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Singapore Parallel Imports – A glass of ke kou ke le please

More and more Singapore shops are selling parallel import goods that range from cars, shampoos, CDs to drinks. These parallel goods are cheaper than the same goods sold through the authorised dealers. For example, the Chinese version of the Coca-Cola, with label in Chinese ‘ke kou ke le’, is sold at $1.95 (USD1.43) for a 2.3l bottle, whereas the locally packaged Coke is sold at $1,70 (USD1.25) for 1.5l. Similarly, CDs that come with labels such as “for sale in China only”, appear increasingly on local shelves and are sold at less than $9.00 (USD6.61), whereas the same CD manufactured by the same record company but imported by the authorised dealer will cost around $17.90 (USD13.15).

The local authorities were previously of the opinion that parallel imports were unlawful if the imported article is manufactured without the consent of the local copyright owner in Singapore. However, it was considered later that this ruling was inconsistent with the intent of the legislation to allow parallel imports. The Singapore High Court has indeed decided in November 2005 that Singapore being a free port, genuine goods made with the consent of the owner of the copyright in that export country, are legally sold in the country, regardless of their source. This case was the first in which the Singapore courts have decided to permit genuine goods to be brought into the country as parallel imports.

Recently, the Singapore Government has announced a further relaxation of the rules regulating the parallel importation in support of free trade and seems to view with favour parallel imports. It will result that the competition will be tougher and authorised dealers will have no choice but to cut their prices or to offer extras or incentives in order to be able to compete with parallel importers and maintain their clientele. The authorised distributors are now using advertisements to educate consumers that the parallel imported products have different specifications, or that the authorised importer provides after sales services or a “warranty” which justifies the price difference.

Even the sportscar company Porsche sees the parallel imports as “disturbing” which is not surprising as 15% of the Porsches sold in the first quarter of 2008 in Singapore are parallel imports. The authorised importer warns buyers that even though the price of a parallel-imported car is lower, buying an officially imported Porsche provides peace of mind as they offer service and maintenance for at least 10 to 15 years down the track, whereas parallel importers are just interested in selling the car.

As a consolation to authorised distributors, the Copyright and Trade Mark Act still prevent the importation of pirated goods under the pretext of being parallel imports.


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