Parallel trade is a worldwide phenomenon and has existed since goods were first traded. It can be seen with a wide range of branded products, from motor cars to computers, from cameras to pianos, and from compact disks to ski equipment.
The European Commission has defined parallel trade as "a lawful form of trade in goods between Member States of the European Union. Parallel trade is based on the principle of the free movement of goods within the Internal Market. It is known as 'parallel' to the extent that it takes place outside and - in most cases - in parallel with the distribution network that the manufacturers or original suppliers have established for their products at a Member State, while it concerns products which are in every respect similar to the ones marketed by the distribution networks."
The value of parallel trade in the EEA varies from sector to sector. A 1999 study by economic consultancy NERA found the following:
|Parallel trade within the EU|
|Footwear and leather goods||< 5%|
|Musical recordings||overall 5-10%, some releases up to 20%|
|Motor cars||estimates up to 5%|
|Consumer electronics||around 5%|
|Domestic appliances||< 5%|
|Cosmetics and perfumes||around 13% for upper end of market|
|Alcoholic drinks||< 5%|
- NERA and SJ Berwin & Co: The Economic Consequences of the Choice of Regime of Exhaustion in the Area of Trademarks, Report for DG XV of European Commission, London, 1999