Hi, I want to ask all the sifus here that

My company is actually the appointed sole distributor for a certain food brand from Indonesia. The one my company selling now are export packing that made by the manufacturer in Indonesia. But lately, many other trading companies bring in the local packaging from the same manufacturer (They bought bulk from market and send in by container).

The local packaging that they are selling dont have any importer sticker but they got make declaration.

So, since my company are the sole distributor, is it possible that I can stop them from selling the local packaging that is not meant for Malaysia?

Thank you

yes yoh can. you have the distributor rights.

you can escalate this to the food brand that you have the rights with and also send a cease and desist letter to get them not to sell it without distribution rights.

also you can report for immigration, lhdn and even MOH and JAIS since anything you sell needs ISO certification and Halal chop and etc.

why immigration ?

I guess this is wat is termed by parallel importing. Its happening to Engine Oil brands (some you can find in TESCO or GIANT).

One of the way is to contact your Principal in Indonesia and see if there's a solution to this problem. With their assistance, then its easier to launch any legal proceedings with thse competitors you're finding in the market.

Else, the other way is education and educating market about Genuine vs Parallel Import. With Engine Oil, company DOES not recognize any damages caused if using a parallel imported product.

Few examples similar to your problem (most of them still not solved)

Imported Cars
Imported Engine Oils

Parallel import exists mean the sole distributor couldn't meet market demand e.g made too much profit, priced too expensive, stock shortage, poor distribution network, etc.

Unless solution is available quickly, the manufacturer is likely to appoint 2nd importer, allow parallel import or even set up shop themselves.

This post has been edited by icemanfx: Nov 21 2016, 06:02 PM

This.
Sometimes you need to adjust to market forces.

To buy from local distributor and resell couldn't be cheaper than directly from the manufacturer means ts company is making excessive profit.

It is a matter of time, a parallel importer will offer the manufacturer a better deal e.g higher volume, marketing budget, etc.

The manufacturer only appoint my company, it is very hard to stop parallel because other trading company sapu a lot at Indonesia's market and bring back. Thus the manufacturer is not aware of.

With this, is it possible that i can stop the parallel products from selling?

If the manufacturer is aware of amount imported is far higher than your purchase, your sole distributorship is numbered.

Instead if wasting resources to stop parallel import, you should focus on increasing your local market share. Have you approach parallel importers to appoint them as your dealer?

What you could do, is to send those parallel importers & retailers a legal letter (get a lawyer, they should know which letter). In the letter, mentioned that you're the sole distributor of Food Brand ABC as appointed by the brand owner/manufacturer in Indonesia (do attach your letter of appointment) & that they're liable of unauthorized sale of Food Brand ABC in Malaysia. Legal action can & will be taken for unauthorized sale or distribution after xx-xxx-xx (insert a deadline for them usually a month or so). However if they would like to continue selling, they may buy from your company instead. Then provide them the options available for them if they would like to legally sell it e.g. appointed agent, sub-distributors, authorized reseller, authorized dealer, stockist etc etc (any fancy titles you want).

Some parallel importers don't realize there's a sole distributor already. So if things worked out well, you'll get a new customer.

Some parallel importers don't care, so prepare to deal with them legally.

But like others who already mentioned, parallel importers exist because of market forces. Strongly suggest for you to take the market forces seriously, especially the pricing. If the parallel importers can earn WITHOUT GETTING the distributor's discount from manufacturer, do relook at your product pricing cause they most likely won't be bothered with your reseller/dealer scheme. As long as there's a gap in the market forces, parallel importers will pop up eventually. If you stop 1 today, 2 will pop up tomorrow. As the saying goes; wherever there's sugar, there'll be ants. So the root of your problem, is in your 4Ps.

i think u didnt feed the manufacturer enuf . thats why this happen .

clearly see that this happen because your target is not met.


what you can do is: before take any action, seek for manufacturer or your supplier.
take your piece of so called: " sole distributor" contract and discuss with them. with your finding and so on , how to solve the issue.

option 1: if you think the product is unique and can sell, you probably can source for alternative supplier with cheaper cost and better quality.

option 2: talk to the supplier, request to accept more volume to stop his other selling channel ( this will have problem in future)

option 3: just be it. and demand lower cost price from supplier stating that competitor availability

option 4. you cease the working relationship with them

Is sole distributor and sole agent the same thing?

If I am a sole agent and someone is doing parallel import from China wholesaler (not from manufacturer directly), can I take any legal action against the importer who bring in this products?Can I report to agency to seized those shop who are selling this products ?Our products are same,same barcode but mine with my company label

This post has been edited by peigeng: Aug 11 2020, 05:04 PM

Malaysian laws generally do not prohibit the importation and sale of parallel goods.
What is prohibited are counterfeit or ‘pirated’ goods. Counterfeit goods are essentially fake and unauthorized replication of the original products not originating from the trade mark proprietor.

We are not going to discuss further about counterfeit goods and will focus on the issues relating to parallel imports. One has to note that section 35(1) of the Trade Mark Acts 1976 (“the Act”) expressly states that the registered proprietor shall have the exclusive right to the use of the trade mark in relation to the goods/services applied for. On the contrary, you may recall that a parallel importer, even though he is not the registered proprietor of the trade mark, may import and sell products bearing the trade mark. In such a case, is there any infringement of trade mark committed by the parallel importer?

Section 40(1) deals with acts not constituting infringement. The provision that we would want to look at is section 40(1)(d) where it ‘legalizes’ parallel importation. This section is closely related to the principle of exhaustion of intellectual property rights. Once a particular product has been sold by the trade mark proprietor or his registered user, his trade mark rights are said to be exhausted. In other words, where the registered proprietor of a trade mark or his registered user has placed his mark on the goods which are then marketed, the registered proprietor loses all rights to control subsequent dealings with the goods. To illustrate, if a trader obtains a trade mark registration, he will have exclusive rights over the use of the mark and he can legally prohibit anyone from using and selling products bearing his mark. However, he cannot prohibit customers who have bought the products from reselling to third parties.

It is not an act of passing-off to import genuine goods from overseas and sell them here under their respective trade marks because there is no misrepresentation as to the origin of the goods.
more....
https://henrygoh.com/issues-revolving-aroun...rallel-imports/

https://www.google.com/search?source=hp&ei=...&sclient=psy-ab

The main question is, who can grant you area exclusivity & how it's being enforced?

If the China manufacturer has 3 wholesaler, what's stopping the 2nd & 3rd wholesaler to compete with you in Malaysia? If the manufacturer or the brand owner themselves isn't bothered, then your "sole distributor/agent" is just a fancy title with no backings to it.

Ultimately exclusive or sole distributorship is just an agreement between you & the brand owner. Thus, it's up to the brand owner to take action cause you have no authority over the brand. I think the common legal action that can be taken is the brand owner gets a court injunction to stop the unauthorized reseller from selling their own product. But you're not dealing with the brand owner. So, unless you have their support......doubt there's anything you can do with the other resellers here.

No.

The only different is if the product has warranty, the sole importer will not entertain the claim. They can repair but standard charges applicable.

Brand owner get court injunction to stop those resellers selling is definitely not in their point of view,because ultimately they are the producers and it is manufactured by them.however if Malaysia sole agent has this brand and trademarks registered in Malaysia,I as a sole agent can stop reseller selling this?

P.s. I understand that I can't stop them from importing but can I stop them selling as they have no exclusive right of selling in Malaysia.brand owner can back me up on this

This post has been edited by peigeng: Aug 12 2020, 07:31 AM

https://www.google.com/amp/s/amp.theguardia...battle-malaysia

Well if the brand owner can back you up, then you have better chance. So suit up & try to get local injunction to stop them from selling it in Malaysia.

Other than legal action.can we ask other authority to check and seized those product?It is a canned food products,I believe those seller didn't apply for jabatan kesihatan and kpdnhep approvals.just too bad our packaging are same ,same barcode, just without our label stickers.

In your case, if manufacturer wants to appoint sole distributors in every country, they wouldnt need to appoint a wholesaler or they instruct wholesaler to deal with appointed distributors only. It defeats the purpose of the supply chain.

A real market scenario during my time...

The printers market is so competitive in msia and major brands face tough market to supply to major tender customers from parallel importers.

This post has been edited by mini orchard: Aug 12 2020, 02:39 PM

No.manufacturer doesn't appoint anyone here in Malaysia.Our company is the only one to look for in Malaysia.however , Malaysia importer look for wholesaler in China and bring in this products.meaning to say, manufacturer didn't supply them directly.they bring in these consumables canned food without going through kesihatan and kpdnhep.and selling at much lower price.taobao is selling those products at very cheap price.our cost is roughly about the same as what you can buy at taobao.but those importers has no right to sell them at Malaysia market right?We have our band and trademarks registered in Malaysia,does this help to prevent them bringing in and give us more protection as a sole agent and distributor?

Basically you're suspecting that they're operating illegally i.e. no proper permit, license, procedures or approvals. Yes, you can report them if you have sufficient prove. If you even know that their foreign workers are working without permit/visa, can even report to Immigration Department. If you know that their premise didn't apply for business license, can also report to the local Majlis Perbandaran.

The fault lies with the manufacturer for appointing a wholesaler in China. If the manufacturer have tight control of supply chain, your problem wouldnt have happened.

The wholesaler is like you ... sell to anyone.

it is the people buy from China and sell in Malaysia wor...

is there any way for you to detect the product is from which country ?
base on the code etc.

buy some of the products from different location - get receipt etc

then send in official email to principal on the matter. stating ur concern about the parallel import.. proof is the purchase and the code which redirect to which distributor etc.
insist of the principal to warn/inform the dealer to not sell outside the country etc.

then, you make police report and get a IP lawyer.
send in official letter to the shop owner. continuing to do so, will proceed with court order
shoudl they interested on the product, they can get from u direct.

this wat i did back then.
when handling this parallel import issue.

This post has been edited by iOnine: Aug 12 2020, 03:31 PM

maybe can refer to this for some possibility to this route or avenue?
matrix for canned food import to malaysia....pdf file from
https://www.google.com/search?source=hp&ei=...Q4dUDCAc&uact=5

or if the profits is high and the impact of the parallel imported issues is big, can try do a awareness promotion in the media highlighting the parallel import issue and the "what are the concerns to the consumers" and telling how differentiate yours and parallel imported one.....??
example this product per image


Attached thumbnail(s)

It doesnt matter.

I can buy from outside China and sell in msia. Profit matters.

Just like the printers market, ... parallel importer buy from Indonesia and sell in msia.

yes, then it is not "The fault lies with the manufacturer for appointing a wholesaler in China." then

If manufacturer control supply chain and fixed a price, no one can sell below ts price.

parallel importer will be able to sell the phones in Malaysia at a price higher than the exporting country but lower than the authorized distributor or licensee in Malaysia due to factors such as fluctuations in currencies, different market strategy, trade policy and distribution costs.
https://henrygoh.com/issues-revolving-aroun...rallel-imports/

That is manufacturer business in China.we of course has no control who are they selling to.

[quote=iOnine,Aug 12 2020, 03:29 PM]
is there any way for you to detect the product is from which country ?
base on the code etc.

buy some of the products from different location - get receipt etc

then send in official email to principal on the matter. stating ur concern about the parallel import.. proof is the purchase and the code which redirect to which distributor etc.
insist of the principal to warn/inform the dealer to not sell outside the country etc.

then, you make police report and get a IP lawyer.
send in official letter to the shop owner. continuing to do so, will proceed with court order
shoudl they interested on the product, they can get from u direct.

this wat i did back then.
when handling this parallel import issue.


Yes.although our products packaging outlook are totally same, our product's production and expired are written in English, parallel importers stock are written in Chinese.thats the only difference. They even distribute to mini market and a lot of these local market start selling.this effect of business.so we need to find a way to stop them. From selling.will try what you suggest.btw,does report to kpdnhep help?

They are legit company.just that they are not getting approval from government agency for bringing these item.

I'm not saying the company is illegal. If they're not getting the proper approvals, that means part of their operations is illegal & that part can be reported. So, you can proceed with reporting them.

[quote=peigeng,Aug 12 2020, 04:09 PM]
[quote=iOnine,Aug 12 2020, 03:29 PM]
is there any way for you to detect the product is from which country ?
base on the code etc.

buy some of the products from different location - get receipt etc

then send in official email to principal on the matter. stating ur concern about the parallel import.. proof is the purchase and the code which redirect to which distributor etc.
insist of the principal to warn/inform the dealer to not sell outside the country etc.

then, you make police report and get a IP lawyer.
send in official letter to the shop owner. continuing to do so, will proceed with court order
shoudl they interested on the product, they can get from u direct.

this wat i did back then.
when handling this parallel import issue.


Yes.although our products packaging outlook are totally same, our product's production and expired are written in English, parallel importers stock are written in Chinese.thats the only difference. They even distribute to mini market and a lot of these local market start selling.this effect of business.so we need to find a way to stop them. From selling.will try what you suggest.btw,does report to kpdnhep help?

[/quote]

need to check with the IP Lawyer.

coz mine last time, the principal hired the IP lawyer and work with my side.
our issues was parallel import and fakes (petaling street)

btw, it'll be much more easier if you can determine the shops that sells parallel.
get pictures on display and the item. dont forget the frontal pic of the shop.


This post has been edited by iOnine: Aug 12 2020, 04:29 PM

Hmm...OK thanks .My case now is parallel import, not faked product .Will consult a IP lawyer then.

Yes.thanks.

yes. meantime need to do from ur end.
snap product display pictures, close up item pictures and the frontal of shop.
keep update and as proof.

but.. what IF the chinese supplier do changes the font.
it will look exactly like your product?
how to differentiate?

i hope u got keep track record since 2016 lor. hahah

Manufacturer can control prices and all their sole importers but if they have wholesalers, they cant do much.

In addition, any sole importer in any country that are found exporting to another country can have the agency terminated.

it is not exporting to sell in Malaysia...it is they sell in China, then the buyer in china sent to Malaysia

The issue is the supply chain. If manufacturer cannot control that, the problem cannot be solved.

yes cannot solve as can be seen from many other parallel imported goods in many other countries too.

i think,
it is not the manufacturer's supply chain issue...the supply, demand and distribution has no issue
it is the "globalization and entrepreneurships" of people.
where ease of communication, transportation and the availability of internet for info seeking and sharing do play a part

As a wholesaler, I want the liberty to sell to whoever and whatever price with my commitment to the manufacturer of a fixed monthly quantity.

As a manufacturer i want as much goods sold as possible that are within the legal binding of my distributors of each country or region.
i am also happy if there are people buy from those individually assigned distributor for resell on their own.
the more goods sold and the more people help me sell ...good for me.
i don't have to be "controlled" by an individual distributor....for that distributor or its associates maybe also making and selling something similar to mine too

Yes.That's why manufacturer side has no direct control to whom his own customer (maybe wholesaler or supermarket) want to sell to as
long as transaction fullfiled locally in china .that`s their own customer base.not to mentioned sea shipping is easy in China.quite hard to control.

Eg-supermarket sell to A in china ,A arrange sea freight and sell to B who is in Malaysia.B distribute our products without our consent. Checked with our lawyer, he said this is grey area in law.A isn't bound to any contract as a individual buyer.

So right now we can only complaint to kesihatan and kpdnhep.but any other ways to stop this B from buying?

This post has been edited by peigeng: Aug 12 2020, 06:27 PM

Yes totally agree .Even trademark or sole agent registered in Malaysia doesn't seems to help much.

I dun understand how those ppl can buy from China and resell to Malaysia at cheaper than TS sole distributor price in Malaysia? Unless TS not getting best price from brand owner?

maybe just maybe,
maybe the volume of order is not same? (China order very big qty)
maybe the manufacturer is in China too?
and also maybe as post in post 30?

China wholesaler volumn could be 10 or 50 times more than ts thereby lowering per unit cost plus volumn incentive plus monthly quota incentive.

It works the same here. Why 99-speedmart prices are cheaper than many hypermarkets for some products.

One retailer can sell below unit price but it never a loss sale. Free gifts of smaller pack with large pack by manufacturer used to be unbundled by retailers and sold separetely. But now manufacturer have it printed 'Not for Sale' but it didnt stop some retailers to cover the wording and resell.

If you follow Giant August merdeka promo, everyday, there is a product for sale at less 50%. When the right product for me, I will take minimum a dozen. So is other smaller shop owners .... they cant have this price from their wholesaler !



This post has been edited by mini orchard: Aug 12 2020, 07:12 PM

Those “loss leader” strategy is different lah... used 1 or 2 items to attract ppl

In business is all about strategy. Whatelse can fight off competitors ?

Good read.

I believe volume talk in business industry.big volume win.even parallel importer did not buy directly from manufacturer,but still more or less same as our cost .

bump