ABSTRACT
The recession of 1989 and the concomitant appreciation of the Canadian dollar resulted in a serious business problem for Canadian retailers. Intellectual property rights protection accorded to the authorized importers is a source of conflict between business strategy and the law. The Canadian market is rather small and scattered thus inhibiting sizable economies of scale. Government regulation, an excessive tax burden, high property values and a high minimum wage all conspire to force Canadian retailers to charge a high margin in order to continue in business. Eighty-two percent of respondents surveyed either currently or in the recent past had engaged in parallel importation. Without exception, respondents who engaged in gray marketing saw the practice as a process necessary for survival in a border economic environment. Canadian suppliers, despite being made aware of the broader competitive environment of border communities, failed to respond to requests from Windsor retailers for competitive wholesale prices.
