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Gray Market Film

It is Not Illegal, But Buyer Beware

By Peter Skinner

Gray market products may be the bane of many manufacturers' lives but they are integrated into today's business world and are a fact of daily commerce. In the December Bulletin we ran an item about a member who had bought Kodak film from a Brooklyn, New York, dealer, not realizing it was gray market film. There were color shift problems but the photographer was stuck with the results, and was out of pocket. He had complained to the New York State Attorney General who investigated the matter but was unable to assist. And the New York Attorney General sums up the best way to avoid being sold inferior quality gray market goods with this succinct piece of advice: educate yourself before purchasing it. In its Grey Market Fact Sheet the New York Attorney General states that "Grey Market goods are made by brand-name manufacturers, but are not intended for sale in the United States. However, some retailers generally interested in selling at substantial discounts, purchase these items through channels other than the manufacturer's authorized United States distributors. For example, a Japanese camera intended for domestic sale in Japan might have been brought into the United States for sale at a discount. However, the instructions for use of the camera are in Japanese and the manufacturer's warranty is not valid if the product is sold in the United States."

New York does have The Grey Market Disclosure Law, passed by the state legislature in 1985, which requires that consumers be alerted at the time of purchase that they are buying gray market goods. This law requires that notices must be placed in advertising, on signs, or on tags attached to the product. If the notices are not given, the stores may be sued for up to $500 for each violation. In addition, consumers who purchase goods without these notices are entitled to receive a credit or refund for up to 20 days after the date of purchase.

The New York Attorney General says that: "These notices must also tell consumers that the goods do not come with a manufacturer's warranty unless the dealer, importer, or distributor gives a written warranty which offers equal or greater protection than the manufacturer's warranty. The law specifies that whoever offers the warranty must be financially responsible and capable of fulfilling the warranty."

In addition to the New York gray market law, which does not prohibit sales of gray market goods as was incorrectly reported in the December Bulletin (Federal courts have held that it is legal to import goods on the gray market) but requires that buyers be alerted, there is another safeguard suggested by Eastman Kodak.

A Kodak representative wrote this statement, "... in response to the photographer who unknowingly purchased gray market Kodak Professional film from a dealer in Brooklyn, New York. In addition to checking the catalog numbers to make sure you have purchased made-for-the-USA product, Kodak Professional urges you to verify that your dealer is a Kodak PRO Products Network dealer. PRO Network dealers are authorized full line dealers for Kodak Professional traditional products. PRO Network dealers have agreed not to advertise or sell gray market Kodak Professional products. We have spoken to the photographer who received gray market product and confirmed that the seller was not a PRO Network dealer. To verify that your dealer is a PRO Network dealer, please call 1-800-290-0594.

"Do not be misled by advertisements from dealers that list an Import price and a USA price. First, these dealers are not authorized to sell Kodak Professional products. Second, in many cases the USA-listed product is also gray. Kodak Professional manufactures the majority of our film in the U.S., and it is labeled as such. A portion of this film is allocated for, and then sold in export markets to distributors. Unfortunately, this USA film is then purchased by gray market operators who import it back to the U.S. to be sold here - after all it says 'made-in-the-USA' on the box. For additional information regarding the PRO Network and gray market issues, please call the Kodak Information Center at 1-800-242-2424 ext. 19."

Members should be aware that ASMP does not have a policy of being against gray market products. When members have a bad experience and notify ASMP, we will report the event as a warning to other members. Also, as pointed out previously, gray market products are not illegal in New York but consumers should ask questions before buying.

© Peter Skinner/ASMP

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