Jan 23, 2019

Red Bull files 'grey market' goods lawsuit against US petrol station

Grey market goods can often be a confusing topic. Black market goods are clearly defined and (often) easily identifiable: they are counterfeits with no link to the legitimate manufacturer/brand. Grey market goods are, generally, legitimate goods marketed and/or sold in an illegitimate way.

In Red Bull's case, it is suing a petrol station in New Jersey for selling non-US Red Bull products that are, nevertheless, genuine Red Bull products. Red Bull, like most international goods producers, hawks its wares across a plethora of jurisdictions all with their own requirements. Some jurisdictions, for instance, will require more nutritional information to be displayed, or require that the volume of the contents must be marked in a specified unit of measurement.

The actual make-up of the product may even be different, with different jurisdictional attitudes to certain ingredients.

By allowing the sale of South African Red Bull in New Jersey, Red Bull itself may be accused of falling to ensure that its products are properly labelled or meet the required standard. It may, therefore, have taken the decision to sue the petrol station to protect its own position.

The sale of grey market goods is a worldwide problem. However, it is relatively unusual for goods from one developed nation to be sold unlawfully in another as in Red Bull's case. The problem is more common where a developing nation's products (which have a significantly lower cost and retail price) are shipped to a nearby developed nation where retailers can then make a much bigger margin. A common example is Indonesian goods being smuggled into Australia and New Zealand.

We will keep an eye on the Red Bull case, especially as it seems to be targeting an individual petrol station, presumably because it is unaware of the identity of the smuggler/wholesaler. We would have expected for the illegitimate importer to have been the primary target, and we expect there to be updates in this regard in the near future.

If you have any questions on the above, please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.



in: EU/International, Regulatory

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