British experts speculate that there could be an explosion of goods on the Gray Market if Brexit is a no-deal. “Gray market” references real products that are sold but unauthorized, while “black market” refers to products that are being sold illegally or counterfeited.

The Concerns

Chief executive of Geometry U.K., Michelle Whelan, talked to CNBC. She explained that if there is no deal when Britain exits the EU, legitimate product pricing may see a climb by over 10% because of scarcity. Those with overstock or out of season items may undercut prices online with unauthorized sellers.

Whelan reported, “In the U.K., we are used to getting our goods from appropriate channels and open markets. Without a deal, a gray market explosion is a possibility.” She goes on to add, with the right amount of searching you can find gray market sites for everything from watches to furniture.

Why This Matters
Businesses prefer authorized sellers and licensed deals to provide an amount of control over presentation and pricing. Items sold on unauthorized channels can be sold at a discount. Multinational brands tend to make goods for specific markets. Resellers will buy from one country and sell in another on the gray market, where they haven’t been available, and it’s not against the law.

The far-reaching implications of buying in the gray market mean a business could see damage to their brand and image or a decline in products sold at full price, hurting their bottom line.

The gray market items on the internet can be easy to find, and shoppers consider this as the price for the item. This can force brick and mortar stores to offer huge discounts, causing a further decline in profits and sales in general.

UK governmental documents were leaked Sunday warning of the possible shortage of fuel, medicine, and even food if Britain leaves the EU with no deal. Michael Grove, the minister coordinating preparations said they are prepared for the worst-case scenario.

Black Market Possibilities

If goods become scarce due to the absence of a deal, there may be a rise of counterfeit goods on the black market. Whelan suggested that official sales channels with better technology could counter that rise in counterfeit goods.
The concern is primarily with small- to medium-sized businesses because of warehouse availability. Whelan noted that business and public readiness is at a low and suffering from unclear decisions over the EU exit.

Source:
https://www.cnbc.com/2019/08/21/a-no-deal-brexit-could-unleash-a-flood-of-fakes-retail-expert.html

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