Is Brexit going to kill Hungarian second-hand shops?

The remaining EU states’ relationship will drastically change from 2021, as the UK leaves the Union, although not all the details about Brexit have been agreed upon yet. Experts have now revealed how the transitional period’s end will affect second-hand stores in terms of legal changes.

After the transitional period, the harmonised trademark rules of the EU will no longer apply to the United Kingdom, which will have a huge impact on retailers who import goods from the UK with the purpose of reselling them domestically, Taylor Wessing Budapest Law Firm explained, according to Napi.

A trademark grants an exclusive right to its proprietor, meaning one can only use the protected mark with the proprietor’s consent, which applies to the sale of goods as well, meaning that the proprietor of a brand can determine where and how someone can market their goods as they have control over the trade.

Within the European Economic Area (EEA), their control is limited as, if a trademark-protected product is marketed in any of the EU countries with the proprietor’s permission, the trademark will be considered “exhausted” and no longer applies to further resale of the goods. Therefore, the proprietor cannot oversee the trade and resale of the trademarked goods between EEA countries.

This is how a Hungarian retailer can stock up on branded products in another EU state where prices are lower and then resell those products at a lower price than other Hungarian retailers without having to ask the owner of the trademark for permission. This is called “parallel trade.”