parallel importing


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parallel importing

the practice whereby independent importers buy a particular manufacturer's product from a low-priced market source and sell it in direct competition with the manufacturer's appointed distributors in the local market, usually at a lower price. Parallel importing has been prominent in the European Union where differences between member countries' price levels, along with manufacturers' practices of granting lucrative EXCLUSIVE DEALING rights to selected local distributors, have created profitable segments for independents to exploit.

Parallel importing is seen as beneficial by advocates of FREE TRADE and COMPETITION POLICY as it breaks down barriers to INTERNATIONAL TRADE and PRICE DISCRIMINATION between markets, leading to a greater harmonization of international price levels. See IMPORTING.

parallel importing

a form of ARBITRAGE whereby an independent importer buys a particular supplier's product at a low price in one country and resells it in direct competition with the supplier's appointed distributors in another national market where prices are higher.

Parallel importing helps promote FREE TRADE and competition by breaking down barriers to INTERNATIONAL TRADE and undermines PRICE DISCRIMINATION between markets by suppliers. See IMPORT.

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