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By | Richard Chirgwin 14th September 2011 22:28

Kogan sparks new controversy

Parallel imports into Oz to undercut local channels

In a move that’s certain to spark hot debate, serial controversialist and electronics retailer Kogan has announced that customers can buy kit from Apple, Nikon, Canon and Samsung from its site.

As the company coyly describes its new offerings, it is sourcing the brand-name kit “higher up in the supply chain, and selling direct to consumers” – which El Reg interprets as a parallel importation operation. Kogan has, apparently, found an outlet willing to supply the equipment in bulk, allowing it to bypass local “official” channels.

Its risk will be in warranty: if its arrangements are such that the suppliers are let out of their local - for example, Australian - warranty obligations through the parallel importation, then the job of replacing failed kit will fall back to Kogan.

The company claims its price of $AU489 for a Nikon D3100 kit undercuts both Harvey Norman ($AU949) and JB Hi-Fi ($AU777), while on an iPad 64G with WiFi, the price cuts are more modest. The Kogan $AU659 price is only around 20 per cent below the competitors Kogan targets.

This assumes, of course, that the quoted prices are all accurate and current, that the “names” haven’t already responded with counter-offers by the time you read this, and it ignores differences in delivery charges.

While Kogan is sure to attract at least some kind of legal attention from both the vendors and other retailers, parallel importation is explicitly legal in Australia, as long as the seller obeys Australian law (like paying the Goods and Services Tax, honouring warranty claims and so on). It’s neither "grey marketing" (a phrase certain to be deployed by vendors' PRs before the end of the week) or a legal grey area – Australia's Trade Practices Act makes it clear that “exclusive dealing” is verboten, and (with the exception of restrictions that remain for books) the ACCC counts protecting the rights of parallel importers as one of its many activities.

The deal appears to be limited to Australia for the time being, or at least Australia-focused. However, if the deal works, can the UK be far behind? ®

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