers or businesses in Australia outside of the formal manufacturer distribution channels. That is, when your business decides to buy genuine products to import and sell in Australia without authorisation from the manufacturer.
The following indicators may suggest that the product your business intends to sell is a parallel import:
- it has been purchased from a supplier other than the manufacturer or its authorised distributor
- the particular model/range is not made for the Australian market
- the product is not otherwise available in the Australian market
- the price you intend to sell it for is cheaper than a consumer would ordinarily expect to pay for the product in Australia
- the product is refurbished rather than brand new.
Example: Cheep Wines sources its wines from a well-known supplier who is based in France. The French supplier is only authorised to sell these wines in the French market. Cheep Wines sells the wine online to Australian consumers. Cheep Wines has not been authorised by the original manufacturer as the supplier of the wines in Australia, therefore any wine sold by Cheep Wines would be parallel imports.
You need to:
- be aware of, and comply with, product safety and labelling requirements
- provide accurate information to consumers about the products you sell
- ensure that you do not mislead consumers about their refund, return and warranty rights, and
- understand your general obligations under the Australian Consumer Law (ACL) when selling these products.
You may also want to establish a formal record keeping system (compliance system) to ensure you are meeting your obligations and can appropriately address any consumer concerns or complaints.
The ACCC recognises the potential benefit to consumers of access to parallel imports which may be cheaper or otherwise not available in Australia. However, consumers may sometimes be disadvantaged when purchasing parallel imports as opposed to purchasing the same products from an Australian authorised supplier. This is particularly the case if they experience problems with these products.
When you sell parallel imported products to Australian consumers, you will be responsible if something goes wrong with these products. For example, if a product develops a fault, you will be responsible for addressing the problem including providing a repair, replacement or refund within a reasonable time under the consumer guarantee provisions of the ACL.
You will be responsible for providing an appropriate remedy, not only as a supplier of the product but also potentially as the deemed manufacturer/distributor, placing additional responsibilities on you. There is no obligation on the local manufacturer or authorised distributor as they will not be considered connected to the supply of the products in Australia.
Example: Krazy Electronics sells parallel imported Apel tablets online to Australian consumers. Krazy Electronics has not been authorised by the original manufacturer as the supplier of these tablets in Australia. Susie buys an Apel tablet from Krazy Electronics and after three months the tablet won’t switch on. Krazy Electronics would be responsible for providing Susie with a remedy under the ACL consumer guarantee provisions. There is no obligation on Apel Australia (the local manufacturer) to provide Susie with a remedy, product support or spare parts.
It’s also important to remember that as the person who sells the products in Australia you not only have obligations to consumers but also to other businesses who have on-sold products, purchased directly from you, to consumers.
- Make it clear upfront that the product you are selling is a parallel import.
- Highlight that the manufacturer’s warranty may not apply in Australia, or depending on the terms and conditions may not apply to products sold as parallel imports – if this is the case ensure customers understand they may still be protected under the ACL consumer guarantees if something goes wrong.
- Consider honouring the manufacturer’s warranty – happy customers are good for business.
- Point out that the local manufacturer of the product is not obliged to provide any product/technical support or repair/spare part facilities in Australia for that particular product (unless there is a specific agreement in place). This will be your responsibility.
- Where relevant, highlight that the product may be different to the typical Australian model/range, such as not be adapted for the local environment in Australia (an example of this could be software that is not configured for the Australian market).