Unofficial trade too tempting to ignore

PUBLISHED : Saturday, 29 January, 2000, 12:00am
UPDATED : Saturday, 29 January, 2000, 12:00am

A booming unofficial export trade in Louis Vuitton products led to Thursday's clashes at the Peninsula Hotel in which 31 people were arrested after staff refused to sell them goods.

With prices for the brand considerably cheaper in Hong Kong than Japan, enterprising shoppers can cover the cost of a return flight to Tokyo by re-selling just one suitcase bought in the territory in Japan, and make a tidy profit if they are able to stockpile before they go.

Many of the items are funnelled into unofficial Louis Vuitton outlets in Japan, which can afford to undercut official stores and still come out on top.

Louis Vuitton managers said yesterday the phenomenon had been going on for some time, but they had no plans to increase security.

Guards at the entrance to each of the chain's Hong Kong outlets are believed to scrutinise potential shoppers and deny entry to those they suspect are buying with a view to resale.

Sources said the retailer did not deliberately put different price tags on goods in different countries.

They said Louis Vuitton was cheapest in France as there were no transport costs to cover.

Prices varied so much in overseas markets because of different import duties and taxes applied by governments.

Louis Vuitton is incredibly popular in Japan - the chain has 40 shops there, compared with seven in Hong Kong, three in Singapore, four in Britain and 15 in France.

The company says it has a policy of not selling to people suspected of being part of the unofficial Japan trade 'in order to safeguard our brand reputation, image, quality and our customers' interests'.

On Thursday afternoon, staff at the Ocean Terminal outlet refused to sell a wallet to a customer they believed was planning to sell it abroad; he responded by threatening the sales assistant and punching the display counter.

Twenty minutes later at the branch in the Peninsula Hotel shopping arcade, up to 100 people gathered outside shouting and banging on the door demanding to be let in.

Police said yesterday the 31 people arrested had been released on bail of between $1,000 and $5,000 each and ordered to report to Tsim Sha Tsui police station in mid-February.