An international alliance formed by six major vendors to combat the threat of grey market activity has met with ridicule from the channel.
Apple, 3Com, Compaq, Hewlett Packard, Nortel and Xerox have created the Anti-Grey Market Alliance (AGMA), which will produce programmes to tackle the sector including educational initiatives, phone and email links for reporting grey market activity and law enforcement guidelines.
The grey market acts as an alternative source for the channel to purchase equipment. It is fuelled by high levels of vendor inventory that are shipped into the channel at reduced prices. Specialist distributors also import cheaper products into the UK.
The practice is legal, but substandard products are occasionally passed onto customers. Trevor Camp, European AGMA representative at 3Com, said: "There are some potential benefits to resellers from using the grey market, but AGMA's primary focus is to ensure satisfaction for end users."
However, a reseller, who wished to remain anonymous, said: "Of course we are careful. The grey market is not a bunch of Arthur Daley types; it is a legal, well organised, alternative channel which capitalises on vendor miscalculations. It is especially important during hard times. AGMA won't work."
Simon Minett, managing director at distributor Comstor, agreed. "Vendors should look inwardly before starting this sort of generic scheme," he warned.
Hedley Dickinson, sales manager at reseller Sinergie, said: "It is looking to kill off cheaper supply routes. I can't see many people standing up to back it."
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