Parallel imports cause headaches for grocery suppliers

Press Release 29/09/2011

“Many parallel imported grocery products fail to comply withNew Zealand’s food and grocery laws and damage the reputations of many local brands”, says Katherine Rich Chief Executive of the New Zealand Food and Grocery Council.

“While it’s clear we’d prefer retailers to support local Kiwi suppliers, we don’t debate their legal right offer parallel imported goods.

“What we do demand is that where importers or retailers bypass hard-working Kiwi firms to bring in random container loads from other markets, that all goods comply 100% with New Zealand’s food and grocery laws, particularly those relating to labelling and ingredients.

“Our members work hard to comply withNew Zealand’s food and grocery labelling laws. It creates an unlevel playing field when parallel importers snubNew Zealandrules and don’t face the same costs of compliance.

“The Milo example raised by Fair Go last night is just the latest example of how parallel imported products, legitimately made to the local tastes of other international markets, can disappointNew Zealandcustomers.

“Parallel imported products have usually been made for different markets with different laws and different taste preferences. It makes perfect sense that international brands are tailored to the tastes of local markets.

“However, there have been numerous cases recently where parallel imported goods either don’t meetNew Zealand’s clear labelling and composition rules or fail to meet Kiwi consumers’ expectations of their favourite local brands.

“Currently there is no legal requirement for retailers to tell shoppers that parallel imports aren’t sourced from Kiwi companies, but we think it’s misleading if retailers don’t make the effort, particularly when products differ from what Kiwis expect.

“Parallel imports create major headaches for our members. Interestingly, lost sales is not the biggest issue. The greatest concern is the reputational damage to local brands when Kiwis are rightly disappointed that products aren’t what they are used to.

“As one example, many parallel importers fail to comply with the labelling requirement to have aNew Zealandor Australian contact point for their goods. This means that complaints end up being directed to the local brand owner and not the people who've brought in the parallel imports.

"Most Kiwis would understand the frustration for local suppliers who face the cost and angst of customer complaints and damage to their brand reputation from goods they haven’t sold in the first place.

“There is little local grocery suppliers can do to control the rogue imports of other opportunists.

“What responsible importers and retailers can do though is ensure that they tell Kiwis when the goods might differ from their expectations and make sure the goods comply with all New Zealand laws, Mrs Rich said.