Panasonic hits back at Russian grey market claims

Japanese consumer electronics giant Panasonic has launched a legal challenge in Russia following charges by some of the country’s biggest retailers that the company is involved in grey market trading.

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By  Administrator Published  December 31, 2006

Japanese consumer electronics giant Panasonic has launched a legal challenge in Russia following charges by some of the country’s biggest retailers that the company is involved in grey market trading.

The six retailers – Evroset, El- Dorado, Svyaznoy, M.Video, Mir and Technosila – which together control more than 60% of the country’s consumer electronics retail market, said in a statement that Panasonic had been involved in “unscrupulous” business practices in Russia.

The situation, which has led the retailers to boycott the sale of Panasonic goods, rapidly escalated following the entry of new retailer Media Markt into the Russian consumer electronics sector.

As part of its opening week celebrations, the retailer offered Panasonic plasma televisions for up to 45% less than rival retailers.

Speaking on behalf of the retailers, Yevgeny Chichvarkin, the board chairman of Evroset, claimed that the televisions were smuggled across the border from Finland, thereby circumventing taxes of up to Russian import taxes of 35%, with the consent of Panasonic.

“We are not trying to police anyone,” Chichvarkin told the Moscow Times. “We are simply voting with our feet.”

Panasonic hit back at the claims, calling on the Russian Federal Anti-Monopoly Service (FMAS) to investigate the accusations.

The FMAS confirmed it was looking into the situation and planned to ascertain as to whether the position taken by the retailers constituted an attempt on their part to form a cartel, which is illegal under Russian law.

“The accusations of grey imports are absolutely groundless,” a spokeswoman for Panasonic’s Russia Office, Inna Borshchyova, told the Moscow Times. “We would like to resolve this amicably, clarifying the situation in talks with the retail chains, as, indeed, there is no fault of ours here whatsoever.”

Panasonic Russia general director Anton Semyonov confirmed that despite the company’s best efforts to crack down on grey market trade, a percentage of its products had reached the Russian domestic market via unlicensed channels.

Seymonov also suggested that a number of the retailers sourced product from grey market traders, but declined to identify them.

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