With certain exceptions primarily related to antitrust, manufacturer's have the right, as a matter of law, to determine the means by which their products enter the market and how they are distributed.
In many instances, so-called "gray market" sales can be enjoined under the Lanham Act, which protects manufacturer's marks, particularly when the sales involve the contractually prohibited sale of goods intended for sale outside of the U.S. within the U.S. Thus, a manufacturer may ask U.S. Customs to seize and, in certain circumstances, destroy goods shipped to the States by a foreign distributor who is contractually prohibited from distributing in the United States.
Bear in mind that distribution agreements are contracts. Manufacturers have the right to grant exclusive distribution territories and to enforce them. This includes a prohibition on mail order or internet sales. The purpose of this is to maintain the exclusive territories conferred to the dealers.
Finally, manufacturers have the right to enforce contractual limitations on the type of sales that will be permitted, i.e., to end users only. In other words, a manufacturer can absolutely decide whether it wants its dealers reselling to other dealers or to non-dealers who intend to resell the product on a commercial level.
By way of example, if my LDS' dealer contract prohibits them from reselling to other dealers or to other entities who are engaged in the business of selling dive gear, then they cannot order Apeks regs and resell them to other Apeks dealers or to non-Apeks dive shops. It doesn't matter whether the buyer is another brick and mortar shop or LP.
This body of law is certainly not specific to the dive industry. I'm regularly shutting down gray market imports of goods ranging from dental restoration products to foreign film DVD's.
So precisely what are the manufacturers doing wrong?
