In recent years, Hong Kong has tried to shake off an unfair but lingering reputation as a paradise for pirated goods. Despite the best efforts of police and customs officers, the United States has kept Hong Kong on a watch list for copyright piracy, claiming that infringement of American goods is increasing. The Copyright Ordinance, the latest move by the Government in the battle, will undoubtedly have a positive impact and help to stamp out malpractice, but this beneficial effect is not without cost to the local consumer. It also involves means that run counter to the normal practice of championing free trade which is so important for our economy and future development. The new regulations abolish a legal grey area which allowed 'parallel imports' to reach Hong Kong. This involved local retailers legally buying goods from wholesalers overseas at the most advantageous price. The price pressure it produced sharpened the local market and certainly benefited bargain-seeking consumers. Importers anxious to maximise their market share were also keen to see that buyers got imports at prices which matched competitive levels elsewhere in the world. Now all goods have to be purchased through an authorised Hong Kong distributor. The effect that this is going to have in local shops is already apparent. Quite simply, the cost to consumers will go up. The music giant EMI plans to add $8 to the wholesale price of CDs. And Warner Music says it is thinking of doing the same. Since these two firms between them have around half of the Hong Kong market, consumers are caught in an economic headlock. Music lovers with minority tastes, or those who wish to buy an obscure recording, can no longer request their dealer to order from abroad discs which are not available through mainstream channels. If the distributor does not want the trouble of making one-off orders, the only answer may be to take the ferry to Macau where normal service is still available. It is a strange twist in a bastion of the free market that an attempt to stamp out piracy should have ended up encouraging protectionism. The Government needs to keep a close watch over the cost of copyrighted materials to ensure that consumers get a fair deal. If it fails to do so, the Consumer Council should step in and publish comparative tables to show how Hong Kong prices compare with overseas.
