Impact of Grey Marketing on Indian Economy Essay

An unofficial grocery in which practiseds atomic number 18 bought and sold at gravels decline than the official wrong set by a regulative agencyGrey mercenaryizeing ( a similar comely or sotimes k forthwithn as elderly commercialise) involves the lot of legal ripes maintain unauthorized, unofficial, and unint kiboshed channels of scattering. Hence, brandmark increases argon a good deal disdained from one pastoral to an naked as a jaybird(prenominal) and sold by unauthorized individuals or wets. This practice is also often known as par entirelyel moing, crop diverting, and even arbitrage, and typically flourishes when a product is in short supply, when manufacturers resort to skimming strategies in specific commercializes. A good example is the work of crude oil by an individual.The brookescent grocery store includes advantages that ar typically unregistered to evade taxes. Perfectly countenance occupations, such as domestic support, babysitter s, part time beauticians and freelancers, may non be registered. Not alone is it gruelling to detect such defaulters, the penalisation is usually mild. For example, even as Apple, Inc., rolled out its latest third-generation iPhone on July 11, 2008, several sell stores without the world, including those in China and Thailand, continued to fall orders even though this product was not creation sold in those securities diligences. Their computer codes were unlocked, so that the echos could be engrossd with different fluent returns give uprs. dismantle in India, one of the fastest- increment changes for cell phones, Apple delayed the way out of the original iPhone until mid-2008, a year after the release in the coupled States and six months after its release in Europe, because of the fear of grizzly foodstuff trades. A wide range of goods and go set out been sold through w constructe-haired commercializes, including auto tribulationnys, broadcasting delivery, college textbooks, pharmaceuticals, photographic equipment, characterization games, and even wine-colored-coloreds. Research has exhibit that every one of the worlds eight major export regions has experienced grayness food food foodstuffing activity damaging to their military operations. Parallel commercialize is further encouraged by periods of war or all opposite crisis. During harsh political conditions or natural disasters, scarce goods be circumscribe by the government. People pitch the tendency to break-dance restrictions or ration laws to secure the products they desire.In the United States, colour inness commercialise goods are forbid according to Section 526 of the Tariff Act of 1930, which expressly forbids moment of goods of conflicting manufacture without permission of the trademark owner. However, the implementation of regulation by the U.S. tradition Service and the courts interpretation of the law stool not been in broth with each other. In a recent study, rough 13 part of the firms in North America feature taleed some knead of rusty merchandiseing. A positive outcome of grey trades is that they provide brand-name goods at lower economic consumptions to the customer. They can create incremental sales in marts not in direct competition with sanctioned dealers, and sometimes help companies scourge distri providedion bottlenecks because of local government regulations. Occasionally, it is less(prenominal) expensive to tolerate grey grocery placeing than to shut down the operations completely because of the time and resources call for to monitor the violations.Finally, eradicating grey merchandise placeing activities can provide a firm with sound food marketplaceing intelligence regarding customers in these markets and their debaseing behavior. On the other hand, the phenomenon obviously also has several drawbacks for companies. It simultaneously beneathmines the manufacturers distribution arrangement s and their ability to control quality it creates the dilution of exclusivity and damages existing channel relationships. ordained dealers may not choose to rear significant services in order to compete with the grey market monetary value for the product. There is apparent to be an erosion of the brands global image, and the firm is marvelous to necessitate the ability to use traditional pricing strategies, thus having less control over their overall marketing strategies.2.According To World Health physical composition2.1.Parallel ImportsParallel imports are imports of a patented or trademarked product from a boorish where it is already marketed. For example, in Mozambique 100 units of Bayers ciprofloxacin (500mg) costs US$740, but in India Bayer stags the identical drug for US$15 (owing to local generic competition). Mozambique can import the product from India without Bayers consent. According to the theory of enervation of adroit property rights, the exclusive right of t he patent holder to import the saved product is exhausted, and thus ends, when the product is first launched on the market. When a bow or group of states applies this principle of exhaustion of intellectual property rights in a given territory, tally importation is authorized to all residents in the state in question. In a state that does not cognise this principle, however, only the patent holder who has been registered has the right to import the protected product.sometimes referred to as grey market imports, parallel imports often contains place when in that location is differential pricing of the very(prenominal) product either brand-name or generic drugs in different markets (usually owing to local manufacturing costs or market conditions). The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement explicitly states that this practice cannot be challenged under the World Trade Organization (WTO) dispute settlement system and so is effectively a matter o f national discretion. Parallel imports can centralize the price of health products and pharmaceuticals by introducing competition. However, they can also affect the dialogue of tiered pricing regimes with pharmaceutical companies. If a private pharmaceutical union agrees to sell a product at a lower price in poor countries, it allow for need some assurance that the cheaper product pass on not be imported back into its rich country markets, undercutting its profits (product diversion).3.Grey trade by Industry3.1. initial public offering Grey Marketing in IndiaCities like Ahmedabad, Kolkata and Rajkot are the most active centers for the IPO (initial earthly concern provideings) grey market. Trades done in the grey market are colonized on the day of listing. Once the deal is done at a stipulated price, the seller must deliver the allocates after he has been allotted the shares by the community. If the seller falls short in receiving the exact number of shares that he has so ld in anticipation, whence he must buy the shares on the market (once the share is listed) to honor his commitment.Most of the recently-concluded initial man offerings are quoting at a significant allowance in the grey market, compared to their do prices this means that the issues are perceived to have been underpriced. Many traders short sell in the grey market if they feel that the premium on offer is unwarranted and that the armory may list at a price lower than what most market players expect it to. though grey-market operators say that in that respect is a constant change in the grey-market premium, it boastfullyly depends on the subscription on the last day and the market conditions, post issue closing.3.1.1. In the carry market, what is the concept of grey marketing?Grey marketing is a trade of something legal but through unofficial and unauthorized distribution channels. In contrast, black marketing is a trade of illegal goods or services through illegal channels. Th e grey market of goods is to import and sell products through market channels which are not authorized by the manufacturers. It occurs when the prices of a product differ significantly in different countries. The grey market of securities markets and IPO (Initial Public Offer) is to buy and sell the shares to be allotted in the future. Once the trading is done in the grey market at a stipulated price, the seller must deliver the sold number of shares to the buyer on the day of listing to honor the commitment.3.1.2.Effect of Grey Market commerce on Indian Economy3.1.2.1Grey Market Rs. 1L in confidence federal agency IPO willing earn 9% in 20 dayspicAHMEDABAD Reliance business office (REPL) seems to have electrified grey market operations in Ahmedabad with operators willing to shell out as much as Rs. 9,000 for every application of Rs. 1 lakh. In the bustling grey market in Gujarat, such high rates are unheard of. The last bench mark for hectic activity was the Mundra Port and SEZ IPO in November when the grey market started buying applications for Rs. 7,500 in the last stages of the issue. With the REPL offer ready to hit the market on January 15, the grey market is trading the shares and the applications.It basically means that if you have Rs. 1 lakh to invest when the IPO opens, you have a secured 9% return within 20 days of closing of the issue when the stock would be listed. After SEBI cleared REPLs IPO, grey markets had resumed trading in the stock with premium saudas (trades) at Rs. 340-350 and application buying rate at Rs. 7,500. While the premium has zoomed to Rs. 390-400, the applications rate touched Rs. 9,000 and could break the Rs. 10,000 mark by the time the IPO hits the market, sources verbalise. The excitement on the counter in the grey market has come on the heels of crudes that REPL will offer 5% discount to retail investors, who will also nab an option to even out only 25% of IPO amount at the time of application.3.1.2.2.Reliance source IPO Grey market sees Rs. 2000 crore losspicAHMEDABAD The dismal debut of Reliance Power on the bourses may resolvent in losses to the argumentation of Rs. 2,000 crore in the grey market. Operators also fear a payment crisis as many investors are threatening to hold back payments. Grey market players both operators and investors who were expecting the stock to list in the range of Rs. 550-Rs 600 per share, were in rap as Reliance Power opened at Rs. 430 and closed at Rs. 372.50 on its first day on the exchanges. This could also adversely relate the premium transactions in forthcoming IPOs (initial public offers).Ever since the grey market began trading in this IPO, the premium on Reliance Power shares had peaked at Rs. 450 over and above IPO price of Rs. 450 per share. legal age of trading in R-Power IPO in the grey market was done at an average premium of Rs. 300 per share. As the issue closed at Rs. 372.50, most market operators, who had taken huge exposures, have w oolly Rs. 377 per share. It is estimated the grey market has already taken an exposure of five crore lawfulness shares, leading to losses cost Rs. 1,900 crore. It is also learnt that many investors in Jaipur have refused to honor their payment commitment to grey market operators in Ahmedabad, as the IPO plunged after listing. This could well result in operators losing out on macro sums of money and have a cascading effect in the market.3.1.2.3.Grey market bets big time on DLF IPOpicAHMEDABAD Only time can tell whether you could get the elusive pit of gold at the end of the DLF IPO rainbow. But, street savvy investors in Gujarat have already started earning a secured 4% return on their investing in the initial public offer of the countrys biggest realty developers, much out front the offer hits the market on June 11. Large numbers of investors, who want to earn secured worry earning up to 4%, are selling their IPO applications to grey market operators in Ahmedabad. Although the DLF IPO is opening from May 11, IPO applications are world sold anywhere amid Rs. 3,800 and Rs 4,000 for a single application worth Rs. 1 lakh. Activities in the Ahmedabads grey market, popularly known as Sakar Bazar, has gradually been heightening as the market enters the final week to begin with a deluge of public offering hit the primary markets. light-emitting diode by DLF IPO, the next two months could see close to Rs. 50,000 crore being brocaded from the market.On one hand, the grey market is witnessing huge trading in IPOs, which are yet to be listed on the bourse. On another hand, slew are selling their IPO applications to the grey market operators for a secured interest. Even as DLF shares are yet to be listed on the bourse, operators in Ahmedabads grey market are trading DLF shares at a premium of Rs 37 to Rs 38 on its issue price of Rs 500-Rs 550. Similarly, Meghmani Organic is taking a premium of Rs 5 over its issue price. And, its not only in the case of these two IPOs. All IPOs are traded in the Ahmedabad grey market, which seems to have a handle on the pricing of IPO listings. It has been found by most market participant of the capital market that majority of the IPOs listing prices are normally close to the last trading price of the IPO in the Ahmedabads grey market.4.WINEThe grey market in wine flourishes, especially in the case of champagne. Many large champagne producers do their own trade, and desire to maintain independent price points in different markets. Thus a bottle of Champagne skill cost US$35 in the United States while the same bottle might be only 15 Euros in France. It is often profitable to buy the wine in Europe from an authorized distributor, and sell it in the US. In the case of enormous pricing disparity, it is not crotchety to find a grey-marketed wine selling for less at retail than the wholesale price of the authorized distributor. In the case of a large availability disparity between the US and Europe, the grey market price may be the same or higher than the authorized price. typically the importer of a wine is the one most concerned or so grey market sources. The winemaker may or may not cathexis what happens to the wine after it is sold, although he or she might complain to abide an importer.4.1.India imports 72,000 cases of wine a yearPUNE The Indian wine market is growing at 30-40% annually and this rate will continue for the next 5-6 long time in keeping with global trends. However, the current per person per year pulmonary tuberculosis of wine in the country is as low as 9-10 ml. The Maharashtra industrial Development Corporation has mentioned this in its note on the grape wine industry of Maharashtra, based on a report prepared by Rabo International Bank. The highest wine consuming countries such as France and Italy has per person wine consumption as high as 60 to 70 liters annually. Those in China consume four liters, the report stated. Domestically, 80 % of wine consumption is confined to major cities like Mumbai (39 %), Delhi (23 %), Bangalore (9 %) and Goa (9 %) whereas rest of India has only 20 % consumption.The MIDC report further stated that India currently imports 72,000 wine cases (nine liters to a case) a year. active 32,000 of this are bottled at origin and the other 40,000 cases are imported in bulk flexi bags, which are subsequently bottled by Indian wineries. Besides this, about 12,000-15,000 wine cases are sold through the grey market. In 2009-2010, some seven lakh liters of wine worth Rs. 5.92 crore was exported to France, Italy, Germany, US, UK, Singapore and Belgium from Maharashtra. The state had proclaimed its Maharashtra Grape Processing Industrial Policy 2001 on September 19, 2001 with wine as an important part of it. According to a report by MIDC, four components are required to make good wine. Those are soil, climate, vines and adult male factor that is the people who brew wine.A lot depends on determination the ideal balanc e between the characteristic of soil, the microclimate and the grape varieties. At establish wine grapes are grown on a 7,000 acre area in the state. In 2010 in that location were a arrive of 74 wines making units (36 in Nashik, 13 in Sangli, 12 in Pune, 5 in Solapur, 4 in Osmanabad, 3 in Buldana and 1 in Latur district) that had started production in the state. At present, total production of wine in the country is 1.45 crore litres from 90 wineries in the country. Of that, 1.32 crore litres wine is produced by 75 wineries in Maharashtra. The total investment in wineries was Rs 431.71 crore in 2009 which rose to Rs 452.10 crore in 2012. France, Italy, Spain, Germany are the main grape wine producing countries in the world. Nearly 32,000 jillion litres wine is produced per annum.5.AUTOMOBILESAutomobile manufacturers share world markets by territory and price, thus creating a demand for grey import vehicles. In the United Kingdom the term applies to vehicles imported either new from cheaper European countries or from Japanese domestic determines imported victimized from Japan or Singapore, which both have strict laws against older cars. This importation of secondhand models from Japan/Singapore tends to involve sports models that were never released in the UK or models that fetch a high price in the UK due to their mental process or status.Although some grey imports are a bargain, some buyers have discovered that their vehicles do not meet British regulations or that part and service are hard to come by because these cars are different from the versions sold new in the UK. In New Zealand, grey market vehicles comprise a majority of cars in the national fleet. These secondhand imports have achieved normal status and are used and serviced without comment throughout society. A huge industry servicing and supplying parts for these vehicles has developed. After years of trying to stop grey imports the car companies themselves have become involved, importing in competition with their own new models.6.MOBILE HANDSET iphone Launch gets hit by Grey Marketing6.1.Low-cost handsets to get force, says industryNearly 75 per cent of the currently available mobile handset models in the market could get defunct or redesigned with the Government deciding to bring in new radiation norms for the telecom sector. The Department of Telecom has accepted a proposal by an inter-ministerial committee to lower the permitted radiation in mobile phones by 50 per cent. The move will impact almost all the handset makers, especially those who operate in the low-end segment.6.2.Handset priceAccording to the Indian Cellular sleeper, the new radiation norm will jack up handset price by 5-30 per cent as handset makers will have to make additional investments to meet the new rules. According to the new guidelines, handsets should not have Specific Absorption Rate (SAR) of more than 1.6 tungsten/kg taken over a good deal containing as large number of 1 gram of human issue. This is the same levels allowed in the US. India till now followed the European standards wherein handset makers are allowed to have SAR levels of 2 watt/kg on a 10 gram human issue. Globally, about 1,500 meg mobile phones are sold per year out of which more than 80 per cent is sold in countries where European guidelines are followed.In India, there about 10 global brands, another 15-20 Indian brands and more than 4,000 importers who trade in unbrand Chinese phones. Most of the handsets under Rs 11,999 which are just about 645 or so would have to be redesigned. Effectively, this would disrupt the entire operation of more than 88 per cent of the legal handsets sold in the market (the legal market is approximately 70-75 per cent of Indias total volume market). All global brands and domestic brands will get seriously impacted by this, Mr. Pankaj Mohindroo, President, Indian Cellular Association.6.3.Chinese handsetsThe industry is worried that the new guidelines will hav e no impact on the Chinese unbranded grey market phones, which is handled by over 4,000 importers with volumes between 3 and 4 million a month. The handset makers fear that the grey market will get a window of opportunity of approximately 6-9 months to rapidly expand their volumes before the branded companies start bringing redesigned phones. If the Government is bringing new laws to talking to concerns of health and security then it should also set up good monitoring.While the branded phones will have to bear the costs to redesign phones, grey market devices will continue to be available without any check, verbalize Mr. S.N. Rai, Co-founder & Director, Lava International one of the Indian handset Company. According to ICA, the industry would be able to redesign approximately 100 models in about 6-9 months and 200 in 24 months. There are about 850 handset models available in the market at present. The legal industry will never be able to redesign all the models and the availabili ty would bid to at best 150- 200 models within 18-24 months of implementation of such norms, Mr. Mohindroo verbalize6.4.Ultra low-cast modelsICA said that in the case of ultra low-priced handsets, it may not be possible to redesign these handsets and all the models in the ultra low-priced handsets less than Rs 1,500 could get knocked out of the market. Apart from lowering the permitted radiation levels, the new guidelines also make it mandatory for handset makers to display the SAR level on the handset. The DoT is expected to notify the new norms shortly. Keywords mobile radiation norms, low-cost handsets to get impacted, Specific Absorption Rate (SAR)6.5.Dark days for mobile grey marketThe import concern on mobile phones has been reduced from about 16 per cent to around 4 per cent.Industry participants also believe that the break from grey market to the legal market is by and large on the account of growing number of mobile retail stores. The mobile stores provide accessibili ty to the consumers. Our mobile stores are at all the visible locations, so consumers can walk in anywhere and get the best deals possible, said Subhiksha marketing vice-president Mohit Khattar. Industry analysts say that a huge grey market exists because of the differential of around 10 per cent to 25 per cent between legal and grey handset prices.With growing competition in the nonionised mobile retail market, players are offering products at lower prices. This, in turn, helps counter the grey market and bolsters footfalls in these stores. Consumers can buy high-end, real branded handsets with guarantee of replacement or repair through the mobile retail stores.Trust is the predominant factor that consumers are turning towards the branded retail stores, said HotSpot CEO Sanjeev Mahajan. Consumers are opting for accessibility and do not mind paying extra for it. The grey markets operate from a few areas in a city. On the other hand, mobile stores are more easily accessible as the y are located in all prominent markets. The growing brand consciousness among the people, analysts say is also propelling the consumers to approach branded mobile retail stores. Mobile phone retail chains like Mobile Store, Mobi Retail, RPG Cellucom, currently account for just 7 percent of the overall mobile handset market, which has a market share of Rs 15,000 crore.Currently, the impact of mobile retail stores on the grey market is minimal. However, considering the rapid ripening rate of organized mobile retail, its contribution is set to increase in the next 3-4 years, said retail consultancy Technopak Advisors chairman Arvind Singhal. Though the grey market in mobile phones has reduced, a large (75%) grey market still exists in mobile phone accessories such as batteries and chargers, which are often available at one-tenth the price of company branded accessories . Last year, the mobile phone makers asked finance ministry to reduce 34% duty on imported accessories, but nothing c oncrete has happened as yet.7.PHOTOGRAPHIC EQUIPTMENTGenerally regarded as legal in most countries, parallel imports make expensive photographic equipment attractive to savvy users. The grey market in photographic equipment is thriving in highly developed and heavily taxed states like Singapore, with dealers importing directly from lower taxed states and selling at a lower price, creating competition against a local authorised distributor.Grey sets, as informally called, are often comparable to authorised imports. Lenses or flash units of parallel imports often only differ by the warrant provided, and since the grey sets were fabricate for another state, photographic equipment manufacturers often offer local warranty, instead of world-wide warranty, which will render grey sets ineligible for warranty claims with the manufacturer. Due to the constitution of local warranty, importers of grey sets usually mask the flaw in warranty with their own warranty schemes. These are often warranties with reduced benefits or endure a shorter period of time. Grey sets do not differ particularly from an authorised import. They look and function identically, apart from the manufacturers warranties having been voided.7.1.Grey market for digital photographic cameras may bite the dust soonKOLKATA Grey markets for digital cameras may soon become a thing of past, feel the visualize majors in India. It is certainly the year of demise for grey market in compact category, and the sun will set soon in DSLR (Digital Single Lens Reflex) segment, said Alok Bharadwaj, senior V-P, Canon India. Though being an unorganized sector, it is spread in many metro cities, like in Kolkata, at Metro Galli, Kidderpore, and in Delhi, at Pallika Bazar. Earlier, Nikons competition was Nikon grey but now the scenario has changed and grey market has shrunk a lot. Its no more a cause for concern, said Sajjan Kumar, GM, imaging, Nikon India. According to Bharadwaj, the grey market in the country is m ostly activated in DSLR segment and its more or less around Rs. 250 crore, but since India is the main focus for all the global camera majors and as a consequence of that, the market is also change magnitude rapidly, which is in conclusion causing the death of grey market.The general trend amongst consumers is to buy expensive lenses and camera bodies from the grey market at a cheaper rate, but now with most of the players providing the product at a place nearby them, with an extended guarantee period and free memory cards, people are ready to buy it from us officially, said Kumar. More awareness among the consumers and day-and-night marketing have also stepped up the chances to diminish the grey market, said Hiroshi Takashina, MD, Nikon India. It may be noted that Nikon India has recently doubled its marketing expenditure to Rs. 120 crore from last years Rs 60 crore. Another rough-cut feeling amongst the leading camera players is, if government reduces tax on the DSLR bodies, lens, accessories, then the process of erasing grey market will be rapid.Currently, the basic duty on lenses and accessories is still at 10%, which makes it a little difficult for us to bring DSLR prices further down, despite a phenomenal growth in the sector, said a top official of Olympus India. Currently only 1% of Olympus Indias sales is affected by grey market. The all-embracing Economic Partnership Agreement (CEPA) will benefit us for certain to cut the excessive costing, feels Bharadwaj. It may be noted that India and Japan have signed the CEPA Act, under which both the countries will enjoy some trade benefits during the bilateral trade. According to Takashina, India is a price conscious market where 75% of the sales are in the category of cameras priced below Rs.10,000, so with more shopping shop concept and 24 hour customer tending backup, it is now more sensible for a customer to buy the string from official dealers than to go and buy it from the grey market.8.BROADCAS TINGIn television and tuner broadcasting, grey markets primarily exist in relation to satellite tuner and satellite television delivery. The most common form is companies reselling the equipment and services of a provider not certifyd to operate in the market.8.1Industry body opposes charge on TV setspicNEW DELHI Consumer electronics industry said on Monday that sale of television sets would be hit and investment flows affected, if government imposes a license fee on TV sets. Also, share of the grey market would go up if such a proposal is accepted, Anoop Kumar president Consumer Electronics and TV Manufacturers Association (Cetma) said.pic Government is planning to impose a license fee of 10-15% on procure price of each TV set, to provide financial help to Prasar Bharati.If the proposed levy is imposed, the level of taxation on TV sets would rise to 45-50% and the share of the grey market will certainly increase, a Cetma official said. When total incidence of taxes on ACs was about 50%, the grey market was more than 80%. With the reduction of taxes, the grey market for ACs has practically disappeared. The increase in the share of grey market for TV sets will ultimately result in loss of revenue to the government, Cetma added. Cetma said any additional level would result in a major slowdown of the television industry, already reeling under heavy taxes.9.VIDEO GAMESGrey markets can sometimes develop for read video game consoles and titles whose demand temporarily outstrips supply and the local shops run out of stock, this happens especially during the holiday season. Other popular items, such as dolls can also be affected. In such situations the grey market price may be considerably higher than the manufacturers suggested retail price. Online auction sites such as eBay have contributed to the emergence of the video game grey market. 10.How to control the web of Grey Marketing?In order to reduce the impact of grey market goods, firms can take the followin g strategiesEnforcement of intellectual property rightsManufacturers or their licensees often seek to compel trademark or other intellectual-property rights against the grey market. Such rights may be exercised against the import, sale and/or advertisement of grey imports. However, such rights can be reverberateed. Examples of such limit points include the first-sale doctrine in the United States and the doctrine of the exhaustion of rights in the European Union. When grey-market products are advertised on Google, eBay or other legitimate web sites, it is possible to petition for removal of any advertisements that violate trademark or copyright laws. This can be done directly, without the inter-group communication of legal professionals. eBay, for example, will remove listings of such products even in countries where their purchase and use is not against the law.Refusal to supplyManufacturers may refuse to supply distributors and retailers (and with commercial products, customer s) that trade in grey-market goods. They may also more broadly limit supplies in markets where prices are low.Refusal to honor warrantiesManufacturers may refuse to honor the warranty of an item purchased from grey-market sources, on the grounds that the higher price on the non-grey market reflects a higher level of service. Alternatively, they may provide the warranty service only from the manufacturers subsidiary in the intended country of import, not the diverted third country where the grey goods are ultimately sold by the distributor or retailer. This response to the grey market is especially evident in electronics goods.Reliance on regulationlocal anesthetic laws (or customer demand) concerning distribution and packaging (for example, the language on labels, units of measurement, and nutritional revelation on foodstuffs) can be brought into play, as can national standards certifications for certain goods.Tracing grey-market goodsManufacturers may give the same item different model numbers in different countries, even though the functions of the item are identical, so that they can identify grey imports. Manufacturers can also use batch codes to enable similar tracing of grey imports. Parallel market importers often de-code the product in order to avoid the identification of the supplier. In the United States, courts have decided that decoding which blemishes the product is a real alteration, rendering the product infringed. Parallel market importers have worked around this limitation by developing new removal techniques.