Grey goods come into the country, but money goes out, weakening the economy.  Grey imports damage the importing economy. By reducing the profitability of the manufacturer/distributor in the importing country, grey imports accordingly often lessen the amount of money that the company can invest in its operations in that country. This is a vicious circle which may reduce demand and so lead to greater inefficiencies in official importation. An acceptance of imports – especially of unclear provenance – hastens the demise of the manufacturing base of the importing country.1 The manufacturer will have less reason to support the brand locally through, for example, advertising, as the benefit does not show up in their local results and, in any case, grey imports tends to start focusing consumers’ minds on price rather than the brand identity. This can be detrimental to the advertising and media spend in the importing country, which for a premium consumer goods brand (e.g. perfume, clothing) could represent quite a significant economic benefit.  What is a loss for the economy is also of course a loss for the government. The United States Internal Revenue Service estimated 15% of workers did not pay taxes, a $345billion shortfall from what should have been paid in large part as a result of workers in the grey economy of which there are more than 140,000 in San Diego alone.2  1 Peacock, Louisa, 2010, ‘Go East, if you want that top job’, The Telegraph, 19 November 2010 ,  2 Calbreath , Dean, ‘Hidden economy a hidden danger’, Signs On San Diego, 30 May 2010