Parallel importation and exclusivity agreements : the public interest issue

Abstract

In this dissertation I have tried to identify and determine the role, legality and ethicality of parallel imports and exclusivity agreements and their implications on different spheres of society, namely: manufacturers, exclusive importers, consumers and last but not least the parallel importers themselves. In the first chapter the topic is introduced from a general perspective, by attempting to define the term 'parallel imports', and their role in market liberalisation and removal of monopolistic or dominant situations. The Introduction also includes a crisp, concise outline on the purpose and aims of this dissertation. Chapter Two includes a thorough analysis on European Union policies and legislation regulating parallel imports and exclusivity agreements with reference to the foundation case of Consten Grundi. This is followed by a comprehensive scrutiny of the Maltese legislation and legal frameworks vis-a-vis parallel trade with special reference to the Maltese Competition Act, which is to a large extent based on competition law in the European Union. In Chapter Three the reason for this inducement of parallel imports is discussed followed by an extensive debate on the pros and cons of parallel trade on consumers and brand owners. This chapter also includes a breakdown of the effects of parallel trade on pricing strategies in the European Union, which is of critical importance to Maltese businessmen given Malta's possible accession as member of the European Union. A lucid and comprehensive managerial strategy outlook is given on how companies can overcome the threats imposed by these parallel imports on their market share. Chapter Four is dedicated to a case study on the implications and inferences of parallel imports in the local scenario. This chapter defines the aims, methodology, problem identification, choice of sample and the method of research adopted. It focuses on an analysis of questionnaires sent and interviews carried out with several importers, retailers, national organisations and government departments. Chapter Five summarises the salient themes discussed in the previous chapter along with several recommendations of how the negative implication of parallel imports, which are becoming increasingly dispersed in today's society, can be overcome. The necessary mechanisms for safeguarding the public interest are extensively researched and recommendations included through the input of the various parties consulted. This dissertation ends with a general reflection on the various chapters.