Grey Market of Goods in Brazil
The unofficial – but legal – sale of different products is a common practice nowadays, considering the easiness of buying goods in others places and via internet.
Do You Know What a Grey Market Is?
Everyone knows or at least has already heard about the black markets, those underground economies in which there is illegal buying and selling of goods. But have you ever heard about grey markets?
A grey market, differently from a black market, is a parallel, legal and unofficial market, where goods are bought and sold outside the distribution channels that were authorized by the manufacturers to commercialize. Grey markets usually don't offer safety and certification codes and don't provide any support in case the good is not functioning properly.
This type of market has become really common with the opening of international borders and the trading products via internet. If the product you are buying is much cheaper in comparison to the ones sold by the other resellers, you are probably purchasing a good from the grey market. Wrong accessories that may accompany the product, or photocopied manuals can also indicate that the good bought is a grey market item.
Buying a grey market good means that you won't get any technical assistance if the product eventually stops functioning. It also means that you'll be paying very few taxes on the product – or no taxes at all. However, this is not a good deal: the grey market undervalues the national market and makes the competition between official and unofficial sellers unfair.
Grey Market in Brazil
The grey market in Brazil reach different segments of the economy. Autoparts, technological goods – mobile phones, tablets, computers and their respective components –, video games, cosmetics, perfumes and even clothes are commercialized in trading channels other than the ones authorized, specially through websites and by small traders.
These products are usually bought in places like Paraguay or Miami, but lately there has been some of them brought from Peru and Venezuela as well, among other countries. They are sold in many different places, including at camelôs, the street vendors that are common in Brazilian cities.
Cases of cargo stolen from the transportation trucks are quite usual; some of the products are distributed between stores and sold as official goods.
These cases are the ones which represent the major losses in economy, because most of the times, the cargo stolen is composed by electronic devices, such as mobile phones, tablets and other expensive equipments.
To have an idea of how much this affects the official market, recently a cargo of tablets and smartphones that had been stolen in Campinas (in São Paulo) was recovered by the police. Its estimated value was of BRL 15 million.
Considering that it's very common to have cargo stolen, the impact in the national economy is huge. In the first semester of 2011, only in São Paulo state, over 3345 cases were registered by Setcesp, the Union of the Cargo Transportation Companies of São Paulo and Region. From these, 834 were cargo of food and 574 of electronic goods. The value of the food cargo is, however, smaller than the electronic goods cargo.
Cargo of food are sometimes stolen in order to be resold by street vendors, that commercialize the items in the traffic jams. There are also sales to grocery shops, supermarkets, public markets, slaughterhouses and other establishments. Usually these stolen products aren't stored in a properly way, which consequently can make them inappropriate for consumption.
Technological products can be found in some stores, even in some well-known ones – though we will never even know if they are selling stolen cargo or not. However, these items are usually commercialized in places or neighborhoods known for being specialized in the sales of this determined products.
Video games sold in the grey market are usually much more cheaper and varied than their original versions, because people who sell them pay almost no taxes (if and when they pay them) and are usually in contact with their clients to know exactly what they want.
Automotives and Autoparts
Autoparts can be found unofficially in places where there are desmanches de carros – in other words, when the parts of the cars are taken away and sold separately. At these desmanches, there are both cars that are purchased by the owner of the "desmanche" and in some cases stolen ones.
In 2012, 233 159 cars were stolen, which represents a small decrease in comparison to 2011, when 237 546 cars were stolen. The one preferred by thieves is Volkswagen Gol with 39.350 units, against 18.727 steals of FIAT Uno, the second in the ranking.
One of the reasons for the big occurrence of steals of these cars is the fact that they are the most sold ones, and the grey market for these cars autoparts is big.
Perfumes, cosmetics and clothes, specially designer items, are much cheaper abroad than in Brazil. Knowing this, some people who travel to other countries buy a considerable quantity of these goods to resell them back in Brazil. Taking into account that in Brazilians airports sometimes there is no luggage inspection, some people are able to bring products without paying taxes and resell them.
These goods, however, and video games as well, do not represent as big impact in the Brazilian economy when compared to the stolen cargo. Nevertheless, they still harm the economy, only in a much smaller proportion.
People who sell grey market items do not pay all the taxes for them. More than that, they weaken the Brazilian market by not including the sales of products in the national share.