Grey market (revision 7)

The grey market is trade in genuine goods outside the channels a manufacturer has authorised. It is distinguished from counterfeit trade by the goods being what they claim to be; what is irregular is the route, not the article. See Counterfeit peptide.^[1]

For research chemicals the term is used loosely, since much of the market operates without authorised channels in the first place. It is most meaningful where a licensed product exists and material is traded outside its distribution system, or where material intended for one use is diverted to another.^[2]

The substantive issue is provenance and handling. A genuine article that has passed through an unrecorded chain has an unknown storage history, and no analysis performed afterwards can distinguish manufacture from handling as the cause of what it finds.^[3]

Diversion occurs at several points: material sold for one purpose and resold for another, quantities in excess of a customer's use resold onward, or stock from one territory sold into another where prices differ.^[2]

Each of these leaves the goods genuine and the records incomplete. A parallel-imported medicine is the most familiar example and is lawful in some jurisdictions; unrecorded onward sale of research reagents is a less regulated analogue of the same structure.

The identifying feature is a break in the chain rather than a defect in the article. Where a chain is unbroken and documented, the goods are traceable regardless of how many hands they passed through. See Lot traceability.^[4]