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12 Jan 2004
Hewlett-Packard (HP) is claiming a legal victory in what it has dubbed its campaign to reduce unauthorised reseller activity across EMEA.
A UK court ruling has allowed the vendor to try to recover $2.3m in damages because of breach of contract by VAR Future Network Systems Sales (FNS).
Last month, the vendor issued a High Court writ against FNS which went into administration with debts believed to be between £3m and £4m.
Further reading
At the same time, HP announced stringent new anti-grey-market measures by integrating new buy, track and trace capabilities, such as spot checks and distributor audits, into programmes across EMEA.
Research by consulting firm KPMG revealed that the worldwide grey market for IT hardware is costing the industry about £3.1bn in lost profit, with the annual market worth £25bn.
Andy Vickers, director of channel and SMB HP UK, said in a statement: "This victory over FNS demonstrates our determination to weed out resellers that take away margin from legitimate partners.
"We want to protect our authorised partners and the customers that buy from them."
Stuart Mann, managing director of FNS, told CRN: "The company has not been trading for almost three months and, because there was no funding available and the company was seriously insolvent, we had no money or resources to fight HP's claim. It seems that a default judgement has been awarded."
Clive Longbottom, service director at Quocirca, said the grey-market problem is here to stay.
"The grey market will always be there because it's a way to make money. However, it's very costly for vendors and is difficult to stamp out," he said.
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