ABSTRACT
Held to be the direct result of local distribution mores – and in particular the huge power of domestic/regional wholesale groups – the proliferation of gray trade activity continues to be a major problem for extant MNCs in Southeast Asia. During the research for this book we have noted many instances of angry multinationals discovering the existence of products produced in one country being illegally available in another. For example, the Unilever Vietnam management team become incensed with their Lao distributor on finding Lao tax stamps upon locally sold shampoos and detergent. Within the realm of theory such gray trading is prohibited in MNC agency agreements across national borders, with sole distributors being forbidden to “knowingly sell or dispose of their product to any person or persons residing or carrying on business in the territory with a view to the same being sent or exported to any place, country or state outside [the named country]” – and so forth.
