Illness delays parallel importing reversal

By KARYN SCHERER

The Government looks unlikely to reverse National's 1998 Budget bombshell, allowing parallel importing in its own Budget package tomorrow.

Labour has pledged to introduce a ban on the parallel importing of new-release books, CDs, software and videos, but work on the policy has been hampered by the ill health of Commerce Minister Paul Swain for much of this year.

The law change allowing importers to bypass official dealers of big-name brands was rushed through Parliament under urgency two years ago and has since sparked fierce debate over whether the benefits to consumers outweigh the disadvantages to manufacturers and licensed importers.

A spokeswoman for Mr Swain confirmed yesterday that officials had completed their report to the minister, but said the issue had not yet been finalised by the cabinet.

The music industry has lobbied hard for a ban, claiming that parallel importing makes New Zealand vulnerable to pirated CDs and damages the local industry by driving down prices and therefore royalties for local artists.

While the ban has not yet been finalised, the industry is expected to receive a sweetener in the Budget in the form of a Music Industry Commission, which will receive funding to foster local artists.

Meanwhile, the apparel industry is continuing to do some last-minute lobbying in the hope it can persuade the Government that parallel importing has allowed both scrupulous and unscrupulous retailers to flood the market with counterfeit clothing.

Although no cases have yet gone to court, there have been several out-of-court settlements between retailers and big-name manufacturers over claims of counterfeit goods reaching the shops.

The Warehouse, which has been one of the biggest winners from the law change, is understood to have settled last year with top surfing brand Quiksilver after complaints from the company that it was selling fake Quiksilver T-shirts.

The high-profile retailer is also believed to be negotiating with Nike over a shipment of Airmax running shoes it imported shortly after the law change.

At the time it brought in the shipment, The Warehouse boasted the shoes were "legitimate stock" at "substantially lower" prices.

Nike claims consumers who forked out up to $100 a pair for the shoes were duped.

Neither Nike nor The Warehouse would comment yesterday.

But The Warehouse marketing director John Journee said the company was now a lot more stringent about with whom it dealt.

"It would be fair to say we're a heck of a lot more sophisticated in the processes that we have in place now than when we first started," he said.

"If anything, we're erring on the side of caution. If there's an element of doubt, we're staying away from it."

Mr Journee said he did not expect a ban on the parallel importing of new-release CDs, videos, film and software to have much effect on the company.

Although the retailer was responsible for nearly a third of all CD sales, it was parallel importing only a fraction of its new-release stock.