If some manufacturers, such as Estee Lauder, Chanel and L'Oreal, take extra measures to battle the grey market phenomenon, many others have adopted a passive attitude.
Back in 1998, when the Supreme Court ruled in favor of Quality King against Lanza, a manufacturer of professional hair care products, it seemed to have struck a fatal blow to those seeking to use the copyright laws to prevent the importation of so-called grey market goods.
Maintaining a strong legal department is often critical in the fight against grey market activities.
While the professional hair care industry tackles the problem of diversion head on, other segments, especially the prestige fine fragrance market, have yet to establish a united front against grey market activities.
The grey market appears to have been turning whiter than white, with consumer affairs minister Nigel Griffiths and the Consumer Council voicing their support for bringing down prices by curbing brands' selective distribution,
The ruling appears to give manufacturers the right to stop retailers buying goods on the grey market outside the EU and selling them cheaply inside the EU.
Genuine clothes can be used to make fakes, so the grey market is often mixed with legitimate and counterfeit goods.
Supermarkets have established their own niches in grey market goods.
And grey market activity can be a 'cloak and dagger' affair involving the secret movement of goods across borders and the surreptitious breach of their distribution and partner agreements with the brand owner, including the abuse of incentive and discount programs, according to the KPMG study.
In addition to the financial losses, which are expected to continue to grow year over year, the study shows that electronics products sold on the grey market may pose a risk to consumers as well.
Products that travel through the grey market may be sold to unwitting consumers who find out, only after they have made the purchase, that the product is obsolete or without warranty or support.
A refusal to help a customer caught in the grey market crossfire can hurt a manufacturer's reputation, create negative publicity and damage relations with investors as well as markets becoming aware the manufacturer has a grey market problem.