Andy Morton at just-drinks has recently published a focus feature on ‘The Grey Market – What is it and why is it causing concern?”.
The full article is available to just-drinks subscribers – please click here.
I was directly quoted on the article after a conversation with Andy during the TFWA World Exhibition & Conference in Cannes in October 2016. Andy included extracts from our conversation such as:
There’s one thing that everybody in GTR agrees on about the grey market
André de Almeida, Loch Lomond Group GTR head and William Grant & Sons’ former European TR director – “It’s something that we’re not ever going to be able to fully control because of the extent you’re unable to control the supply chain all the way down.”
It can damage a supplier’s relationship with distributors
“You have to try and control it as much as you can because, otherwise, it gets very difficult to manage the commercials down the line. In Travel Retail, you are working to make sure there is a certain amount of difference between GTR and domestic. And, if your stock is flying around all over the place, then forget it because it’s going to be almost impossible to control.” André de Almeida
Some operators are, understandably, coy about what exact steps they are taking to control the grey market
“There is a limit to what you can do in Europe, for example, because if you sell to someone in Holland then that person sells on to someone else [in the EU], you can’t restrict them. It’s not illegal in the EU.” André de Almeida
It frustrates a lot of operators
“It devalues [your brand] and you don’t want that. It’s easy to devalue it and you can do it quickly, but it’s much harder and takes a much longer time to build a brand.” André de Almeida
Finally, everyone in the industry has a grey market story to tell
“I remember working in the UK domestic market and seeing promotions on standard blends, and then, before you knew it, some of those blends had ended up in places like Gibraltar or somewhere else and you get complaints about it. There are always going to be people taking advantage of where prices are low because, ultimately, the market’s not perfect.” André de Almeida
Note that I have not included an extract of the full article – please contact just-drinks if interested in having full access to their articles.
Another recent article that covered this same topic was done by The Travel Markets Insider entitled “Going Grey: The impact of the parallel market in the duty free spirits channel“. Definitely worth a read and checking it out!