Feeds

Parallel politics: Gerry Harvey, imports and taxes

Oligopoly screwing oligopoly redux ends 2011

Secure remote control for conventional and virtual desktops

There’s a curious symmetry about how 2011 is ending: once again, retailer Gerry Harvey is complaining about GST inequities for online shopping, just as he was at the beginning of the year. Once again, Harvey is distracting attention away from vendor price-setting, just as he was at the beginning of the year.

However, as the year ends and the cozy cartels of "exclusive distribution" and "recommended retail price" unravel a little futher, Harvey is joining competitors Kogan and JB HiFi in the discount game, unveiling a direct import site that is taking orders for console games through Harvey Norman Ireland at prices that reflect a heavy discount compared to “official” Australian prices.

Curiously, Harvey seems to have some kind of special status among Australia’s press, with none of the metro news operations hanging the “grey market” tag on the retailer.

The Harvey Norman direct imports http://www.harveynormandirectimport.com/ site, a domain that was only registered on December 16, went live on Thursday December 22 (Sydney time) and, to pick a couple of titles, is offering Skyrim at $AU59, Assassins Creed: Revelations at $AU55, and Deus Ex: Human Revolution for $AU26.

Games are sold subject to a flat delivery fee of $3.95.

Harvey has been clear about the price differences, telling shoppers that if they buy in his stores, they will pay more – but attributing the difference to government tax policy.

He told the ABC Radio program AM that he has no choice: “I understand why consumers want to get a cheap deal – I do too. So if that’s the way [customers] want to play the game, I’ve got no choice.”

Harvey also notes that retail is a large employer, saying that if “three or four hundred thousand jobs drop out of retail, you drop a million people out of work” around the country.

However, in attributing the price gap solely to Australia’s GST (Goods and Services Tax) rules, Harvey seems once again to be indulging in political distraction. Harvey correctly notes that the GST is not collected on imports under $AU1,000 – not because the tax isn’t legally due on those purchases, but because Australia’s customs agency has determined an arbitrary cut-off below which it would cost more to collect than the GST would return.

But the GST’s impact on purchase price is limited.

Take Assassins Creed: Revelations, which sells at local competitor EB Games for $AU88: there is no way that the $AU8 GST component accounts for the gap between the local bricks-and-mortar price and the direct import price.

As The Register has repeatedly asserted during 2011, vendors’ pricing policies remain the turd in the teacup: with tightly-controlled local channels and an intransigent attitude, vendors milk those markets historically prepared to pay more, and are refusing to adjust to a new reality in which the Internet allows people not only to envy the prices offered to other territories – but to take advantage of them.

In turning his guns – again – on the government, Harvey is distracting attention from the vendors, which is a pity. The more the vendors are made to wear the odium for price-setting, anti-competitive behaviour and geographic price discrimination (many of which would be illegal if they were conducted on Australian shores), the better it would be for everyone, including local retailers.

And some of those local retailers are Gerry Harvey’s own franchisees. ®

Bootnote: If anyone likes finding potential “gotchas” in terms and conditions, the Harvey Norman Direct Imports T&Cs are worth a look. If any customs busybody does decide to inspect your package, it’s not subject only to Australian taxes – Ireland and the UK could also decide to take a slice.

Customs might also decide that the international version of the game needs to pop off to the classification board, to make sure you’re not trying to circumvent the censor. It’ll probably never happen, right? ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Xperia Z3: Crikey, Sony – ANOTHER flagship phondleslab?
The Fourth Amendment... and it IS better
Microsoft to enter the STRUGGLE of the HUMAN WRIST
It's not just a thumb war, it's total digit war
Tim Cook: The classic iPod HAD to DIE, and this is WHY
Apple, er, couldn’t get the parts for HDD models
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Sporty in all but name: Peugeot 308 e-THP 110
Car of the Year? Arguably. Engine of the Year? Indubitably
Caterham Seven 160 review: The Raspberry Pi of motoring
Back to driving's basics with a joyously legal high
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
How to simplify SSL certificate management
Simple steps to take control of SSL certificates across the enterprise, and recommendations centralizing certificate management throughout their lifecycle.