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Intel gets tough on grey market resellers

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CIOL Bureau
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CHENNAI: Last week, Intel sent a clear signal to the local IT market that it would take stern action against resellers dealing with grey products, by removing four resellers from its Genuine Intel Dealers (GID) list. Arch Computer Gallery, RM Computers, S3 Computers and Vajawat Computers are the four resellers who had been disassociated by Intel in business for dealing with grey products.



According to a close source to the company, "Intel has always been very strict with such practices and in fact, the resellers have been warned of stern action. Despite warnings, they continued to do so and Intel was pushed to take this extreme step." Intel's legal team carried out this exercise by masquerading as buyers.



According to market sources, Intel is expected to carry out similar exercises across India, mainly in Mumbai and Delhi where more resellers are believed to be dealing with grey products. Meanwhile, the local IT market in Chennai would see one more round of action to ensure the grey products are not being sold by GIDs.



However, a GID who is also a leading reseller in the market says, "Intel is playing the game and the present move is just to create an impression that the company is very strict with grey product dealers. In fact, many resellers who are also GIDs had been dealing with grey products for quite a long time and Intel was blind towards it all these days. Now, the really ‘Genuine' Intel dealers are completely dissatisfied with Intel and to placate them, Intel had to take some action."



"Intel always believes in fair business practices and this is just an allegation. In fact, Intel's legal team is regularly involved in such exercises. However, there should be a cautious approach when dealing with critical issues like this," according to the source close to the company. The last time Intel's legal team carried out such exercise was over a year ago in Chennai.



"Almost every GID in the market deals with grey products and if Intel has to take action it has to remove everyone from its GID list. However, we have no comments on the Intel's decision and it hardly affects our business anyway," said Prashant Tyagi, Director, Arch Computer Gallery.



"Intel is afraid of competition and today, almost everyone is dealing with grey products and Intel has to take action against everyone. I really do not know why we are being targeted particularly," said one of the affected GIDs. It is believed that the average grey market percentage is between 5-8 percent anytime and it is a manageable number. However, in the last four months the grey products percentage has increased and touched up to 15 percent which has prompted Intel to take serious action against those who are dealing with it.



"Intel can take action only against its GIDs who are dealing with grey products. However, the government should play a major role in curbing this menace. If the port authorities are strict with unauthorized importers, how would the market get such products," questions the source.

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