Magazine article Marketing

Bordering on the Ridiculous

Magazine article Marketing

Bordering on the Ridiculous

Article excerpt

New EC import quotas on goods from developing countries have created a real headache for premium importers and sourcers of promotional merchandise.

Spare a thought for the cuddly bear you'll be giving as a birthday present this year; it might even now be an illegal immigrant, doomed to sit on a windswept dockside until someone can swing a black market passport.

Toys are a major casualty of some stunning Euro-legalese which has crippled importers by imposing, last year, stringent EC import quotas on various products manufactured in China - a country which is a key source of such promotional merchandise as soft toys and die-cast models.

Furious toy and premium importers lobbied for an appeal in the European Court of Justice but, as yet, no hearing date has been set. And this did not solve the immediate problem of how to cope with a market for promotional merchandise which demands personalised product both fast and on an open-ended brief.

In essence, customers ordering certain products from China - which usually provides the best prices - could not be certain of getting a licence to import the initial quantity, let alone repeat orders.

This means that even a wildly-successful promotion, if using Chinese merchandise, could nosedive when supplies run out. The sourcing companies say it's unlikely that extra product would gain an import licence and the system isn't able to cope with quick-response orders.

Most licences are granted on the basis of historical imports. This makes life difficult for premium-sourcing companies, which tend to dip into product sectors, depending on what has been ordered for specific promotions.

"A primary source of toy manufacturing at a good price was shut off," says Colin Squirrell, a director of Product Plus. "Things like soft toys, a very popular premium, were badly affected. We have had to re-source everything." The first casualties, last year, were some big retail brands, which were forced to pull out of planned promotions at the eleventh hour. "They had no choice but to cancel," says Squirrell.

This year, stress levels are up again. Importers, who spent a hectic six months re-routing lines of supply into other countries, are now facing higher import duties.

In January, the General System of Preferences, which gives a helping hand to developing countries by waiving import duties on certain goods, was revised so that exporters such as Taiwan and Singapore - which are now geared up to compete on a global scale - are no longer favoured.

A forecourt promotion planned by Mobil for two European markets, but sourced through the UK, was threatened when it became clear that the premium of coffee mugs was a quota victim. Ian Rosewell, a director of Audio Optic's sourcing division Procurement, speedily tracked down an alternative product in Taiwan, but discovered that it came with a GSP duty which bumped up costs by 6%.

"The client obviously was not happy," says Rosewell, "although it hasn't affected the success of the promotion, which did very well. There were, however, a lot of problems in putting it together."

But being flexible is second nature to the promotional merchandise-sourcing industry. When a powerful client like Kellogg's or McDonald's demands widgets, no-one is going to let a little red tape get in the way and companies have responded with inventive tactics just this side of legal, designed to make the best of a bad job. …

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