Trademarks Mauritius Final Clean

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Socio-economic impact assessment to determine the feasibility of

the adoption of the international exhaustion regime for trademarks
by the Republic of Mauritius
November 2023
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Report produced by Tutwa Consulting Group
November 2023
(Updated 18 December 2023)

Contents
1. Chapter 1: Introduction ................................................................................................................. 14
1.1 Introduction ................................................................................................................................... 14 Page | 3
1.2 Definition of trademarks ............................................................................................................... 14
1.3 Background .................................................................................................................................... 15
1.4 The Mauritian context ................................................................................................................... 15
1.5 Scope of the study ......................................................................................................................... 16
1.6 Conclusion ..................................................................................................................................... 17
2. Chapter Two: Significance of trademark regimes............................................................................ 18
2.1 Introduction ................................................................................................................................... 18
2.2 The importance of trademarks and the difference between national and international
exhaustion ..................................................................................................................................... 18
2.3 Arguments for and against parallel imports .................................................................................. 20
2.4 Trademark regimes elsewhere in the world and their implications ............................................. 21
2.5 Conclusion ..................................................................................................................................... 30
3. Chapter Three: The Mauritian economic landscape and the implications of international exhaustion
31
3.1 Historical overview and political economy of Mauritius ............................................................... 31
3.2 The Mauritian economic context .................................................................................................. 31
3.3 International trade ........................................................................................................................ 33
3.4 The Mauritian socio-economic context ......................................................................................... 34
3.5 Public-private partnerships (PPPs) in Mauritius ............................................................................ 36
3.6 The Mauritian trademark context ................................................................................................. 37
3.7 The Mauritian legal and regulatory context .................................................................................. 38
4. Chapter Four: Sectoral Analysis ..................................................................................................... 44
4.1 Pharmaceuticals Industry .............................................................................................................. 44
4.2 Automotives Industry .................................................................................................................... 48
4.3 Food and Beverages Industry ........................................................................................................ 51
4.4 Clothing and textiles industry ........................................................................................................ 55
4.5 Conclusion ..................................................................................................................................... 58
5. Chapter Five: Socio-economic impact assessment .......................................................................... 59
5.1 Introduction ................................................................................................................................... 59
5.2 The socio-economic impact: A hypothetical assessment .............................................................. 59
5.3 The economic model ..................................................................................................................... 62
5.4 The econometric methodology ..................................................................................................... 64
6. Chapter Six: Data Availability and Implications .............................................................................. 66
6.1 Available price data ....................................................................................................................... 67
6.2 Assessment of sector-level impacts: How will markets shift under different scenarios? ............. 69
7. Chapter Seven: Recommendations ................................................................................................ 80
7.1 Preparing innovative business strategies for international exhaustion ........................................ 80
7.2 Policy, legislative and regulatory recommendations across sectors ............................................. 80
7.3 Recommendations for the pharmaceuticals sector ...................................................................... 81
7.4 Recommendations for the clothing and textiles sector ................................................................ 81
7.5 Recommendations for food and beverages sector ....................................................................... 81
7.6 Recommendations for the automotives sector............................................................................. 82
8. Concluding Chapter ....................................................................................................................... 83
Annexures
References Page | 4
Executive Summary
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International exhaustion of trademarks has been a policy option that Mauritius has been considering for two
decades. Legislation has been moving in the direction of an international exhaustion regime for trademarks
– also known as parallel imports – especially with the promulgation of the Industrial Property Act of 2019,
which came into force in 2022. Nonetheless, Mauritius has stopped short of allowing parallel importation
because of the strong advocacy from groups within the private sector against this policy transition. The
arguments have been that parallel importation would have a profoundly negative effect on their businesses
and on the economy.
With this study, the Consultants are considering what would be the practical consequences and implications
for the country should there be a move to international exhaustion. A careful consideration of the possible
effects on the socio-economic ecosystem of the island state of Mauritius is undertaken, along with
econometric modelling, focusing on the pros and cons of international exhaustion of the trademark system
– with a view to understanding how the country’s economic wellbeing would be impacted.
Process and timeline

The study, commissioned by the Commonwealth Secretariat and undertaken by Tutwa Consulting Group, ran
from July 2023 to the end of November 2023. In total, 92 people were interviewed representing the three
major actor groups affected by the study – viz., the Mauritian government, the private sector, and consumer
representatives. Concurrently, an economic analysis was undertaken, which aimed to model the impact of
the adoption of the international exhaustion regime for trademarks.
Flowchart of meetings and deliverables under the Project
See Annexures for larger image.

The flowchart above sets out the process and timeline of meetings and deliverables over the five-month
period (a larger chart is set out in the Annexures). The number, and diversity, of meetings provided the team
with a good understanding of the stakeholder views and their motivations. There was a clear rationale for
the policy preferences of each stakeholder – whether this was because of the anticipated greater competition Page | 6
and lower costs, or a fear of job losses and erosion of quality stemming from the introduction of international
exhaustion.
While the original terms of reference called for four experts over a four-month period, the Consultants were
supported by a Senior Economics Modeller in Nairobi, as well as economists in India. The team also requested
a no-cost extension to run modelling exercises and scenarios when it was clear that the data from the
corporate sector was insufficient to develop any significant models.
As with earlier studies attempting to model the same (or similar) impacts in different jurisdictions, data on
conditions prior to parallel importation were severely limited. So, the impacts of parallel importation were
difficult to calculate. From the interviews and survey conducted by the Consultants, the expected price-
reducing effect of increased competition from parallel imports led trademark holders to fear that
international exhaustion could dilute their intellectual property ownership of branded products in Mauritius.
They believed that this would potentially harm their businesses, having negative macroeconomic impacts on
Mauritius, including a further trade imbalance, increased unemployment, exchange rate instability, and
decreased investment. Also, the persistent question concerned whether Mauritian authorities could enforce
regulations on parallel imports, and act against counterfeit goods.
Reliance on off-the shelf prices

The team in Mauritius, South Africa and India conducted off-the-shelf pricing analyses. The tables of products
and their prices in Mauritius, South Africa and India are provided in Section 6.1. These initial price points
allowed for the initial price points for the econometric analysis. Nonetheless, for price equilibrium (PE) or
computable general equilibrium (CGE) modelling, multiple prices over a period, for multiple differentiated
product lines are required to make the analysis tractable. A weighted/composite price that represents the
products at a sectoral level is needed.
After the price data was researched and calculated, time constraints allowed only for what we deemed to be
“the most likely/plausible scenario”. Other of the scenarios were merely for illustrative purposes, and unlikely
to happen. With further time and resources, additional scenarios can be run that capture a wider range of
possibilities.
Mauritius economic overview

Mauritius is a small island developing state (SIDS) with a liberal trade policy and a history as a net importer.
The country faces several socio-economic structural challenges that can impact its long-term socio-economic
development.
Limited Resources and Narrow Economic Base: Mauritius has limited natural resources, which makes it
heavily reliant on imports for raw materials and energy. This dependence on external sources can lead to
supply chain vulnerabilities and price fluctuations, affecting the cost of production and competitiveness. The
economy is relatively concentrated in a few sectors, primarily textiles and apparel, sugar, and tourism,
amongst others. Overreliance on these industries can be risky, cascading down to the entire economy.
Vulnerability to Crises and Shocks: As a small island nation, Mauritius is subject to external economic shocks,
such as changes in global commodity prices, natural disasters, and economic downturns in economies of key
trading partners. This vulnerability can disrupt its trade, seen during the COVID-19 pandemic with value chain
disruptions and closures and lockdowns affecting the economy and exacerbating challenges for stability and
growth.
Environmental Vulnerability: As a SIDS, Mauritius is particularly vulnerable to climate change and sea-level
rise. This poses a threat to its infrastructure, agriculture, and coastal communities, potentially leading to
increased adaptation and mitigation costs. The Mauritius government has put resources behind land
reclamation programmes already, and expenditure on these initiatives are likely to increase. Page | 7
Low Manufacturing Base and Skills Gap: Efforts have been made to diversify the economy, however, there
is limited progress in higher value-added industries. Being stuck on low-skilled manufacturing and traditional
agriculture can limit the country's long-term competitiveness. A large proportion of the Mauritius labour
force faces skills gaps that would promote the development of a knowledge-based economy, especially in
new technologies and international finance. Mauritius low manufacturing base has hampered its capacity to
export goods, leading a trade deficit that has grown over the last two decades.
Trade and Investment Agreements: As a small open economy, forging partnerships within regional blocs
provide Mauritius with greater bargaining power vis-à-vis larger, established trading partners. In addition,
the opportunity for greater foreign direct investment – especially for partners to capitalise on the African
Continental Free Trade Area (AfCFTA) – should not be underestimated. Mauritius has also initiated trade and
investment agreements with large economies, like India and China. In addition, Mauritius is one of the
countries in the Interim Economic Partnership Agreement (iEPA) together with Comoros, Madagascar,
Seychelles and Zimbabwe, as well as being a beneficiary country of the African Growth and Opportunities Act
(AGOA).
Demographic Challenges: Mauritius has attracted foreign retirees with its tax-friendly regime. Benefits range
from no tax on wealth, inheritance, dividends, and capital gains; a progressive tax rate of between 10 to 20
%. Nonetheless, balancing the needs of an aging population with the demand for skilled workers is a
challenge.
Mauritius company information and trademarks registered 1
2021: 73.3 million

trademarks globally
1MCCI has indicated their association partners as: Business Mauritius (Partner Member); Association of Mauritian Manufacturers (AMM); Overseas
and Outsourcing Telecommunication of Mauritius (OTAM); Mauritius IT Industry Association (MITIA); Mauritius Bankers Association (MBA);
Association des Hoteliers et Restaurateurs de l’Ile Maurice( AHRIM); Association Mauricienne des Femmes Chefs d’Entreprise (AMFCE); Association
Professionnelle des Transitaires (APT); Association Professionnelle des Agents Maritimes Mauriciens (APAMM); Association of Communication
Agencies of Mauritius (ACA); Association of Registered Private Training Institutions; Chinese Business Chamber; Indian Traders Association; and
Economic role of trademarks
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Branding and Trademarks are vital symbols of a company's identity and can create customer loyalty.
Identity
Customer Trademarks provide consumers with a way to distinguish products and services and familiar
Confidence and trademarks allow for confidence in the quality and consistency of the products or services,
Choice allowing informed choices.
Protection from Trademarks grant businesses exclusive rights to use a specific name, logo, or symbol for their
Imitation and goods or services preventing the use of similar marks that could dilute brand value, allowing
Counterfeit customs officials to identify potentially counterfeit goods from entering the market.
Competitive A well-established trademark provides a competitive advantage making products or services
Advantage recognizable and memorable in a crowded marketplace.
Trademarks can be valuable assets for businesses whose value can appreciate as the brand
Increased Value
becomes more recognized and trusted.
Trademarks provide legal recourse against unauthorized use or infringement so that unlawful
Legal Protection
use of their trademark can result in damages and injunctions to stop the infringement.
Trademarks can be registered internationally, allowing businesses to protect their brand in
Global Growth
multiple countries, crucial for expanding their market presence globally.
Trademarks encourage innovation by providing businesses with a way to protect their unique
Innovation branding elements. Knowing their trademarks are safeguarded, companies will invest in
branding and marketing.
Two views on parallel imports
Mauritius Chamber of Merchants. Overlap between MCCI and Business Mauritius has not been considered.
World map with trends on trademark exhaustion
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Economic performance and international partnerships

Mauritius has shown high growth rates since achieving independence in 1968. Prior to the effects of the
COVID-19 pandemic, the country reached high-income status. However, the shut-down of the tourism-led
economy took its toll, exacerbated by the country’s reliance in imports of global goods – which became
harder to come by and more expensive due to global value chain disruptions during the pandemic. As an
open SIDS economy, Mauritius faces vulnerabilities linked to global economic risks and the quirks of global
markets.
Nonetheless, the country could build its resilience by concentrating on building real value-added
manufacturing capacity, encouraging sustainable and inclusive foreign direct investment (FDI) partnerships,
and bringing the trade imbalance in line. Focusing on smart, digital infrastructure to support beneficiation
and industrialisation should be focused on greater export capacity and levelling out the costs of imports –
either by importing less, or by reducing the price of imports.
GDP– forecast 5% from 8.3% in 2022, Inflation 9%

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Trade deficit – reached Rs 208 billion in 2023
Mauritius is committed to several preferential trading agreements, that contain far-reaching economic protocols
including on investment, competition and intellectual property. The Most Favoured Nation (MFN) Principle,
according to the World Trade Organisation, of which Mauritius is a member, links trade and investment
agreements ensuring that the parties to one treaty provide treatment that is no less favourable than the treatment
they provide under other treaties in areas covered by the clause.
• Member of the Common Market for East and Southern Africa (COMESA) and the Southern African
Development Community (SADC).
• Secretariat of IORA - aimed at strengthening regional cooperation and sustainable development within the
Indian Ocean region through its 23 Member States and 11 Dialogue Partners.
• Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India (February 2021).
• Signed and ratified AfCFTA, joined the AfCFTA Guided Trade Initiative on 7 October 2022., to facilitate
commercially meaningful trade for eight participating countries: Cameroon, Egypt, Ghana, Kenya, Mauritius,
Rwanda, Tanzania, and Tunisia. Under the AfCFTA, the Intellectual Property Protocol is moving towards
regional exhaustion of IP.
• The Mauritius-China Free Trade Agreement was signed in October 2019, in force 1st January 2021, China’s
first FTA with an African country.
• EU iEPA on three key components namely trade in goods, fisheries and economic development cooperation
together with Comoros, Madagascar, Seychelles and Zimbabwe.
• Mauritius is a member country of the Africa Growth and Opportunity Act (AGOA). The US is focused on
renewing AGOA with African economies in 2025 within the context of the AfCFTA.
The econometrics analysis

Partial Equilibrium (PE) models are a good tool to explain how prices are determined against given quantity
supplied and demanded, when a sector or market is viewed as independent of other sectors, ceteris paribus.
Ideally, the PE models need to be complemented with Computable General Equilibrium (CGE) model and
Gross Margin analysis. A CGE model determines national economic growth, including incomes and domestic
demand, and how this effects macro indicators like exchange rates. There has not been enough data (and
time) to compile all complementary models to complete the analysis.
Representation of a partial equilibrium model
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The position of the partial equilibrium model in overall economic wellbeing analysis
Four sectors subject to the partial equilibrium analysis
The econometrics analysis during the study has taken account of four important sectors vis-à-vis trademark
exhaustion. Considering the time available, the analyses were restricted to only four sectors. There are key
points that have acted as guiding principles during the study:
▪ Special treatment must be afforded to support manufacturing capacity.
▪ Recognition of need for foreign direct investment for new capital and new productive capacity.
▪ Foreign direct investors require cost-effective imports, including branded components and APIs.
▪ Regional and global value chain development (e.g., EU EPA and AGOA) and rules of origin – taking
note of percentage of local materials.
Highlights from the PE Analysis
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The aim of the modelling process has been to calculate the consumer surplus (the benefits consumers receive
from buying at a price below the price that they were willing to pay) and the producer surplus (the benefits
producers receive from selling and the lowest price they would accept for the product).
An initial price and quantity demanded, and quantity supplied (national exhaustion of trademarks) are
determined. Then the reduction in price is simulated, tracking how the quantity demanded and quantity
supplied move.
With an economic situation simulating the price reduction, quantity supplied, and quantity demanded
expected with international exhaustion of trademarks, the new consumer surplus and producer surplus are
calculated. The initial consumer surplus is subtracted from the new consumer surplus, and the initial
producer surplus is subtracted from the new consumer surplus.
The results from the two calculations – the difference in the consumer surplus and the difference in the
producer surplus – are added together and this provides the total benefit to society. If the benefit to
consumers is greater than the loss to producers, the policy change is determined to put society in a position
that is of higher well-being. Trends in the analysis – despite challenges with access to the most relevant data
– indicate that society is somewhat better off in the simulated international exhaustion model.
Trade, investment, and geo-politics

The geopolitical position of Mauritius as it negotiates its international status within several economic
partnerships (the AfCFTA, SADC, COMESA, iEPA, AGOA, the CECPA and the China-Mauritius FTA) makes
parallel importation a logical choice. These partners have, by and large, IP agreements where there is at least
a regional exhaustion of trademarks regime in place. Maintaining national exhaustion would leave Mauritius
at a disadvantage – paying higher costs for imports of branded goods than its trading partners.
Foreign direct investors would likely prefer to pay lower prices for their imports of branded goods and
components in the manufacture of new products for domestic use (for instance, in medical services); for sale
(computer chips in televisions or computers), or for export (trade in services from the computers used in
business processes) from operations in Mauritius. These scenarios described above undoubtedly will have a
positive economic impact on the country and will leave society better off. How this will impact the trademark
holders in Mauritius is an important question, as well as how negative effects can be mitigated.
Balancing the two perspectives
From the perspectives of the 92 representative stakeholders in this study, the government of Mauritius is
faced with a policy decision which, if implemented cautiously and with sensitivity to each affected sector,
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could have the medium-term outcome of increased economic competitiveness, lower inflation and growth
of the domestic productive sector. The role of government, according to consumer protection advocates, is
two-fold: to ensure economic growth of the economy, and to protect the welfare of its citizens. National
exhaustion of trademarks provides the regime where these two directives are not in conflict. Arguably, for
non-trademarked goods a parallel importation regime already exists – notably there are choices of
supermarkets2 with variously priced goods targeting different income groups.
Against these potential positive socio-economic impacts, the government must weigh, according to the
trademark holders interviewed during the study inter alia the possibility of lowering quality, loss of after-
sales service commitments and inflow of imitation products of imports – for those products where the
current (440 or so) trademarks occur. In addition, trademark holders fear the erosion of their investment
over years in these products.
How the government of Mauritius proceeds will have far-reaching consequences for the economy, but also
for the reputation of Mauritius – as the African country leading on numerous competitiveness indicators, but
recently grappling with challenges including depreciation of its currency, a high trade deficit, and a notable
shortage of skills to drive new economic opportunities.
The implementation of an international exhaustion regime for trademarks raises concerns about potential
trade dumping, market gluts, and other anti-competitive practices. With the removal of restrictions on
parallel imports, there is a risk that imports might flood the market, leading to price wars and decreased
competition. This could harm local businesses and create an uncompetitive environment which reduces
profitability. In addition, the increased availability of parallel-imported goods may exacerbate issues related
to counterfeit products. Importers may become reluctant to engage in the trade due to the challenges posed
by counterfeit goods, such as reputation damage.
On the other hand, Mauritius’ trade policy approach is based on trade openness and active engagement at
multilateral and bilateral levels. The current policy stance focuses upon the diversification of its markets, with
a growing focus on regional African markets, and product diversification. Therefore, the move to the
international exhaustion regime for trademarks can also represent trade openness and the removal of non-
tariff barriers to trade (NTBs) between countries. It also aligns with the regimes of Mauritius’ major trading
partners and objectives of regional and bilateral trade agreements such as the AfCFTA, China-Mauritius FTA,
SADC-FTA and India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA).
2 Including Super U; Intermart; Winners; DreamPrice; Lolo; SaveMart.

1. Chapter 1: Introduction
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1.1 Introduction
This study examines the likely socio-economic implications of the Government of Mauritius adopting an
international exhaustion regime for trademarks – moving from the country’s current national exhaustion
system. The study, commissioned by the Commonwealth Secretariat and undertaken by Tutwa Consulting
Group, ran over the period from August 2023 to the end of November 2023. In total, 92 people were
interviewed by the team. The stakeholders interviewed represented the three major actor groups affected by
the study – the Mauritian government, the private sector, and consumer representatives. Concurrently, an
economic analysis was undertaken, which aimed to model the impact of the adoption of the international
exhaustion regime for trademarks. As with the earlier studies, attempting to model the same (or similar)
impacts, in different jurisdictions, data on parallel importation and its impacts was severely limited.3 This is
discussed in Chapter 4.
1.2 Definition of trademarks

Trademarks are symbols “capable of distinguishing the goods or services of one enterprise from those of
other enterprises”.4 They help customers recognize a business as the originator of a particular product or
service. Trademarks serve as the foundation for building a company's brand and reputation. They foster a
sense of trust with customers, facilitating the development of a devoted clientele and bolstering the
company's image. Furthermore, trademarks play a crucial role in influencing consumer choices. They grab the
attention of consumers and make products stand out in a crowded marketplace. Moreover, trademarks are
instrumental in preventing consumer confusion by clearly indicating the origin of products and ensuring a
consistent level of quality.
Under the current Mauritian national exhaustion regime, trademark rights are exhausted only within the
borders of the country where the trademark was first applied for or registered. This means that the local
trademark holder can control the distribution and resale of their products within that specific country.5 This
control extends to preventing imports of trademarked products by those that do not hold exclusive rights. In
addition, it allows trademark holders to take legal action against unauthorized imports and sales of “their”
products within Mauritius. The monopoly-creating nature of national exhaustion implies that significantly
higher prices can be charged for products that would be more affordable if a greater degree of competition
was allowed.
Adopting international exhaustion means that once a trademark owner sells their products anywhere in the
world, their exclusive rights to control the resale of those products are exhausted. This allows for parallel
imports, where trademarked products can be imported from one market to another without the trademark
holders consent. Economic theory suggests that the increase in suppliers through international exhaustion
3 This has been noted in most of the literature consulted, including: 1994, David A. Malueg, Marius Schwartz, Parallel imports, demand dispersion,
and international price discrimination, Journal of International Economics 37 (1994) 167-195; Thomas Cottier and Marina Foltea (2011). Global
governance in intellectual property: does the decision-making forum matter? Swiss National Centre of Competence in Research, Working Paper No.
2011/145; Keith E. Maskus, Economic perspectives on exhaustion and parallel imports in Research handbook on intellectual property exhaustion
and parallel imports. Calboli, Irene., Lee, Edward. Editors (2016)
4 World Intellectual Property Organisation. What are trademarks?
https://www.wipo.int/trademarks/en/#:~:text=A%20trademark%20is%20a%20sign,protected%20by%20intellectual%20property%20rights.
5 World Intellectual Property Organisation. (29-31 March 2011). Regional Seminar on the Effective Implementation and Use of Several Patent-
Related Flexibilities, Topic 14: Exhaustion of Rights,

https://www.wipo.int/edocs/mdocs/patent_policy/en/wipo_ip_bkk_11/wipo_ip_bkk_11_ref_topic14.pdf.
would drive down the price of trademarked products, enhancing their affordability and stimulating overall
economic activity.
The divergence in the implications of each regime further implies that national exhaustion tends to favour Page | 15
producers while international exhaustion favours the consumer.6 This section of the report provides a
background and context into the undertaking of this assignment and outlines each of its subsequent sections.
1.3 Background
Between 2016 and 2017, discussions on the draft Industrial Property Bill in Mauritius centred around
implementing international trademark exhaustion. Apart from the clear alignment towards international
trade that Mauritius has embraced, the advent of a regime of international exhaustion of trademarks implies
more market competition and associated reduced prices.
Via the Consultants’ comprehensive interview process at the stakeholder engagement stage, it was pointed
out that the expected price-reducing effect of increased competition from parallel imports led private sector
trademark holders to oppose international exhaustion. Fears were that international exhaustion could dilute
their intellectual property ownership of branded products in Mauritius, potentially harming their businesses.
Trademark holders have further argued that international trademark exhaustion could have negative
macroeconomic impacts on Mauritius, including trade imbalances, increased unemployment, exchange rate
instability, and decreased investment. Concerns have also been raised about the inability of Mauritian
authorities to enforce regulations on parallel imports, and particularly being able to act against counterfeit
goods.
Given the divergence between the government’s plans and trademark holders’ perspective, the Government
of Mauritius chose to maintain its national trademark exhaustion regime in the 2019 Industrial Property Act,
which came into effect in 2022.7 Issues surrounding trademark exhaustion have been a central topic for more
than a decade in Mauritius due to its significant impact on economic distribution control. The advent of the
COVID-19 pandemic, the conflict in Ukraine, and increased freight costs have led to unprecedented
commodity price hikes, intensifying pressure – from importers without distribution contracts with
international brands – on the government to allow parallel imports.
Thus, to inform the Government of Mauritius’ decision on whether to allow parallel imports or not, this study
assesses what the probable socio-economic impact will be of the adoption of an international trademark
exhaustion regime in Mauritius.8
1.4 The Mauritian context

Before probing the economic impacts of the adoption of international exhaustion for trademarks, it is
important to understand the rationale behind encouraging the introduction of price-lowering competition.
Mauritius is a small island developing state (SIDS) with a liberal trade policy and a history as a net importer.
The country faces several socio-economic structural challenges that can impact its long-term socio-economic
development. These challenges include:
• Limited Resources and Narrow Economic Base: Mauritius has limited natural resources, which makes it
heavily reliant on imports for raw materials and energy. This dependence on external sources can lead
to supply chain vulnerabilities and price fluctuations, affecting the cost of production and
6 Mark Halle. (2007). The Exhaustion of Intellectual Property Rights: Should countries favour consumers or private interests?, International Institute
for Sustainable Development: Commentary, https://www.iisd.org/system/files/publications/com_exhaustion.pdf.
7 It must be noted that Mauritius legislative framework provides for international exhaustion in relation to rights conferred on patents, industrial
designs, geographical indications and layout-design of integrated circuits.

8 The background section of this chapter was adapted from the Terms of Reference (ToR) for this assignment.
competitiveness. The economy is relatively concentrated in a few sectors, primarily textiles and apparel,
sugar, and tourism. Overreliance on these industries can be risky, cascading down to the entire economy.
• Vulnerability to Crises and Shocks: As a small island nation, Mauritius is subject to external economic Page | 16
shocks, such as changes in global commodity prices, natural disasters, and economic downturns in
economies of key trading partners. This vulnerability can disrupt its trade, as seen during the COVID-19
pandemic with value chain disruptions and closures and lockdowns affecting the economy and
exacerbating challenges for stability and growth.
• Environmental Vulnerability: As a SIDS, Mauritius is particularly vulnerable to climate change and sea-
level rise. This poses a threat to its infrastructure, agriculture, and coastal communities, potentially
leading to increased adaptation and mitigation costs. The Mauritius government has put resources
behind land reclamation programmes already, and expenditure on these initiatives are likely to increase.
• Low Manufacturing Base and Skills Gap: Efforts have been made to diversify the economy, however,
there is limited progress in higher value-added industries. Being stuck on low-skilled manufacturing and
traditional agriculture can limit the country's long-term competitiveness. A large proportion of the
Mauritius labour force faces skills gaps that would promote the development of a knowledge-based
economy, especially in new technologies and international finance. Mauritius’ low manufacturing base
has hampered its capacity to export goods, leading a trade deficit that has grown over the last two
decades.
• Trade and Investment Agreements: As a small open economy, forging partnerships within regional blocs
provide Mauritius with greater bargaining power vis-à-vis larger, established trading partners. In
addition, the opportunity for greater foreign direct investment – especially for partners to capitalise on
the African Continental Free Trade Area (AfCFTA) – should not be underestimated. Mauritius has also
initiated trade and investment agreements with large economies, like India and China. In addition, it is
a beneficiary of the US African Growth and Opportunities Act (AGOA) as well as the Interim Economic
Partnership Agreement (iEPA) with the European Union.
• Demographic Challenges: Mauritius has attracted foreign retirees with its tax-friendly regime. Benefits
range from no tax on wealth, inheritance, dividends, and capital gains; a progressive tax rate of between
10 to 15 %. Income derived by a retired person or his spouse or common law partner outside of
Mauritius for the previous five years is exempted from income tax. Nonetheless, balancing the needs
of an aging population with the demand for skilled workers is a challenge.
It is essential to recognize that the adoption of international trademark exhaustion can contribute to
addressing these socio-economic challenges in Mauritius. By introducing price-lowering competition through
parallel imports, international exhaustion has strong potential to stimulate the Mauritian economy. This
study looks at whether the negative impact of introducing parallel trademarked imports would cancel the
noted positive effects.
1.5 Scope of the study

This study provides a thorough examination of the socio-economic implications associated with the potential
shift from a national exhaustion regime for trademarks to an international exhaustion regime by the
Government of Mauritius.
Chapter 2 introduces the concept of trademarks and elucidates its role in the economy. This chapter also
highlights key distinctions between national and international exhaustion systems. Subsequently, it delves
into the ongoing debate on parallel imports, emphasizing the arguments for consumer benefits and fair
competition, as well as the concerns voiced by critics. The chapter also scrutinizes trademark regimes in
various countries through case studies, shedding light on the real-world consequences of adopting either a
national or international exhaustion system.
Chapter 3 provides a comprehensive overview of Mauritius' economic, social, legal, and regulatory context. Page | 17
It highlights the potential implications of transitioning to an international exhaustion regime within this
unique national framework.
Chapter 4 moves the study forward by assessing the socio-economic impact of adopting international
exhaustion in Mauritius. This chapter begins by hypothesizing the potential effects of parallel imports on key
economic agents and their subagents. It then outlines the economic model and econometric methodology
used to empirically evaluate the socio-economic consequences of permitting parallel imports. Furthermore,
the chapter conducts industry-specific analyses, with a primary focus on sectors that are likely to be most
affected by the transition to international exhaustion.
Chapter 5 is dedicated to practical recommendations for mitigating sectors and factors influenced by the
transition to international exhaustion. It categorizes sectors that should fully embrace international
exhaustion and identifies sectors that require cautious consideration. For the latter, it offers clear rationale
and proposed mitigating measures.
Chapter 6, as the concluding chapter, distils the key findings of the study into insightful and actionable
recommendations. This study serves as an invaluable resource for policymakers, government officials,
business entities, and various stakeholders in Mauritius, providing a solid foundation for informed decision-
making in the realm of trademark regulation, with a keen focus on optimizing socio-economic outcomes.
1.6 Conclusion
This study focuses on what the socio-economic impact will be on Mauritius if the country shifts from its
national trademark exhaustion system to an international one. Trademarks play a pivotal role in branding
and market dynamics. The current system grants trademark holders’ control over distribution, resulting in
monopolistic pricing. Transitioning to international exhaustion would introduce competition through parallel
imports, potentially lowering prices and benefiting consumers. This shift favours consumers over trademark
holders.
Given Mauritius' economic challenges, including its weak manufacturing capacity, trade deficit and
vulnerability to external shocks, this study underscores the potential benefits and pitfalls of a transition to
international exhaustion in addressing them. It provides recommendations for decision-makers, businesses,
and stakeholders to optimize socio-economic outcomes should there be a decision to move towards
international exhaustion of trademarks. Subsequent chapters delve deeper into these aspects for a
comprehensive understanding of what such a transition will mean for the island state.
2. Chapter Two: Significance of trademark regimes
Page | 18
2.1 Introduction
This chapter explores the significance of trademarks and the difference between national and international
exhaustion regimes. It delves into the ongoing debate on parallel imports, where proponents argue for
consumer benefits and fair competition, while critics raise concerns about the potential erosion of product
quality and the rise of counterfeit goods. The chapter also examines trademark regimes in different countries
through case studies, shedding light on the consequences of adopting national or international exhaustion.
The chapter concludes by highlighting the need for careful consideration in making the choice between these
regimes to align with economic and trade objectives.
2.2 The importance of trademarks and the difference between national and
international exhaustion
“[T]rademarks identify a product with its producer and his or her reputation for quality; trademarks assure
consumers that they are purchasing what they intend to purchase. … it should be noted that trademark
owners typically differentiate their products (for example, through promotional activities) and thus are also
able to create market power.”9
Trademarks are important as they protect businesses' intellectual property and brand identity, and they
benefit consumers by facilitating informed choices and ensuring the quality and consistency of products and
services in the marketplace. They play a vital role in fostering trust, product improvement, and innovation in
the global economy. Figure 1 sets out some of the key benefits of trademarks in the economy.
International exhaustion of trademarks is a legal doctrine that allows for the sale and distribution of
trademarked goods in a particular country without the consent of the trademark holder, as long as those
goods have been legitimately placed on the market in another country by the trademark owner or with their
consent. In other words, once trademarked goods are sold in one country by the trademark owner or with
their permission, they can be freely imported (otherwise known as parallel imports) and sold in another
country without infringing on the trademark holders’ rights.
In contrast, national exhaustion is the doctrine that restricts the sale and distribution of trademarked goods
to only those authorized by the trademark owner within a specific country. Under national exhaustion,
parallel imports (importing and selling trademarked goods without the holder's consent) within that country
can be a trademark infringement where the trademark holder is entitled to legal action. In essence,
trademark holders have complete control over the distribution of their products in a country that follows
national exhaustion rules.
9 Intellectual property and development: lessons from recent economic research / edited by Carsten Fink, Keith E. Maskus.
Figure 1. The Role of Trademarks in the Economy
Page | 19
Source: Authors’ Compilation from:

1. Susanna H.S. LEONG, 2013. “Making a Mark” – The Importance of Trademarks in Establishing a Distinct Identity
in the Market Place Training of the Trainers Program on Effective Intellectual Property Asset Management by
Small and Medium Sized Enterprises (SMEs). WIPO and IPOM, Mongolia, Ulaanbaatar, October 8 to 10, 2013.
2. Deborah Sweeney, 2020. Why Trademarks Are So Valuable for Your Small Business. September 23, 2020.
Forbes Small Business Strategy.
3. Patricio Sáiz and Rafael Castro (2018) Trademarks in branding: Legal issues and commercial practices, Business
History, 60:8, 1105-1126, DOI: 10.1080/00076791.2018.1497765
Mauritius operates under a national exhaustion regime for trademarks. Adopting international exhaustion
would allow for parallel importation, where trademarked products can be imported and resold in Mauritius
without the trademark holder’s permission, or even prior knowledge. The expected result, as has been the
case in other jurisdictions, would be greater competition for current trademark holders, also resulting in
lower prices for consumers. The overall effect on the Mauritian economy can, at this stage, only be calculated
based on accessible data.
2.3 Arguments for and against parallel imports
In the ongoing debate surrounding parallel imports, both proponents and opponents present compelling
arguments, each with their unique perspective on the practice. Page | 20
Supporters of parallel imports argue that they can significantly benefit consumers and promote fair
competition in the market. On the other hand, critics raise concerns about the potential downside challenges
associated with parallel imports. This section explores these arguments, shedding light on the complexities
and implications of this contentious issue. It draws on literature and stakeholder consultations.10
2.3.1 Arguments against parallel imports

• Parallel imports interfere with exclusive distribution contracts.
• Parallel resellers indirectly (and improperly) take advantage of the advertising, marketing, and other
expenses incurred by authorized sellers (also known as free riding). A parallel importer does not incur
the same expenses as those subject to an official distribution and sales network because they do not
deal with issues such as supply, services, quality control, and warehouse facilities.
• The entry of parallel imports has repercussions on competition within a single brand. This is because the
entry of parallel imports creates direct competition for the so-called official distribution network, leading
to competition outside the control of the brand owner.
• When consumers purchase imported products in parallel, they may be acquiring merchandise that
appears to be original and genuine but could have hidden defects that cannot be properly replaced
because they are not covered by the corresponding warranties, and the consumer may not be aware of
this situation when purchasing the product from a parallel importer. Importers may become reluctant
to engage in the trade due to the challenges posed by counterfeit goods, such as reputational damage.
• The handling of certain products in terms of packaging, storage conditions, and other aspects can only
be adequately addressed by those affiliated with the brand owner and not by parallel importers.
• With the removal of restrictions on parallel imports, the market could be flooded with excess goods,
resulting in price wars. This scenario poses a threat to local businesses’ profitability and creates an
environment of anticompetitive market practices.
2.3.2 Arguments in favour of parallel imports

• The entry of a parallel importer increases the number of suppliers of a product, which is likely to induce
price competition in the domestic market. The reduction in prices means people have more disposable
income and can purchase more goods and services than before the entry of parallel imports. This results
in economy-wide benefits.
• Parallel imports prevent multinational corporations from applying price discrimination and
differentiation policies.
• The entry of parallel imports is beneficial for the free-market system as it promotes more efficient
resource allocation.
• It is indicative of the state’s respect for consumers’ freedom to choose among different products and
alternative providers.
• Parallel imports prevent the proliferation of monopolistic markets, and hence avoid price gouging.
• Parallel imports incentivise the development of a robust national quality infrastructure to facilitate
quality standardisation where the Mauritius Standards Bureau will have an integral role to play.
• International exhaustion regime for trademarks can also represent the removal of non-tariff barriers to
trade (NTBs) between countries and aligns with the regimes of Mauritius’ major trading partners such as
India and China who already have the same regime.
10
Gonzalo Ferrero Diez Canseco. (2000). IMPORTACIONES PARALELAS Y AGOTAMIENTO DE DERECHOS DE PROPIEDAD INTELECTUAL,
https://dialnet.unirioja.es/descarga/articulo/5109665.pdf.
Moving to international exhaustion offers benefits like greater access, more choices and lower prices but
brings challenges, including possible proliferation of competition, higher search costs for consumers, reduced
access to (after-care) services, and potential innovation disincentives for rights holders. Regulators may also
face added costs in verifying quality and safety standards for parallel imports. Page | 21
All these factors warrant careful consideration.
2.4 Trademark regimes elsewhere in the world and their implications

Data-driven research and assessments are relatively limited under the topic of trademark exhaustion
regimes. Most national studies focus on the pharmaceutical industry and consider the consumer pricing/
aggregate savings perspective. Case studies from different jurisdictions considering the implications of the
national and international regimes are discussed in this section.
Figure 2. Trademark regimes around the world
Source: Consultants’ computation using data from the Gowling WLG Law Firm website, 11 AfCFTA agreement,12 EEA
Agreement,13 and various other specific country data, map generated by MapChart.net.
The map above showcases the countries in which international exhaustion of trademark regime are fully
being implemented, implemented with some exceptions, implemented only at regional level, and moving
towards regional exhaustion such as in the case of the AfCFTA.
11 Gowling WLG Law Firm Website, Exploring IP Exhaustion Internationally, available at: https://gowling-wlg.shorthandstories.com/exploring-
exhaustion-internationally/index.html.
12
African Union. Agreement Establishing the African Continental Free Trade Area. March 21, 2018.
13 European Economic Area Agreement
2.4.1 Case studies of countries implementing exhaustion of trademark regime
New Zealand
Page | 22
New Zealand Current Trademark Regime: International Exhaustion
Allows for parallel imports since 1998
Motivation In early 1998, New Zealand Institute for Economic Research (NZIER) observed that products were
for the 35% more expensive in New Zealand in comparison to the price in the USA.a This prompted the New
regime shift Zealand Government to allow for parallel imports.
Trade before Using NZ Stat, the increase in import and export value can be observed to increase exponentially
and after from 2000 to 2022. Unfortunately, trade data prior to 2000 could not be retrieved.
New Zealand: Value (NZ$) of Export and Import, and

Trade Balance
80
60
Billions (NZ$)
40
20
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
-20
Export Import Trade Balance
GDP and Using the World Bank database, New Zealand's GDP, and GDP per capita from 1990 to 2021 are
GDP per shown below. Both indicators can be observed to increase exponentially after the legalisation of
Capita parallel imports, except for a slight dip between 2000 and 2002.
New Zealand: GDP (current US$)

300
250
200
Billions
150
100
50
GDP (current US$)

New Zealand: GDP per capita (current US$)
60
50 Page | 23
40
Thousands 30
20
10
0
1998
1990
1992
1994
1996
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
GDP per capita (current US$)
Costs and Authorised distributors argued that restrictions on parallel imports encourages local manufacturers
Benefits through the absence of price competition. However, advocates of parallel importing emphasised
that the claims of positive overall economic welfare effects counterbalance the job losses.b
Highlights In 2004, NECG investigated the price gap between New Zealand and USA and found that the price
from the gap dropped to around 20%. In 2012, Deloitte Access Economics was commissioned by the New
shift Zealand Ministry of Economic Development to investigate the cost and benefits of the introduction
of parallel import. Their results remained consistent with the previous reports mentioned,
suggesting that the benefits of the removal of parallel import restrictions outweighed the costs. The
costs being a few consequences in terms of competition for domestic manufacturers.
Lessons for The introduction of the international exhaustion of trademark through the legalisation of parallel
Mauritius import has allowed a significant decrease in consumer prices, and its overall economic welfare could
be consistently observed since 1998. Consumer protection is further guaranteed with the Consumer
Guarantee Actc to ensure that genuine products are entering the country and an acceptable quality,
and the Fair Trading Actd which fights against misleading information and deception.
Trading Top 5 Export and Import Partners (2023): China, Australia, United States, Japan, and Republic of
Partners Korea.e
a
Sources NZIER (1998), Parallel Importing: A Theoretical and Empirical Investigation
b
Matthew J Coull (1999). New Zealand's approach to parallel imported goods and the copyright
amendment act 1998. Victoria University of Wellington Law Review, Vol. 29, No. 1. Published:
1999-01-01.
c
Consumer Guarantee Act (1993;2017), Accessed at:
https://www.legislation.govt.nz/act/public/1993/0091/24.0/DLM311053.html
d
Fair Trading Act (1986; 2023), Accessed at:
https://www.legislation.govt.nz/act/public/1986/0121/latest/DLM96439.html
e
World Integrated Trade Solution (WITS) Database, Country Snapshot. Accessed at:
https://wits.worldbank.org/countrysnapshot/en/NZL
Trinidad and Tobago
Trinidad and Current Trademark Regime: International Exhaustion

Tobago Allows for parallel imports since 2015 Page | 24
Motivation Trinidad and Tobago's TradeMark Law (reference) is one of the most modern Intellectual
for the Property laws in line with the Madrid System for the International Registration of Marks and the
regime shift Patent Cooperation Treaty.
Trade before Using Trade Map database, Trinidad and Tobago can be observed to have an overall positive
and after trade balance consistently from 2002 to 2021, except for the year 2016. It is important to note
that, although Trinidad and Tobago is small in size from a global perspective, it is one of the
largest countries in the Caribbeans, is a major oil and gas producer and has one of the major
hubs for shipments of goods in the region. This also explain its ability to consistently have a
positive trade balance, and possibly its decreasing dependency on importation.
Trinidad and Tobago: Import Quantity & Value, and Trade Balance
(2003 - 2022)
14
12
10
8
Millions
0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
-2
Quantity (Tons) Value (thousand USD) Trade Balance (value)

GDP and Although Trinidad and Tobago experienced economic shocks around 2008 financial crisis, it has
GDP per been able to recover quite rapidly. The country’s economic resilience can be seen throughout
Capita the graph.
Trinidad and Tobago: GDP (2000-2022) Page | 25
35
30
25
Billions
20
15
10
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
GDP (current US$)
Trinidad and Tobago: GDP per capita (2000-2022)

25
20
Thousands
15
10
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Highlights Trinidad and Tobago has adopted the international exhaustion of trademark regime which
from the allows the parallel import of trademarked goods. To mitigate any possible importation of
shift counterfeit goods with the facility of parallel import, the country established a Multi-Agency
Task Force and Anti-Illicit Task Force through its implementation of their new Trademarks laws.
Their roles are to take actions against counterfeit goods with seizures made at Customs and
work in collaboration with the Trinidad and Tobago Manufacturers Association. Although this
system is considered “strong and efficient”, it is also under-utilised. This indicates the potential
of the country to protect its businesses and foster economic growth even more, given that they
are willing to invest more efforts in the implementation of IP system.f
Lessons for The developments made towards the enforcement of IP rights in Trinidad and Tobago can be
Mauritius used as a worthwhile example, especially as a Small Island Developing State similar to Mauritius.
Trading Trinidad and Tobago's top 5 Export and Import partners: United States, Guyana, Mexico, France,
partners and Belgium.g
f
Sources Kluwer Trademark Blog, available at: https://trademarkblog.kluweriplaw.com/2023/08/11/ip-
rights-in-trinidad-and-tobago-remain-a-best-kept-secret/
g
https://wits.worldbank.org/countrysnapshot/en/TTO
Denmark
Denmark Trademark Regime: International Exhaustion on Pharmaceuticals Page | 26

Allows for parallel imports since 2021 on pharmaceuticals from EU/EEA countries
Motivation The rising price of pharmaceuticals became a pressing matter to tackle.
for the
regime shift
Trade before Using Trade Map database, Denmark can be observed to having a positive trade balance and an
and after increasing value of imports. Unfortunately, the quantity of imports could not be retrieved from the
database. As the shift to parallel import is fairly new, this graph may not help us understand its
effects on import and trade balance.
Denmark: Import Value & Trade Balance (2003-2022)

140
120
100
80
Millions
60
40
20
0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Trade Balance Value (thousand USD)
GDP and Unfortunately, looking at the graphs below will not be able to indicate much about the economic
GDP per effect parallel imports of pharmaceuticals may have due to its fairly recent implementation in 2021.
Capita
Denmark: GDP (current US$)
500
400
Billions
300
200
100
0
2010 2012 2014 2016 2018 2020 2022
GDP (current US$)

Denmark: GDP per capita (current US$)
80
Page | 27
60
Thousands
40
20
0
2010 2012 2014 2016 2018 2020 2022
Highlights The adoption of international exhaustion regime on pharmaceuticals in Denmark in 2021 has
from the resulted in significant reduction in the cost of pharmaceuticals. An overall savings of approximately
shift 106 million USD was observed in 2021 from parallel imports. It was noted that parallel imports led
to both direct and indirect savings at the pharmacies and hospitals, and therefore for the end-users.
Parallel importers have a 16% market share in Denmark, of which 30% market share is in the primary
care sector (such as pharmacies) and 9% market share is in the hospital sector. It was calculated that
parallel-imported pharmaceuticals were on average 16% cheaper than the original/innovative
(branded) medications. As a result, Danish taxpayers benefitted from the savings made through
parallel imports of pharmaceuticals, and patients directly be from their hospital bills. h
Lessons for In this regard, moving towards the international exhaustion of trademarks could potentially be
Mauritius beneficial to Mauritius in combating the noticeable rising prices of medications, and benefit not only
the pharmacies and hospitals, but also the consumers.
Trading Denmark's top 5 Export and Import partners: Special categories, Germany, Sweden, Norway, and
partners United Kingdom.i
h
Sources Copenhagen Economics. The economic impact of parallel imports of pharmaceuticals: an
assessment of savings in Denmark in 2021.
I
https://wits.worldbank.org/countrysnapshot/DNK
Serbia
Serbia Current Trademark Regime: Regional Exhaustion

National exhaustion: 2013 - 2020; Regional Exhaustion: 2020 – onwards Page | 28
Motivation The shift to national exhaustion of trademarks was made under unclear circumstances.
for the
regime shift
Trade before Using Trade Map, the increase in import value can be observed to increase exponentially from 2009
and after to 2022. Unfortunately, trade data for quantity imported is incomplete. It can be observed that
Serbia is highly dependent on imports. It's trade balance remain negative, and the regional
exhaustion regime established in 2020 resulted in an influx in imported goods onwards in the
country.
Serbia: Import Quantity and Value (2006 - 2022)
45
40
35
Millions
30
25
20
15
10
5
0
2006 2008 2010 2012 2014 2016 2018 2020 2022
Import Quantity (Tons) Import Value (thousand USD)
Serbia: Trade Balance (2006 - 2022)

0
2006 2008 2010 2012 2014 2016 2018 2020 2022
-2
-4
-6
Millions
-8
-10
-12
-14
Trade Balance
GDP and Using the World Bank database, Serbia's GDP and GDP per capita from 2003 to 2022 are shown
GDP per below. Both indicators can be observed to increase, even after a few shocks in 2008, 2012, and 2015.
Capita Although the two indicators were at their highest after 2020, the implementation of regional
exhaustion, the new regime is still fairly recent and its economic effects cannot be conclusive yet.
Page | 29
Serbia: GDP (2003 - 2022)

70
60
50
Billions
40
30
20
10
0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
GDP (current US$)
Serbia: GDP per capita (2003 - 2022)

10
9
8
7
Thousands
6
5
4
3
2
1
0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Highlights The transition from international to national exhaustion of trademark rights in Serbia was not well
from the planned and implemented, which has resulted in concerns regarding competition policy. The
shift national exhaustion of trademark rights regime acted as a barrier to the entry of genuine products
at lower prices in the local market, which negatively affects competition and free movement of
goods.j Adopting this regime marked the history of trademark protection in Serbia negatively.
Lessons for Serbia's period of national exhaustion of trademark regime has the potential to serve as a lesson for
Mauritius countries with similar economies that largely reply on imports, such as Mauritius.
Trading A member of Open Balkan Initiative.
partners Serbia's top 5 Export and Import partners: Germany, Italy, Bosnia and Herzegovina, Romania, and
Hungary.k
j
Sources Novak Vujičić (2019). Introduction of the Regime of National Exhaustion of Trademark Rights in
Serbia: Emerging Competition Policy Concern
k
https://wits.worldbank.org/countrysnapshot/SER
2.5 Conclusion
This chapter has considered the fundamental importance of trademarks in protecting intellectual property
and fostering trust, competition, and innovation in the global economy. It has explored the distinctions Page | 30
between national and international exhaustion regimes and their implications for Mauritius and other
jurisdictions.
The choice between national and international exhaustion involves nuanced reflection, with each regime
offering distinct advantages and disadvantages. National exhaustion provides trademark owners with greater
control over their product distribution and helps maintain exclusivity and brand image, but it can also lead
to higher prices and reduced competition, potentially impacting consumers and businesses that resell
trademarked products negatively. On the other hand, international exhaustion can increase consumer
choice, lower prices, and stimulate competition. However, it may also introduce challenges such as quality
erosion, increased search costs for consumers and potential reductions in innovation and investment by
rights holders.
The adoption of one regime as opposed to another in Mauritius would have significant consequences for the
local market. Ultimately, the choice of exhaustion regime will determine how trademarked goods are
distributed and resold within the country, and what the economic implications are. Further research and
analyses are essential in making an informed decision that aligns with Mauritius’ socio-economic and trade
priorities and objectives and this is only possible if more data is available. However, it is undeniable that there
seem to be a pronounced tendency for a worldwide shift towards regional and/or international exhaustion
of trademarks. The Consultant assessments from intensive research and analysis are presented in the
subsequent chapters of this report.
3. Chapter Three: The Mauritian economic landscape
Page | 31
and the implications of international exhaustion
This chapter provides an overview of the economic, social, legal, and regulatory context of the Republic of
Mauritius, focusing on the potential implications of transitioning to the international exhaustion of
trademarks.
3.1 Historical overview and political economy of Mauritius

The Republic of Mauritius is a group of islands in the south-west of the Indian Ocean. The country consists of
the main island of Mauritius, Rodrigues, and several outer islands. Mauritius has been a colony of multiple
European countries but became independent in 1968. It acceded to the status of Republic within the
Commonwealth in 1992. The official language is English, with French being widely spoken.
Mauritius is home to around 1.2 million people and the population has remained within the 1.2 million range
since the early 2000s. The country is racially diverse, with its population comprising of Indo- and Sino-
Mauritians and people of European and African origin. The country has an estimated area of 1 979 km2, with
a population density of 638 persons per km2.14
Mauritius is among the oldest democracies in Africa, with 12 “free and fair” elections held over the past six
decades.15 In 2023, the Heritage Foundation ranked Mauritius as the 26th freest economy in the world, and
most free in Sub-Saharan Africa (SSA). Among the drivers of Mauritius’ economic freedom ranking are the
country’s structural reforms aimed at global integration, a transparent legal framework, efficient regulatory
environment, and its open market policies.16
The expectation, should the adoption of international exhaustion for trademarks in Mauritius occur, is that
this happens within the current stable political environment, which values economic freedom and openness.
This is likely to facilitate the integration of international trademark practices and potentially yield positive
socio-economic outcomes. The combination of a democratic tradition and economic freedom underscores
the potential for Mauritius to benefit from the international exhaustion of trademarks.
3.2 The Mauritian economic context

Mauritius is a SIDS and upper-middle-income economy – after sliding down from high-income status during
the COVID-19 pandemic.17 Despite the country’s size, the Mauritian economy is resilient. As shown in Figure
3, apart from a few expected economic dips over a long-term horizon, Gross Domestic Product (GDP) has
grown notably over the last two decades.
14 Government of Mauritius, Ministry of Finance, Economic Planning and Development: Statistics Mauritius. (2023). Mauritius in Figures.
15 The World Bank Group. (2023). The World Bank in Mauritius, https://www.worldbank.org/en/country/mauritius/overview#1.
16
Heritage Foundation. (2023). 2023 Index of Economic Freedom: Mauritius, https://www.heritage.org/index/country/mauritius.
17 Op. Cit¸ The World Bank in Mauritius.
Figure 3. Gross Domestic Product, 2006-2022
700
600 Page | 32
Billions of Mauritian Rupees
500
400
300
200
100
0
2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: Consultants’ computation using data from Statistics Mauritius National Accounts 2006-2023.
The Mauritian economy is driven by the services sector, including tourism and financial services, which
accounts for around 67% of GDP. The industrial sector accounts for 18% of GDP, while the agricultural sector
contributes around 3%.18 Although efforts have been made to diversify the economy, there is limited
progress in higher value-added industries. Industry remains relatively concentrated to, primarily, textiles and
apparel, and sugar-related processing. Being stuck on low-skilled manufacturing and traditional agriculture
can limit the country's long-term competitiveness.
Among the reasons for constrained industrial development in Mauritius is because a large proportion of the
labour force faces skills gaps that would otherwise promote the development of a knowledge-based
economy. Another reason for Mauritius’ constrained primary and secondary industries is its limited natural
resources, which makes it heavily reliant on imports of raw materials and energy. This dependence on
external sources can lead to supply chain vulnerabilities and price fluctuations, also affecting production and
competitiveness.
In light of these economic dynamics, the adoption of international exhaustion of trademarks in Mauritius
could play a crucial role in addressing some of these challenges. Specifically, by allowing parallel imports, the
country could potentially diversify its product offerings and sources, mitigating the risks associated with
overreliance on a few key industries. This could stimulate competition and innovation, creating opportunities
for higher value-added sectors and, in turn, reducing the skills gap by promoting the development of a
knowledge-based economy. Moreover, parallel imports might provide access to a wider range of affordable
goods, helping to stabilize prices and enhance the country's overall competitiveness and consumer welfare.
While parallel imports have the potential to diversify the country's product offerings and sources, mitigating
the risks associated with overreliance on a few key sectors, it also carries challenges. The introduction of
parallel imports can disrupt traditional industry structures, potentially creating tensions with established
businesses and trademark holders. There may be concerns of market saturation, increased competition, the
risk of trademark infringement, and the complexity of enforcing trademark rights.
These nuanced economic dynamics underscore the importance of carefully balancing the benefits and
challenges of adopting international exhaustion in Mauritius. It offers the prospect of stimulating
competition, fostering innovation, and creating opportunities for higher value-added industries while
addressing the persistent skills gap through the development of a knowledge-based economy. Additionally,
18 Mauritius Trade Easy. Mauritius: Economic Outline, https://www.mauritiustrade.mu/en/trading-with-mauritius/mauritius-economics-outline.

parallel imports could widen access to a broader range of affordable branded goods and components of
branded goods, contributing to price stability, potential value chain development and improvement of the
country's overall competitiveness. However, a well-considered strategy is necessary to manage the potential
disruptions and ensure a smooth transition toward international exhaustion. Page | 33
3.3 International trade

As shown in Figure 4, Mauritius is a net importer of goods and net exporter of services. Contributing to the
trade in goods deficit is Mauritius’ weak manufacturing base and remarkably accessible market.19 While it
could be argued that increased parallel imports would worsen this deficit, the fact that prices will likely drop
– stimulating economic activity and potentially growing exports– implies the impact on the trade balance
must be determined empirically.
Figure 4. Exports vs. Imports: Goods and services, 2006 – 2022

300
Billions of Mauritian Rupees
250
200
150
100
50
0
2006 2008 2010 2012 2014 2016 2018 2020 2022
Export of Goods Export of Services

Import of Goods Import of Services
Notwithstanding the impact on the trade balance, importers stand to gain from the ability to parallel import,
as they would have access to a broader variety of goods. Likewise, Manufacturers importing intermediate
products that are trademarked may benefit from access to cheaper inputs. Similarly, potential exporters,
particularly those considering entering the export of trademarked products industry, would benefit from the
change due to the lower cost of inventories.
On the other hand, however, manufacturers and/or exporters of trademarked products may be adversely
affected, due to increased competition. While the overall market supply may remain unaffected in the short
run, it remains to be seen how well the economy adjusts to potentially major changes.
While there is no definitive impact that would accrue to the country’s trade balance, the move to
international exhaustion for trademarks would align Mauritius with global trade norms, and some of its key
trading partners. Forging partnerships within regional blocs provide Mauritius with greater bargaining power
vis-à-vis larger, established trading partners. A transition from national to international exhaustion of
trademarks in Mauritius has significant implications for the country, considering its status as a small open
economy actively engaging in regional and international trade agreements.
19
Data from the World Trade Organisation shows an average Mauritian Most-Favoured-Nation (MFN) tariff rate of 0.8% in 2022 - falling from 3.5% in
2006.
Below is a list of international agreements to which Mauritius is a party:
• Mauritius is a member of the Common Market for East and Southern Africa (COMESA) and the Southern
African Development Community (SADC), which comprises 16 Member States (some of which overlap
with COMESA Membership). Page | 34
• On 22nd February 2021, Mauritius signed a Comprehensive Economic Cooperation and Partnership
Agreement (CECPA) with India.
• Having signed and ratified the AfCFTA, Mauritius joined the AfCFTA Guided Trade Initiative on 7 October
2022. The AfCFTA Secretariat launched this initiative in Accra to facilitate commercially meaningful trade
for eight participating countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and
Tunisia. Under the AfCFTA, the Intellectual Property Protocol is moving towards regional exhaustion of
IP, and ratifying countries will need to adopt this level to trade under the agreement.
• The Mauritius-China Free Trade Agreement was signed in October 2019 and entered into force on 1
January 2021. It is China's first FTA with an African country.
• The Interim EPA (iEPA) is being concluded with the EU, including Mauritius, Comoros, Madagascar,
Seychelles, and Zimbabwe.
• Mauritius is party to the AGOA Agreement, which is currently being considered by the Biden
Administration for renewal in 2025, with a potential for enlargement of benefits vis-à-vis the AfCFTA.
The adoption of international exhaustion of trademarks signifies a willingness to cooperate and harmonize
rules across participating countries. This harmonization aims to create a common framework for trademark
protection, reducing discrepancies and facilitating business operations across various jurisdictions. It
streamlines cross-border trade, enhances international collaboration, and fosters improved trade relations,
economic integration, and partnerships among nations involved in these agreements. This is particularly
important when considering that some of Mauritius’ key trading partners operate with an international
exhaustion regime for trademarks, and that the AfCFTA’s Protocol on Intellectual Property calls for regional
exhaustion.
However, it also raises potential concerns, such as a loss of control for trademark holders, increased
competition, the risk of trademark infringement, challenges in maintaining compatibility with other
countries, and enforcement complexities. Mauritius must carefully balance these challenges if it is to
effectively implement a change in trademark regime (to regional or international exhaustion) while reaping
the benefits of such a change.
3.4 The Mauritian socio-economic context

GDP per capita has grown consistently in Mauritius – reflecting year-on-year improvements in the standard
of living. Adopting an international exhaustion regime for trademarks could further improve living standards
(through increased sense of wellbeing) through price-reducing competition. On the flip side of the coin, living
standards could be adversely affected if parallel imports crowd-out domestic economic activity, such as
manufacturing.
Figure 5. GDP per capita, 2006-2022
500
450
Page | 35
Thousands of Mauritian Rupees
400
350
300
250
200
150
100
50
0
2006 2008 2010 2012 2014 2016 2018 2020 2022
3.4.1 Literacy rate

The adult literacy rate of Mauritians (10 years and above) was 91.9% in 2022, which represents a high rate
of people who can both read, write, and understand short simple statements about their everyday life.20 This
level of education is generally conducive to understanding trademarks, the implications of parallel imports,
and making informed choices.
3.4.2 Age of population

Population growth in Mauritius has been slowing since the start of the century. As per the 2022 Census
results, the Mauritian population is 1.23 million (down 1 830 people from the 2011 Census), with population
growth having slowed significantly since 2000. Slow or decreasing population growth rates impact the age of
a country’s population – as reflected in the case of Mauritius. The country’s median age rose in the last
decade, from 34 years old in 2011 to 38 years in 2022.21
Older populations might have different consumption patterns and preferences, and they may be affected by
changes in the availability and pricing of trademarked goods through parallel imports. As older generations
tend to be more brand loyal, it is likely that most of the Mauritian population would experience wellbeing
benefits from increased access to established brands.22
3.4.3 Gini coefficient

The Gini Coefficient of Mauritius is 0.400, indicating a moderate degree of inequality. The Gini Coefficient is
a measure of a country’s inequality of income distribution. The index is calculated on a scale of 0 to 1, with 0
implying perfect equality and 1 implying perfect inequality. 23 Parallel imports might lead to more affordable
access to trademarked goods, benefiting consumers and potentially reducing the likelihood for resentment
between the haves and the have nots. However, it could also have complex effects on local industries and
businesses, potentially affecting income distribution.
20 Government of Mauritius, Ministry of Finance, Economic Planning and Development, Statistics Mauritius, Economic and Social Indicators: 2022
Population Census – Main Results.
21 Ibid.
22 Claire Tassin. (16 February 2023). Gen Z Shopping Habits: Why They Love New Brands, Morning Consult Pro,
https://pro.morningconsult.com/analysis/gen-z-shoppers-love-new-brands.
23Op. Cit. Mauritius in Figures. The value presented is as per the 2017 Household Budget Survey.
The adoption of an international exhaustion regime for trademarks in Mauritius, allowing parallel imports,
should be carefully considered in the context of its economic stability, income inequality, education levels,
and demographics. It is essential to assess the potential benefits and drawbacks for consumers and
businesses, as well as the implications for the overall economy and income distribution. Additionally, factors Page | 36
such as consumer awareness and legal frameworks for trademark protection and enforcement should be
considered when making this decision.
3.5 Public-private partnerships (PPPs) in Mauritius

Government and the private sector in Mauritius share a relatively cordial relationship. There are various
bodies that represent business in the country, and the concerns they raise are considered by government.
Mauritius also has a defined PPP environment, complete with PPP legislation, PPP policy, and a PPP Unit in
the Policy Procurement Office.24
Figure 6. PPP Investment in Mauritius (% of GDP), 2009-2018

0,7
0,6
0,5
Percentage
0,4
0,3
0,2
0,1
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Consultants’ computation using IMF data.
Despite the defined PPP framework in Mauritius, PPP investment has fallen in recent years. Should the
Government of Mauritius go ahead with the adoption of international exhaustion, PPPs (particularly those
with an FDI component) can contribute to the negotiation and implementation of international trade and
investment agreements. These may include intellectual property provisions creating a framework for
international cooperation, and balancing public and private interests – while ensuring efficient, affordable
service provision for citizens.
Effective PPPs can support international exhaustion depending on the specific details of the partnership, the
regulatory environment, and the predisposition of the parties to cooperate on these issues. Additionally,
addressing intellectual property concerns requires a delicate balance between protecting innovation and
ensuring broad access to technology and goods.
24
Axis Consulting, PPP Country Paper: Mauritius. Submitted to SADC-DFRC 3P NETWORK Public-Private Partnership Working Group,
https://www.sadc-dfrc.org/sites/default/files/mauritius_27012014.pdf.
3.6 The Mauritian trademark context
Despite the negative opinion on the economic impact of international exhaustion from stakeholders, it must
be noted that the number of trademarks held in Mauritius constitutes a small fraction of the total number of Page | 37
businesses operating in the country. For example, there are 101,555 legal entities registered in Mauritius,
and only around 440 live trademarks registered at customs.25
Figure 7. Mauritius: Company information and trademarks registered.

.
There are approximately 440 live

trademarks registered with Customs, Out of 101,555
with about 55,000 trademarks legal business
registered at the IP Office. registered (5
2021: 73.3 million trademarks globally November 2023)
Mauritius Chamber
Business Mauritius
of Commerce and
Membership –
Industry – 438
1,290 members
members.
3.6.1 Composition of the private sector

According to the Registry of Companies, on 5 November 2023, 101,555 legal entities were registered in
Mauritius.26 Mauritius Chamber of Commerce and Industry (MCCI) with 438 members and Business Mauritius
with 1,290 members have actively advocated for retaining the status quo – i.e., national exhaustion. A list of
the members who were interviewed and provided their perspectives is included in the annexes. MCCI has
indicated their association partners as: Business Mauritius (Partner Member); Association of Mauritian
Manufacturers (AMM); Overseas and Outsourcing Telecommunication of Mauritius (OTAM); Mauritius IT
Industry Association (MITIA); Mauritius Bankers Association (MBA); Association des Hoteliers et
Restaurateurs de l’Ile Maurice( AHRIM); Association Mauricienne des Femmes Chefs d’Entreprise (AMFCE);
Association Professionnelle des Transitaires (APT); Association Professionnelle des Agents Maritimes
Mauriciens (APAMM); Association of Communication Agencies of Mauritius (ACA); Association of Registered
Private Training Institutions; Chinese Business Chamber; Indian Traders Association; and Mauritius Chamber
of Merchants. Overlap between MCCI and Business Mauritius has not been considered, and members of both
often represent more than one brand – for instance, in the case of shopping malls or retail supermarkets.
The small entrepreneurs and MSME representatives interviewed, as well as the Pharmaceutical Association
of Mauritius (representing approximately 500 pharmacy owners) consider it a clear choice for international
exhaustion. The belief is this would help to settle the rapidly increasing price inflation rate in Mauritius and
would bring relief to MSMEs.
While the research in the study is pertinently focused on the approximately 440 trademarks registered with
the Customs office in Mauritius, the effect of increased competitiveness has benefits to the economy at large
– making it possible for innovative local manufacturers (albeit initially at small scale) to flourish. With the
25 According to the Registrar of Companies (email correspondence 5 November, 2023) and interviews with Customs and the IPO during the Stakeholder
Consultations.
26 Information received from the Registrar of Companies on 5 November 2023.
proper enabling legislative and regulatory framework, with a continued focus on maintenance of quality –
and while accommodating the current brand representatives to make necessary shifts in their business
strategies – the adoption of international trademark exhaustion could be of great benefit to many Mauritian-
grown businesses. This can contribute to addressing the socio-economic challenges in Mauritius. Page | 38
3.7 The Mauritian legal and regulatory context

3.7.1 Overarching policy, regulatory and institutional framework
There is no formal trade policy document in Mauritius, therefore, the overall trade policies are governed by
the national economic strategy reflected in the Three-Year Strategic Plan 2018/2019-2021/22.27 The Strategic
Plans provide the road map to drive Mauritius’ socio-economic transformation, with the aim of sustaining
the country’s high-income economy status, become an inclusive society with a high quality of life and
sustainability, as stated in the country’s Vision 2030. The country’s trade policy is closely aligned to the two
Pillars: “Strong economy” and “A fully open country”.28 These in turn are welcoming to the international
exhaustion regime which is beneficial for the free-market system as it promotes more efficient resource
allocation.
Figure 8. Five Pillars of Vision 2030
The National Productivity and Competitiveness Council’s (NPCC) Strategic Plan, which covers a four-year
period from 2021 to 2025, provides strategic direction to drive the productivity movement. The plan is
aligned to the Government Programme 2020-2024 and the Industrial Policy and Strategic Plan for Mauritius
2020-2025. This Strategic Plan responds to new imperatives to adjust, evolve, and maps out courses of action
to achieve measurable results.
The Government Programme 2020–2024 established an Economy Advisory Council at the Economic
Development Board (EDB) to advise on matters relating to the development of the economic landscape. An
Economic Research and Planning Bureau is also set up at the Ministry of Finance, Economic Planning and
Development. The Bureau translates the Government Programme into an overarching and coherent action
plan, within which private and public sector operators and institutions operate. The Programme also seeks
to, inter alia, consolidate Mauritius’ key economic sectors; provide for the unification of the regulatory
framework for fostering emerging sectors; and through the new industrial and trade policies, strengthen the
resilience of key sectors of the economy.29
27 The Mauritian Strategy to Leverage Opportunities in the African Continental Free Trade Area (AfCFTA).
28
Three-Year Strategic Plan 2018/2019-2021/22.
29 Government Programme 2020 – 2024.
The Mauritian commitment to industrialisation is outlined in the Industrial Policy and Strategic Plan30 which
provides recommendations intended to support the realisation of the country’s bold National 2030 Vision
which is the achievement of high-income status, supported by a highly productive manufacturing sector
contributing a quarter of the country’s GDP. The Plan contains a wide range of recommendations to support Page | 39
the continued growth and development of Mauritius’ industrial capacity and capabilities. The primary
recommendation that takes precedence over the balance of recommendations made is the establishment of
an Industrial Policy Executive Oversight Committee that reports to the Ministry of Industrial Development,
SMEs and Cooperatives, and that is responsible for monitoring and evaluating the realisation of the strategy
over its lifespan.
3.7.2 Laws and Regulations on Foreign Direct Investment (FDI)

Figure 9. Laws and regulations on FDI
The Economic Development Board Act of 201731 governs investment in Mauritius, while the Companies Act
of 200132 contains the regulations governing incorporation of businesses. The Corporate and Business
Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the
Companies Act of 2001, the Business Registration Act of 2002,33 the Insolvency Act of 2009,34 the Limited
Partnerships Act of 2011,35 and the Foundations Act of 2012.36
The Economic Development Board Act 2017 also sets up by the Economic Development Board (EDB) which
is the leading Government agency mandated to provide strong institutional support for strategic economic
planning and to promote Mauritius as an attractive investment and business centre, a competitive export
platform as well as an International Financial Centre (IFC).37 The EDB, as a corporate body, operates under
the auspices of the Ministry of Finance, Economic Planning and Development. While these legislations and
institutions primarily deal with investment promotion, a change in the international IP regime for trademarks
has implications for their mandate too. They need the necessary capacity to handle investment related issues
within a market with parallel imports.
30 Industrial Policy & Strategic Plan for Mauritius 2020-2025.

31 Act No. 11 of 2017.
32 Act No. 15 of 2001
33 Act No. Act 40 of 2002.
34 Act No. 3 of 2009.
35 Act No. 28 of 2011.
36
Act No. 8 of 2012.
37Economic Development Board (EDB), https://www.edbmauritius.org/.
3.7.3 Trade policy
Mauritius’ trade policy approach is based on trade openness and active engagement at multilateral and
bilateral levels.38 The current policy stance focuses upon the diversification of its markets, with a growing
Page | 40
focus on regional African markets; and product diversification, with a special focus on the blue economy. 39
This is aligned to the advantages of parallel imports to prevent the proliferation of monopolistic markets, and
hence, price gouging.
The country has a wide network of Free Trade Agreements (FTAs) that cover around 71% of the country’s
exports and 54.2% of its imports.40 Annexure 1 provides an overview of trade agreements that Mauritius has
signed including preferential access to key regional and international markets.
Mauritius is a member of SADC and COMESA, which grants the country preferential market access to 25
African countries. Regarding Intellectual Property Rights provisions, both SADC and COMESA have no regional
IP agreements, protocols, or registration systems in place. However, the SADC Industrialization Strategy and
Roadmap (2015-2063) includes a focus on promoting the use and enforcement of IP rights to encourage
research and development and innovation amongst SADC countries. COMESA has the Policy on Intellectual
Property Rights. The purpose of the Policy is to promote the use of intellectual property rights by COMESA
member states so that they can shift from resource-based economies to knowledge-based and innovation-
driven economies.41 Mauritius’ IP system is aligned with these regional aspirations and should also be
considered in the decision to adopt the international exhaustion regime for trademarks.
In addition, the African Continental Free Trade Area (AfCFTA) is aligned to Mauritius’ trade policy objectives
of an open economy. The AfCFTA allows Mauritius to pursue further market access opportunities, which is a
positive development for the country’s private sector and the Mauritian economy. However, the benefits of
the AfCFTA and other FTAs can only be realised in an open economy. Therefore, adopting the international
exhaustion regime for trademarks could be viewed as part of opening the market. It is indicative of the state’s
respect for consumers’ freedom to choose among different products and alternative providers accessing the
market through the AfCFTA. The Agreement also contains a Protocol on IP rights which aims for effective
protection and promotion of IP rights in Africa and may therefore have legal implications for Mauritius when
it comes into legal force. The Protocol on IP is more inclined towards a regional exhaustion regime for
trademarks.
Further ashore, Mauritius enjoys preferential market access to the European Union under the interim
Economic Partnership Agreement with the Eastern and Southern African group of countries (ESA-iEPA). Also,
following the departure of the UK from the EU, Mauritius signed an extension agreement – UK-ESA EPA –
safeguarding the existing trade preferences of the ESA group under the iEPA. In addition, Mauritius signed a
Strategic Trade Partnership (STP) with the UK in April 2023 to boost trade and investment in the following
sectors: financial and professional services, waste management and green economy, education, cyber,
pharmaceuticals and biotechnology and agriculture.42 Mauritius further signed an FTA with China,43 which
entered into force on January 1, 2021, and signed an India-Mauritius Comprehensive Economic Cooperation
and Partnership Agreement (CECPA), which entered into force on April 1, 2021.44 These agreements have
implications on the legal and regulatory framework which needs to be adjusted accordingly through various
Regulations. For instance, both India and China implement the international exhaustion regime for
trademarks, therefore, this has implications to be considered by Mauritius.
38 UNECA-UNDP. (2022). The African Continental Free Trade Area and Market Implications for the Mauritius Economy Post-COVID-19: A Case Study
on Manufacturing.
41 European Commission. (2021). IP Country Fiche Mauritius, https://intellectual-property-helpdesk.ec.europa.eu/system/files/2021-
11/IP%20Country%20Fiche%20MAURITIUS%20final.pdf.
42 Anjana Khemraz-Chikhuri. (2023). 2023 Investment Climate Statements: Mauritius, https://www.state.gov/reports/2023-investment-climate-
statements/mauritius/ .
43
Mauritius-China Free Trade Agreement, 2019.
44 Mauritius Trade Easy. (2021).
However, to ensure alignment of the Regulations with legislation and policies from all Ministries in the
country, there is need for a regulatory impact assessment and a socio-economic impact assessment. This will
also be key considerations should the government decide to adopt the international exhaustion regime for Page | 41
trademarks.
3.7.4 Intellectual property rights (IPR)

In 2017, the Intellectual Property Development Plan (IPDP) was developed with the assistance of the World
Intellectual Property Organization (WIPO). The IPDP was developed due to the important role that
Intellectual Property (IP) plays on the economic and cultural development and to reinforce the Intellectual
Property policy of Mauritius.
The purpose of the IPDP is to ensure that the potential users, organisations involved in IP enforcement, and
generators of IP have the technical capacity and know-how to use IP as a tool to promote research,
innovation, investment, and economic growth.45
The following were recommended by the IPDP and have subsequently been implemented:
• Finalise and enact the Industrial Property Bill;
• Expedite the accession process to the Madrid Protocol and Hague Agreement;
• Established a single IP office based on international best experiences; and
• Strengthen the legal framework to cover protection of new plant varieties (in the context of
geographical indications).
The IPDP also recommended that the following be implemented:

• Expedite the accession process to the Patent Cooperation Treaty (PCT);
• Provide IP promotional materials such as the PANORAMA Multimedia Toolkit and WIPO comic books
and support their translation into the country's national languages; and
• Design and implement intellectual property awareness programs tailored to meet the needs of
enforcement officers and create and strengthen awareness of consumers on the adverse impact of
IPRs infringement.
Intellectual property rights in Mauritius are currently protected by three pieces of legislation, namely the
Industrial Property Act of 2019,46 the Copyright Act of 2014,47 and the
Protection against Unfair Practices (Industrial Property Rights) Act of 2002.48
The Madrid
The 2019 Industrial Property Act and the accompanying regulations entered
Protocol provides a cost-
into force on January 31, 2022. This Act consolidates all industrial property-
effective solution for
related issues in one statute. The protection framework covers patents;
Mauritian businesses to
trademarks; industrial designs; utility models; layout-designs of integrated
protect their trademarks
circuits; plant varieties; trade names, and geographic indications.49 The Act
globally by paying one set
also allows the international filing of trademarks under the Madrid
of fees for a single
Protocol,50 the international filing of industrial designs under the Hague
international application.
Agreement,51 and the filing of patent applications under the Patent
Applicants based in
Cooperation Treaty. Should the international exhaustion regime for
countries party to the
trademarks be adopted, there is the likelihood of an increase in international registrations of trademarks as
Madrid System will be
able to choose to protect
their trademark in
45 Mauritius Trade Easy. Intellectual Property Policy, https://www.mauritiustrade.mu/en/intellectual-property-policy.
46 Act No. 15 of 2019.
47
Mauritius.
Act No. 2 of 2014.
48 Act No. 22 of 2002.
49Japan External Trade Organization. (2023). Report on Mauritius’ Intellectual Property System and Operation,
https://www.jetro.go.jp/ext_images/world/africa/ip/report_mau_202303_en.pdf.
50 Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks adopted at Madrid on June 27, 1989, as amended
on October 3, 2006, and on November 12, 2007.

51 The Hague Agreement Concerning the International Registration of Industrial Designs.
the Madrid Protocol entered into force in Mauritius. Both the Madrid Protocol and the Hague Agreement are
in force in Mauritius since 6 May 2023. The Patent Cooperation Treaty is in force since 15 March 2023.
Further, Mauritius is a member of the World Intellectual Property Organization (WIPO) and party to the Paris Page | 42
and Berne Conventions for the protection of industrial property and the Universal Copyright Convention. At
a regional level, the country is a member of the African Regional Intellectual Property Organization (ARIPO).
However, as Mauritius has not yet acceded to the Harare or Banjul Protocols, it cannot be designated in
patent, trademark or design applications filed via the ARIPO system.52 Trademark and patent laws in
Mauritius comply with the WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement.
However, one of the key considerations as the country considers adopting the international exhaustion
regime for trademarks is the enforcement of laws. It has been widely argued that, while IP legislation in
Mauritius is consistent with international norms, enforcement is relatively weak.53
The institutional framework for the enforcement of IP rights includes the Customs Department of the
Mauritius Revenue Authority which is the primary agency responsible for safeguarding Mauritian borders
against counterfeit goods and piracy. It is also the competent authority that enforces IP rights. The Anti-
Piracy Unit was set up in August 2001 under the aegis of the Police Force.
The Industrial Property Act establishes an Industrial Property Office headed by a director, sets up an
Intellectual Property Council which is advisory in nature, and provides for the jurisdiction of the Industrial
Property Tribunal among other related matters.54 The Industrial Property Office which falls under the aegis
of the Ministry of Foreign Affairs, Regional Integration and International Trade may have a role to play in
terms of sensitization, stakeholder engagement and training should the government adopt the international
exhaustion regime for trademarks. While these institutions are in place, issues related to capacity persist in
Mauritius. Therefore, the following are some of the measures to consider whether the international
exhaustion of trademarks is adopted or not:
• Institutional establishment – Institutions like the Anti-Piracy Unit representing all the relevant
Ministries need to be established to deal with issues related to IP rights and develop law enforcement
measures relevant to their respective Ministries.
• Capacity building – The current institutions lack the necessary capacity to enforce laws and safeguard
the Mauritian borders against counterfeit goods. Therefore, there is need to train the current staff
on the available tools to protect IP rights and safeguard the Mauritian ports of entry against
counterfeit goods. New and skilled staff also need to be deployed.
• Collaboration: IPO, Police, Anti-Piracy Unit and Customs – The Industrial Property Office (IPO), the
Police, Anti-Piracy Unit and the Customs Authorities need to work together with a defined system of
appropriate checks and balances to ensure accountability, responsiveness, and openness.
• Changes or amendments to legislation such as the Industrial Property Act of 2019 need to give more
power to the Anti-Piracy Unit to be able to identify and destroy counterfeits. Currently the law
requires the trademark holder to confirm that the identified goods are counterfeit before Customs
and the Anti-Piracy Unit can take any action. Mauritius, as a member of the agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS) is primarily bound by TRIPS,55which mandates
member nations to provide for criminal proceedings and sanctions in cases of trademark
infringement. In other jurisdiction implementing the international exhaustion regime such as India,
law enforcement agencies are conferred search and seizure powers.56
52 European Commission. (2021). IP Country Fiche Mauritius, https://intellectual-property-helpdesk.ec.europa.eu/system/files/2021-

11/IP%20Country%20Fiche%20MAURITIUS%20final.pdf.
53 Online Survey Conducted by Tutwa Consulting Group, July -August 2023.
54 Preamble to Act No. 15 of 2019.
55 Article 61.
56 Ruchi Singh et al. (29 September 2023). India: Bolstered anti-counterfeiting regime champions stricter market regulation and enhanced consumer
awareness, https://www.worldtrademarkreview.com/guide/anti-counterfeiting-and-online-brand-enforcement/2023/article/india-bolstered-anti-
counterfeiting-regime-champions-stricter-market-regulation-and-enhanced-consumer-awareness.
• Amendments to legislation should ensure red tape associated with dealing with counterfeits is cut
by imposing reasonable and fair time limits for action against counterfeits. Currently intellectual
property rights holders have 10 days in which to file a civil claim on notification of possible
infringements; failing this the goods will be released.57 Page | 43
Having provided an overview of the Mauritian legal and regulatory context, the following section seeks to
unpack the legal and regulatory framework by sector. This is done with an aim to draw implications on the
various legislative and regulatory mechanisms in place should the government adopt the international
exhaustion regime for trademarks. From a legislative perspective, while the sectoral legislation does not
necessarily deal with intellectual property rights, it is important to consider the implications of a change of
IP regime on the same. This is particularly important for the regulations on imports, price control and price-
markup which are highly likely to be impacted by parallel imports.
57
Duncan Maguire and Paul Ramara. (2021). Counterfeiting in Africa: an A-Z guide, https://www.spoor.com/wp-
content/uploads/2021/09/counterfeiting-in-africa.pdf.
4. Chapter Four: Sectoral Analysis
Page | 44
4.1 Pharmaceuticals Industry

4.1.1 Healthcare industry operations in Mauritius
Table 1 shows the performance of the top operators in the Mauritian healthcare industry. Overall, the
Mauritian healthcare industry is profitable, with a 2021 total turnover of almost MUR 12 billion and a pre-
tax profit margin of 11.19%. This is despite Mauritius sustaining a welfare state over four decades with free
health services in all public facilities. Inspection of the pre-tax profit margins across health industry operators
shows little evidence of exorbitant prices or price gouging. Most players in this industry experience pre-tax
profit margins of less than 20%.
As articulated in section 5.2, the advent of parallel imports may or may not improve the performance of this
industry. On the one hand, the increase in competition could drive down prices to the point where entities
are no longer profitable. At the same time, it could enable the entry of new participants, potentially, leaving
industry-wide turnover, and profit margins relatively unchanged.
Table 1. Top establishments’ turnover and profits before tax in the Mauritian healthcare industry, 2021
Number of Entities Turnover (MUR) Profit before tax (MUR) Profit (%)
33 11 991 083 984 1 341 938 688 11,19
Source: Consultant’s tabulation and calculations using data from The Top 100 Companies (Mauritius), Ranking by
industry, https://top100companies.mu/sector/health.
Note: Some values may be for financial years outside of 2021. Nevertheless, it has been included in the table
as it was included in the publication.
From a manufacturing perspective, however, the number of manufacturers in this industry has consistently
fallen since 2018. Should parallel imports cause manufacturing to become unprofitable, Mauritius could
experience further decreases in the number of participants in this industry. On the other hand, allowing
parallel imports could result in an increase in the number of manufacturers if these manufacturers require
inputs of trademarked products.
Table 2. Number of large manufacturing establishments in Mauritius for the relevant industry group
Industry group 2018 2019 2020 2021 2022

Coke and refined petroleum products / Chemicals and chemical
products / Basic pharmaceutical products and pharmaceutical 32 29 28 27 25
preparations
Source: Statistics Mauritius, Digest of Industrial Statistics.
Note: The above table includes large establishments outside of the pharmaceuticals industry. The table has been presented in this
manner due to the clustering of these industries.
The pharmaceuticals, medicinal and other chemical products industry employed 1 742 persons in March
2021. In March 2022, the industry employed 1 646 persons. A notable decrease of 5,5% of employees in this
industry has been observed in March 2022. Based on the survey administered by Tutwa Consulting Group, it
has been argued that, should the regime change to that of international exhaustion for trademarks, the
pharmaceuticals industry could lose up to 50% of their revenue, with substantial job losses occurring
subsequently.
Page | 45
Table 3. Industry employment by year
Industry 2021 2022
Pharmaceuticals, medicinal and other chemical products 1 742 1 646
Source: Statistics Mauritius, Digest of Labour Statistics.
Empirical socio-economic impact of international exhaustion of trademarks: The case of therapeutic and
prophylactic medication
The analysis presented in this subsection is based on the economic model and econometric methodology
outlined in sections 5.3 and 5.4. Table 4 shows the impact of the change in regime on consumer and producer
surplus.58 Specifically, it shows that adopting international exhaustion will have a small, but negative overall
impact on society. This is represented as the sum of the change in consumer surplus and the change in
producer surplus that occurs across the change in regimes.
Table 4. Socio-economic impact of the adoption of international exhaustion in the Mauritian medications
market
National exhaustion International Exhaustion Change
Consumer surplus 191.2028 193.447 2.244122

Producer Surplus -195.1351 -197.3868 -2.251703
Total Effect -0.0075807
Source: Consultants’ computation based on information outlined in sections 5.3 and 5.4.
Note: A negative producer surplus does not align with economic theory. This is likely the result of the data used in the analysis that
does not represent the market precisely. Nevertheless, the calculation of consumer and producer surplus proceeded as if the
regression results aligned with economic theory. Continuing with the simulations and analysis in this manner provides an outcome
that aligns with expectations. It is recommended that we take note of the effect of the transition (change), as opposed to overall
consumer and producer surplus, while noting that these results are likely not a true depiction of reality. Given the challenges
associated with this analysis, it is recommended that the surplus amounts be interpreted as units of surplus and not currency, as this
may be negative in certain cases. For the sake of simplicity, the equilibrium price, and quantity were computed in its natural
logarithm.
As expected, due to the reduction in price from increased competition, consumers can purchase more
products, at a lower price, thereby increasing their wellbeing. Conversely, increased competition and lower
prices means that sellers may see a reduction in their profitability, potentially leading to market exits. The
increase in consumer surplus being less than the reduction in producer surplus implies that society is worse
off under international exhaustion than it would be under national exhaustion.
It must be noted, however, partial equilibrium analyses do not account for the ripple effect of the changes
in the price of goods in a particular market. International exhaustion could also have implications which are
not being accounted for in the model. For example, the impact on producer surplus is particularly negligible
when compared to the benefits of accessible medications and overall good health, outside of the realm of
willingness to pay. While the results of this analysis might imply maintaining national exhaustion in the
58 It must be noted that, due to the data used, the econometric modelling was plagued with problems.
pharmaceuticals industry, deeper analysis must be conducted to ascertain benefits outside of consumer
surplus.
4.1.2 Legal and Regulatory Analysis Page | 46
The pharmaceutical industry is highly regulated in Mauritius. There are various regulations which collectively
are aimed at ensuring the availability, safety, efficacity and affordability of pharmaceutical products for users.
Enabling legislation
The main legislations regulating the pharmaceuticals industry are the Pharmacy Act 1983,59 the Pharmacy
Council Act 2015,60 the Consumer Protection (Price and Supplies Control) Act 199861 and various regulations
made by the responsible Minister through these Acts.
Regulatory control is, therefore, exercised in a comprehensive manner through these Acts at three levels,
namely the:
• Registration of pharmaceutical products,
• Licensing of economic operators, and
• Pricing of pharmaceutical products.
The Pharmacy Act 1983

The Pharmacy Act provides for the main framework for regulating the manufacturing, importation,
distribution, and sale of pharmaceutical products in Mauritius.
The Pharmacy Act has undergone various revisions by the Economic and Financial Measures (Miscellaneous
Provisions) Act 2013,62 the Pharmacy Council Act, the Business Facilitation (Miscellaneous Provisions) Act
201963 and the Covid-19 (Miscellaneous Provisions) Act 2020.64 Collectively, these revisions were aimed at
formalising the registration and commercialisation process of pharmaceutical products supplied in
Mauritius.65
The Pharmacy Act establishes a Pharmacy Board which is entrusted with several functions.66 The Board is
responsible for, inter alia, exercising control over the manufacturing, importation, distribution, sale and
possession of any drug or poison, dangerous drug, and psychotropic substance; licensing any person wishing
to operate a pharmacy and taking measures to ensure the implementation of the Act. The statutory functions
of the Board are exercisable subject to the approval of the Minister.67 In addition, the Board is also assisted
by several committees established by the Act in carrying out its functions.68
The Pharmacy Council Act 2015

The Pharmacy Council Act transfers the regulatory function regarding the pharmacist profession to the
Pharmacy Council. The Council aims to provide a better regulation of the profession of pharmacists in
Mauritius.69
59 Act No. 60 of 1983.

60 Act No. 13 of 2015.
61 Act No. 12 of 1998.
62 Section 34, Act No. 27 of 2013.
65 Competition Commission, Market Study: Pharmaceutical Sector in Mauritius MS/004 (Report of the Executive Director) 08 June 2021.
66 Section 3.
67 Section 4 of the Pharmacy Act 1983.
68
These committees include the Trade and Therapeutics Committee, the Poisons Committee, and the Planning Committee.
69 Preamble to the Pharmacy Council Act 2015.
The Council, which consists of 15 members, has been fully operational since November 2017, and has the
main functions of:70
Page | 47
• Controlling access to the profession of pharmacist through proper registration procedures,
approved training and examinations for pre-registration trainees and the publishing of an annual
official list of pharmacists,
• Ensuring that pharmacists are fit to practise by providing for continuing professional education, and
• Maintaining discipline through guidelines contained in a Code of Practice and through clear
disciplinary procedures in cases of pharmacists’ default.
The Consumer Protection (Price and Supplies Control) Act 1998
The Consumer Protection (Price and Supplies Control) Act makes provision for the control of trading practices
and prices in Mauritius and establishes a Profiteering Division at the Supreme Court, which shall have
exclusive jurisdiction to try any person charged with an offence under this Act.
The Act grants powers to the Minister, to whom responsibility for the subject of commerce and consumer
protection is assigned, to oversee prices of goods denoted as “controlled goods”. The responsible Minister
can either fix the price directly71 or determine the maximum mark-up72 that a controlled good is subject to.
Several pharmaceutical products are classified as controlled goods whereby the maximum mark-up is fixed
through the Consumer Protection (Consumer Goods) (Maximum Mark-up) Regulations 1998.73
While the Pharmacy Act makes provision for a permit requirement for any person who wants to import drugs,
the Consumer Protection (Control of Imports) Regulations 201774, exempts the following from regulations:
• Clinics, laboratories, and individuals importing pharmaceutical, medical, and hygienic products and
food supplements for their own use.
• Pharmacies importing lifesaving drugs.
The adoption of the international exhaustion regime might not have any significant impact on the legal and
regulatory framework for the pharmaceuticals industry. The industry is already highly regulated from a legal
and institutional point of view. However, the personnel from the institutions responsible for issuing of
imports permits- Ministry of Health and Quality of Life and the Pharmacy Board- may need to be prepared
for a change of regime through capacity building training. The Customs authorities responsible for dealing
with counterfeits may also need to be capacitated and trained to deal with a change of regime.
4.1.3 Recommendations for the Sector

In anticipation of the adoption of international exhaustion of trademarks, the pharmaceutical sector should
consider several key recommendations to navigate these changes effectively. First and foremost, there
should be a commitment to the strong enforcement of regulations, ensuring a level playing field for all
stakeholders involved. The industry should prioritize the development and implementation of rigorous
systems to check and test the quality of products entering the market, emphasizing safety and efficacy.
Transparency from authorities is paramount, and there should be open communication regarding any
shortcomings or product safety issues to maintain public trust.
To ensure traceability of product sourcing, robust collaboration with regulatory authorities from the country
of origin is essential. In addition, the sector should invest in qualified officers capable of conducting thorough
quality and safety audits of warehouses and distribution facilities, enabling them to propose and implement
70 Section 5 of the Pharmacy Council Act 2015.

71 Section 3 of the Consumer Protection (Price and Supplies Control) Act.
73
Government Notice No. 150 of 1998.
74 Government Notice No. 160 of 2017.
remedial actions as needed. These measures collectively contribute to a proactive and prepared approach
for pharmaceutical companies facing the challenges posed by the international exhaustion of trademarks.
Page | 48
4.2 Automotives Industry
4.2.1 Automotive industry operations in Mauritius
Between 2020 and 2021, the Automotive Industry thrived with a 12.3% revenue boost totalling Rs 15.2 billion
in turnover. According to industry players, approximately 80% of sales are new vehicles. The success of this
industry is attributed to factors like pre-orders, consistent cargo ship deliveries, and demand stemming from
the ongoing metro project.7 While the Mauritius Top 100 Companies webpage included data on pre-tax
profits for other industries, these were omitted for the Automotive industry. Instead, turnover for 2020 was
included in the data.
Table 5. Top establishments’ turnover in the Mauritian automotives industry, 2021 and 2020.
Turnover 2021 (millions of
Company name Turnover 2020 (millions of MUR)
MUR)
12 Entities 15 261,82 13 592,03
industry, https://top100companies.mu/sector/automotive.
industry-wide turnover, and profit margins unchanged.
Industry group 2018 2019 2020 2021 2022
Motor vehicles, trailers and semi-trailers / Other transport
8 9 9 9 6
equipment
From a manufacturing perspective, the Mauritian automotive industry performs poorly, with the number of
manufacturers in the industry falling to 6 in 2022 from 9 in 2021. Opening the market to parallel imports of
automotives components could have a positive impact on this industry as the inputs of this manufacturing
process would become more accessible.

Industry 2021 2022
Automotives (incl. sales, spares, and service) 3 572 3 537
Employment in the automotive industry remained relatively stable between 2021 and 2022, with total
industry employment currently 3 537. The impact of parallel imports on employment in this industry is also
unclear. On the one hand, it could lead to job losses in existing entities. However, should it enable entry into
the market by new market players, job losses could be offset by jobs created by new entities.
Empirical socio-economic impact of international exhaustion of trademarks: The case of bumpers
The analysis presented in this subsection is based on the economic model and econometric methodology Page | 49
outlined in sections 5.3 and 5.4. Table 8 shows the impact of the change in regime on consumer and producer
surplus. Specifically, it shows that adopting international exhaustion will have a small, but negative overall
impact on society. This is represented as the sum of the change in consumer surplus and the change in
producer surplus that occurs across the change in regimes.
Table 8. Socio-economic impact of the adoption of international exhaustion in Mauritian bumper market

Note: A negative producer surplus does not align with economic theory. This is likely the result of the data used in the
analysis that does not represent the market precisely. Nevertheless, the calculation of consumer and producer surplus
proceeded as if the regression results aligned with economic theory. Continuing with the simulations and analysis in
this manner provides an outcome that aligns with expectations. It is recommended that we take note of the effect of
the transition (change), as opposed to overall consumer and producer surplus, while noting that these results are likely
not a true depiction of reality. Given the challenges associated with this analysis, it is recommended that the surplus
amounts be interpreted as units of surplus and not currency, as this may be negative in certain cases. For the sake of
simplicity, the equilibrium price, and quantity were computed in its natural logarithm.
products at a lower price, which increases their sense of wellbeing. Conversely, the increased competition
and lower prices means that sellers may see a reduction in their profitability, potentially, leading to market
exits. The increase in consumer surplus being less than the reduction in producer surplus implies that society
is worse off under international exhaustion than it would be under national exhaustion.
It must be noted, however, that partial equilibrium analyses do not account for the ripple effect of the
changes in the price of goods in a particular market. That said, international exhaustion could have
implications for industries that are linked to the Mauritian automotive industry which are not being
accounted for in the model.
4.2.2 Legal and Regulatory Analysis

The automotive industry covers the manufacture of motor vehicles, trailers, and semi-trailers as well as the
production of spare parts and components.
In Mauritius there are several car dealers that cover the most popular trademarks in the world, which
benefits the consumer by the multiple options to choose according to their acquisition capacity. Dealerships
have thrived selling a variety of cars, from luxury cars to compact cars, in differentiated markets.
Like in other countries, the automotive industry in Mauritius is highly regulated. There are various regulations
which collectively are aimed at ensuring the availability, safety, efficacity and affordability of automotive
products for users.
The principal legislation is the Consumer Protection (Price and Supplies Control) Act 199875 and various
regulations made by the responsible Minister through the Act.
Consumer Protection (Price and Supplies Control) Act 1998 Page | 50
The Consumer Protection (Price and Supplies Control) Act makes provision for the control of trading practices
and prices in Mauritius and establishes a Profiteering Division at the Supreme Court, which shall have the
exclusive jurisdiction to try any person charged with an offence under this Act.76 In substance, the Act grants
powers to the Minister, to whom responsibility for the subject of commerce and consumer protection is
assigned, to oversee prices of goods denoted as “controlled goods”. More precisely, the responsible Minister
can either fix the price directly77 or determine the maximum mark-up78 to which a controlled good is subject.
Consumer Protection (Importation and Sale of Second-hand Motor Vehicles) Regulations 2004
The issue of licences to authorised dealers in imported second-hand motor vehicles is governed under the
Consumer Protection (Importation and Sale of Second-hand Motor Vehicles) Regulations 2004 (Amended in
2018), made by the Minister under section 35 of the Consumer Protection (Price and Supplies Control) Act.79
Regulation 4 limits the business of importation and sale of second-hand motor vehicles to companies only.80
A company which intends to carry on the business of importation and sale of second-hand motor vehicles is
required to apply to the Permanent Secretary for a licence authorising it to do so.81
Consumer Protection (Control of Imports) Regulations 2017
Restricted/controlled goods may be imported or exported provided the importer or exporter has the
necessary authorization/permits. Second-hand motor vehicles are among these goods and are subject to an
import permit. Prohibited goods, on the other hand, are those goods for which importation and exportation
have been completely banned for reasons linked to health, environment, protection of endangered species
of flora and fauna, security, and legislation. These items shall be liable to forfeiture by customs and the
person may be liable to a penalty.82
The Consumer Protection (Control of Imports) Regulations 201783 provides a list of controlled goods. The
Third Schedule (Prohibited goods) (Consumer Protection Control Imports Regulation2 2017) lists the
following as prohibited goods:
• Motor vehicle rubber tyres which have been remoulded, recapped or regrooved.84
• Some specified spare parts and accessories of second-hand motor vehicles.85
• Second-hand motor vehicles as follows86:
75
Act No. 12 of 1998.
76 Competition Commission, Market Study: Pharmaceutical Sector in Mauritius MS/004 (Report of the Executive Director) 08 June 2021.
79 Regulation 4.
80 Regulation 3 (As amended in 2018), see Government Notice No. 92 of 2018.
81 Regulation 4.
82 Mauritius Revenue Authority: Prohibited and restricted goods, https://www.mra.mu/download/ProhibitedRestricted.pdf.
83 Government Notice No. 160 of 2017.
84 Item 20.
85
Item 29.
86 Item 28.
Table 9. Prohibited second-hand motor vehicles (Mauritius)
Prohibited second-hand motor vehicle Description Page | 51
Motorcars, including sports vehicles, crossover, and Below 18 months and above 4 years from the date of first
jeep-type motor vehicles. registration, at the date of shipment, except for the first
vehicle imported by an individual importer.
Dual purpose vehicles, including 2x4 and 4x4 double- Below 18 months and above 3 years from the date of first
cab truck but excluding van and double cab heavy registration, at the date of shipment, except for the first
duty lorry. vehicle imported by an individual importer.
Goods vehicles (lorries, including double-cab heavy Above 6 years from the date of first registration, at the date
duty lorries and trucks other than 2x4 and 4x4 of shipment, except for the first vehicle imported by an
double-cab trucks) individual importer.
Vans, other than motor buses, designed to carry Above 4 years from the date of first registration, at the date
goods and/or to carry not more than 7 persons of shipment, except for the first vehicle imported by an
including the driver. individual importer.
Motor buses. Above 3 years from the date of first registration, at the date
of shipment, except for the first vehicle imported by an
individual importer.
The Fourth Schedule sets out a list of restricted goods which also includes second-hand motor vehicles.87
Restrictions on the restricted goods set out the fourth schedule are set out in the sixth schedule.88 In terms
of second-hand motor cars, other than classic or vintage cars:
• An individual or firm other than an authorised dealer or a taxi owner/ driver shall be entitled to
import one motor car every five years.
• An authorised dealer shall not be subject to any restriction.
• A taxi owner/driver shall be entitled to import one motor car every four years.
Should the government decide to implement the international exhaustion regime for trademarks, there will
not be need for massive changes in the legal and regulatory framework for this industry. However, it will be
important to ensure that the enforcement measures of the relevant laws and regulations is reviewed to deal
with any possible attempts to deviate from the laws as imports begin to increase.
4.3 Food and Beverages Industry

4.3.1 Food and Beverages industry operations in Mauritius
Table 10 shows the performance of the top food and beverages distributors in Mauritius. The overall
profitability of the Mauritian food distribution industry is perceived to be unsustainable, with a total turnover
of MUR 35 billion and a pre-tax profit margin of 2.04%.
87
Consumer Protection (Control of Imports) Regulations 2017.
88 Consumer Protection (Control of Imports) Regulations 2017.
Table 10. Top establishments’ turnover and profits before tax in the Mauritian Distributive sector, 2021
Profit before tax (millions of Page | 52
Number of entities Turnover (millions of MUR) Profit (%)
MUR)
27 Entities 35 029,82 714,93 2,04
industry, https://top100companies.mu/sector/distributive.
Note: Entities with no entries for this publication were removed from the analysis. Some values may be for financial years
outside of 2021. Nevertheless, it has been included in the table as it was included in the publication.
From a manufacturing perspective, the number of large establishments in Mauritius has declined steadily –
the number of large manufacturing establishments is lower in 2022 than it was in 2018. Should parallel
imports cause manufacturing to become unprofitable, Mauritius could experience further decreases in the
number of participants in this industry. On the other hand, allowing parallel imports could result in an
increase in the number of manufacturers if these manufacturers require inputs of trademarked products or
components.
Industry group 2018 2019 2020 2021 2022
Food products 107 105 102 96 92
Beverages 13 12 13 11 11
The food and beverages industry employed a total of 26 864 people in 2021 and, by 2022, this figure
remained relatively unchanged. Changes in employment, following the adoption of international exhaustion
for trademarks, depend on whether the entities are trademark holders or those that require inputs of
trademarked products. In the case of the latter, international exhaustion may increase employment, as it
would facilitate more imports, increasing operations in this industry.

Industry 2021 2022
Food and beverages 26 864 26 678
Source: Digest of Labour Statistics, Statistics Mauritius.
4.3.2 Empirical socio-economic impact of international exhaustion of trademarks: The case

of whisky
outlined in sections 5.3 and 5.4. Table 13 shows the impact of the change in regime on consumer and
producer surplus. Specifically, it shows that adopting international exhaustion will have a small, but positive
overall impact on society. This is represented as the sum of the change in consumer surplus and the change
in producer surplus that occurs across the change in regimes.
Table 13. Socio-economic impact of the adoption of international exhaustion in the Mauritian whisky market
National exhaustion International Exhaustion Change Page | 53
Total Effect 0.09989818

Note: A negative producer surplus does not align with economic theory. This is likely the result of the data used in the analysis that
does not represent the market precisely. Nevertheless, the calculation of consumer and producer surplus proceeded as if the
regression results aligned with economic theory. Continuing with the simulations and analysis in this manner provides an outcome
that aligns with expectations. It is recommended that we take note of the effect of the transition (change), as opposed to overall
consumer and producer surplus, while noting that these results are likely not a true depiction of reality. Given the challenges
associated with this analysis, it is recommended that the surplus amounts be interpreted as units of surplus and not currency, as this
may be negative in certain cases. For the sake of simplicity, the equilibrium price, and quantity were computed in its natural
logarithm.
products, at a lower price, thereby increasing their wellbeing. Conversely, the increased competition and
lower prices means that sellers may see a reduction in their profitability, potentially, leading to market exits.
The increase in consumer surplus being greater than the reduction in producer surplus implies that society
is better off under international exhaustion than it would be under national exhaustion. It must be noted,
however, that partial equilibrium analyses do not account for the ripple effect of the changes in the price of
goods in a particular market. That said, international exhaustion could have implications for industries that
are linked to the Mauritian whisky industry which are not being accounted for in the model.
4.3.3 Recommendations for the Sector

In anticipation of international exhaustion of trademarks in the food and beverages industry, a series of
strategic recommendations can be implemented to prepare and adapt to this evolving landscape. Firstly, a
strong emphasis should be placed on reinforcing internal quality control measures to ensure product
consistency and safety. This includes investing in advanced testing technologies for both raw materials and
finished goods. Second, companies should establish a dedicated team to monitor and ensure compliance
with international regulations governing the food and beverage sector. Transparent labelling practices,
incorporating detailed information about sourcing, ingredients, and nutritional content, should be
implemented to enhance consumer trust. Collaborative efforts with regulatory authorities in different
countries are crucial for staying ahead of changes in policies and ensuring compliance.
Developing robust systems for traceability throughout the supply chain is essential. Training personnel in
quality control and safety measures, as well as developing a team of qualified officers for facility audits, will
further contribute to overall preparedness. These recommendations collectively serve to fortify the food and
beverages industry against potential challenges arising from the international exhaustion of trademarks.
Concern regarding imports

Mauritius is a net importer of food and beverages, with an overall self-sufficiency ratio of less than 30 per
cent.89 Due to the country’s limited size, the absence of economies of scale, and the dominance of the sugar
industry in economic terms, Mauritius imports many of its essential food requirements.90 The main concern
of the government in relation to food and beverages is, therefore, to guarantee the supply of basic food
89
Norman Noland (2022). The future of food security, https://www.dale-capital.com/future-of-food-security/
90 Norman Noland (2022). The future of food security, https://www.dale-capital.com/future-of-food-security/.
products at affordable prices, thus controlling domestic production and imports of staple foods; like onions,
potatoes, garlic and its seeds, wheat flour, bread, rice and fish.91
4.3.4 Legal and Regulatory Analysis Page | 54
The primary legislation regulating the food and beverages industry include The Food Act 1998,92 Consumer
Protection (Price and Supplies Control) Act 1998, the Mauritius Food Standards Agency Act 2022,93 Mauritius
Cane Industry Authority Act,94 the recently adopted Food Act 2022 (to repeal the Food Act 1998), and various
regulations made by the responsible Minister through the Acts.
To control the exploitation of the fishing resource, the government developed a Fisheries Master Plan. The
main beneficiaries of the program are the fishermen and the coastal communities of the region.
It is also noted that on September 12, 2023, the government of Mauritius notified the WTO of new measures
with regards to their food regulations. The Draft Food Regulations 2023 are intended to replace the Food
Regulations of 1999, with the overarching aim of fortifying the food control framework in Mauritius to align
with international food standards.95 Among other notable provisions, the Regulations prohibit the substitute
of a food by a trademark, brand name or fancy name.96
The Food Act 2022

The Food Act of 202297 which repeals the Food Act 1998, seeks to provide for the modernisation and
consolidation of the laws relating to the safety and nutritional quality of food, and for matters related
thereto.98 The Act provides a set of conditions for the importation of food and beverages into the Republic.
The conditions relating to import of food are outlined in Section 3 on the Act. The Act prohibits any person
from importing food into Mauritius which is unsafe, misbranded, or sub-standard food, or food containing
any extraneous matter and any article of food which does not comply with this Act, or any regulations made
under the Act.99
In terms of the Act, all food business operators are required to register as such under Section 6 of the Business
Registration Act.100 Food business operators are required to comply with terms and conditions that the
supervising officer may impose for the purpose of production, processing, import, distribution, or sale.101
Consumer Protection (Price and Supplies Control) Act 1998

The Consumer Protection (Price and Supplies Control) Act 1998 seeks to provide better protection for
consumers and to establish a Profiteering Division of the Supreme Court.102 It also provides for a number of
regulations to regulate the food and beverages industry.
91
MCCI: Guide to Import, https://www.mcci.org/en/inside-mauritius/imports-exports/guide-to-import/.
92 Act 1 of 1998.
93 Act No. 16 of 2022.
94 Act No. 40 of 2011.
95 Canadian Food Exporters Association (2023). New food regulations in Mauritius, https://www.cfea.com/new-food-regulations-in-mauritius/.
96 Regulation 9.
97 Act No. 12 of 2022.
98 Preamble to the Food Act 2022.
99 Section 3 of the Food Act 2022.
100 Section 4 of the Food Act 2022.
101
Section 5 of the Food Act 2022.
102 Preamble to the Act.
Consumer Protection (Control of Imports) Regulations 2017
Several products are subject to import control as per the Consumer Protection (Control of Imports)
Regulations 2017.103 Like in the other industries, restricted/controlled goods may be imported or exported
Page | 55
provided the importer or exporter has the necessary authorization or permits. For example, foodstuffs will
require the proper permits from Health and or Agricultural Authorities.
In terms of food imports, no person shall import a food product unless the food product has a shelf life of at
least 50 per cent at the time of shipment.104
It is anticipated that the new Food Act 2022 together with the Draft Food Regulations 2023 will provide a
stronger regulatory framework for the food and beverages industry. However, it is also noted that Mauritius
has had a comprehensive legal framework in this regard. As the government considers the international
exhaustion regime for trademarks, one of the key considerations is the capacity of the relevant authorities
to control counterfeit imports. In terms of food safety, one respondent to an online survey conducted by the
consultants found that it will be extremely difficult for authorities to co-ordinate a recall of products when
there are several distributors having sold the same product on the market.
4.4 Clothing and textiles industry

4.4.1 Clothing and Textile industry operations in Mauritius
Table 14 shows the top performing entities in the Mauritian textiles industry. Overall, the Mauritian textile
industry is unarguably profitable, with a 2021 total turnover of MUR 36 billion and a pre-tax profit margin of
24.30%.
Table 14. Top establishments’ turnover and profits before tax in the Mauritian Textile industry, 2021
Turnover (millions Profit before tax
Number of companies Profit (%)
of MUR) (millions of MUR)
29 entities 36,328.92 1,867.55 24.30
industry, https://top100companies.mu/sector/textile.
Note: Entities with no entries for this publication were removed from the analysis. Some values may be for financial years outside of
before 2021. Nevertheless, it has been included in the table as it was included in the publication.
The number of large manufacturers in the clothing and textiles industry, have declined since 2018. The impact
of parallel imports on these establishments is unclear. On the one hand, if these establishments manufacture
trademarked products, international exhaustion could reduce their market share. On the other hand, if they
rely on inputs of trademarked products, and they are not the holder of the trademark for the products they
require, international exhaustion could prove beneficial.
103
Fourth Schedule.
104 Regulation 4 of the Consumer Protection (Shelf Life of Imported food Products) Regulations 2020.
Industry group 2018 2019 2020 2021 2022 Page | 56
Textiles 30 26 26 24 22
Wearing apparel 117 110 103 93 90
Leather and related products 13 13 11 12 12
Of which: Footwear 6 6 4 4 4
In terms of employment, over the 2021-2022 period, employment in the clothing and textiles industry
decreased from 27 576 to 25 469. Changes in employment, following the adoption of international exhaustion
for trademarks depend on whether the entities are trademark holders or those that require inputs of
trademarked products. In the case of the latter, international exhaustion may increase employment as it
would facilitate more imports, increasing operations in this industry.

Industry 2021 2022
Clothing and textiles 27 576 25 469

4.4.2 Empirical socio-economic impact of international exhaustion of trademarks: The

case of sports footwear
outlined in sections 5.3 and 5.4. Table 17 shows the impact of the change in regime on consumer and
producer surplus. Specifically, it shows that adopting international exhaustion will have a small, but negative
overall impact on society. This is represented as the sum of the change in consumer surplus and the change
in producer surplus that occurs across the change in regimes.
Table 17. Socio-economic impact of the adoption of international exhaustion in Mauritian sports footwear
market
Page | 57

Note: A negative producer surplus does not align with economic theory. This is likely the result of the data used in the
analysis that does not represent the market precisely. Nevertheless, the calculation of consumer and producer surplus
proceeded as if the regression results aligned with economic theory. Continuing with the simulations and analysis in
this manner provides an outcome that aligns with expectations. It is recommended that we take note of the effect of
the transition (change), as opposed to overall consumer and producer surplus, while noting that these results are likely
not a true depiction of reality. Given the challenges associated with this analysis, it is recommended that the surplus
amounts be interpreted as units of surplus and not currency, as this may be negative in certain cases. For the sake of
simplicity, the equilibrium price, and quantity were computed in its natural logarithm.
products at a lower price, which increases their sense of wellbeing. Conversely, the increased competition
and lower prices means that sellers may see a reduction in their profitability, potentially, leading to market
exits. The increase in consumer surplus being less than the reduction in producer surplus implies that society
is worse off under international exhaustion than it would be under national exhaustion.
It must be noted, however, that partial equilibrium analyses do not account for the ripple effect of the
changes in the price of goods in a particular market. That said, international exhaustion could have
implications for industries that are linked to the Mauritian footwear industry which are not being accounted
for in the model.
The textile and clothing industry has been an engine of economic growth in the Mauritian economy.105 The
main activities of the textile and clothing sector comprise the production of textile yarns and fabrics, which
involve spinning, weaving, knitting and dyeing activities and the manufacture of wearing apparel.
The most relevant legislation for the clothing and textiles industry is the Consumer Protection (Price and
Supplies Control) Act 1998 and Industrial Property Act 2019.106
The purpose of the Consumer Protection (Price and Supplies Control) Act 1998 has been discussed in the
above. The Industrial Property Act seeks to provide for the protection of industrial property rights including,
inter alia, patents, utility models, industrial designs, marks, and trade names.107 The Act also establishes an
Industrial Property Office headed by a director, sets up of an Intellectual Property Council which is advisory
in nature, and provides for the jurisdiction of the Industrial Property Tribunal among other related matters.108
105 Industrial Policy and Strategic Plan (2020-2025).

106 Act No. 15 of 2019.
107
Preamble to Act No. 15 of 2019.
108 Preamble to Act No. 15 of 2019.
Recommendations for the Sector
To prepare for the emergence of parallel imports in the clothing industry, businesses should focus on
strengthening intellectual property protection through legal frameworks and enforcement measures.
Page | 58
Effective supply chain management and brand building can mitigate the “risks” posed by parallel imports.
Engaging in public awareness campaigns to educate consumers about the risks, monitoring international
pricing strategies, and fostering collaboration within the industry are crucial. Leveraging technology for
traceability, adapting business models, and staying vigilant about market trends will help businesses
proactively respond to the challenges associated with parallel imports.
4.5 Conclusion
This chapter has explored the economic, social, legal, and regulatory environments relevant to adopting
international trademark exhaustion in the key sectors identified at the start of the project. Mauritius would
very likely handle a move to international exhaustion without significant problems. it’s the country has a
stable political environment and commitment to economic freedom. However, it does face economic
challenges such as overreliance on key industries. The potential benefits of introducing international
exhaustion include enhancing competition and reducing the skills gap are clear. Yet, established businesses
and trademark holders note that these benefits are not required in their businesses as they have dedicated
investments and innovation to produce their success already.
The impact on international trade remains uncertain, yet aligning with global norms and trading partners
enhances the Mauritian position. The effects on income inequality, education, and demographics have been
considered through stakeholder interviews and the analysis of available data. The industry examination
above and the off-the-shelf price analysis (Chapter 6) clearly shows that Mauritius prices overall are more
expensive than South Africa and much more expensive than India. The expectation is that at least in the four
sectors under examination, parallel imports will bring down prices for these products.
The examination of the legal and regulatory frameworks for specific industries caution on the need for
preparedness and enhanced enforcement measures, especially as volumes of imports may rise under the
international exhaustion regime. While some industries already have comprehensive legal frameworks,
others may require capacity-building efforts to navigate the transition effectively – and to ensure that
implementation follows good policy frameworks. In updating the regulatory framework, a regulatory impact
assessment will be needed to, inter alia, ensure alignment of the new and amended regulations with
legislations and policies from other Ministries. In addition, a socio-economic impact assessment (SEIA) is also
needed to determine the impact of regulatory changes on consumers from a price and welfare perspective.
In the decision-making process, collaboration between the government and the private sector is essential,
particularly considering the potential disruptions, such as the recent decline in public-private partnerships.
Mauritius must navigate this transition thoughtfully to maximize benefits and minimize challenges.
The shift to international trademark exhaustion in Mauritius involves multifaceted decisions that necessitate
a comprehensive understanding of its potential impact on various sectors of the economy and society.
Strategic planning and effective management will be vital in order to capitalize on the benefits and address
potential disruptions associated with this policy shift.
5. Chapter Five: Socio-economic impact assessment
Page | 59
5.1 Introduction
This chapter assess the socio-economic impact of adopting international exhaustion in Mauritius. First, it
hypothesizes the potential impact of parallel imports on key economic agents and their subagents.
Secondly, it presents the economic model and econometric methodology used to empirically assess the
socio-economic impact of allowing parallel imports.
Thirdly, the chapter presents industry analyses – focusing on those industries that are most likely to be
affected by the transition to international exhaustion. Within these industry analyses, the socio-economic
impact of international exhaustion for selected products is conducted. Clearly, this is not an exhaustive
analysis – in the first instance, because of the lack of accurate and complete data and secondly, given the
timeframe in which the study has been undertaken.
5.2 The socio-economic impact: A hypothetical assessment

This section of the chapter conducts a hypothetical assessment of the costs and benefits that could accrue
to various economic agents following the adoption of international exhaustion for trademarks. The
assessment is based on the consultants’ understanding of the arguments for and against parallel imports,
the importance of trademarks, and is also informed by stakeholder consultations.
5.2.1 Government
GDP
The adoption of international exhaustion of trademarks can have positive implications for a nation's GDP.
This stems from the increased consumer choice and competition that parallel imports bring to the market.
When consumers have access to a wider range of affordable products, they tend to spend more, stimulating
economic growth.
However, there are also potential costs for governments. Should the influx of parallel imports outweigh
domestic producers’ capacity, Mauritius’ already weak manufacturing capability may be further impeded. In
addition, the increase in competition may also see a reduction in the profits of trademark owners, and hence,
a reduced contribution to government revenue in the form of corporate taxes from manufacturers.
Political cooperation
The alignment of international trademark rules can facilitate political cooperation and strengthen diplomatic
ties. However, differences in trademark policies can strain political relations. Differences in these policies can
result in disagreements in international negotiations, potentially undermining political cooperation.
Others
International exhaustion of trademarks can reduce price disparities between countries, making products
more accessible to consumers. This can enhance market access and promote economic integration. However,
enforcing trademark rights consistently across various markets remains a challenge. This can lead to issues
such as counterfeit products, which pose risks to brand integrity. These risks require increased enforcement
efforts, resulting in additional costs for government.
5.2.2 Private Sector Page | 60
Importers
Potential importers – apart from the trademark holder – stand to gain from the ability to parallel import, as
they would have access to a broader variety of goods. Competitive pricing resulting from parallel imports can
attract more consumers, drawing customers away from current trademark holders. Consequently, current
trademark holders in Mauritius may experience negative impacts to their profit margins, due to losses in
market share. These businesses would have to re-evaluate their business strategy to retain market share in
an environment of increased competition.
Manufacturers
Manufacturers that require intermediate products that are trademarked may benefit from access to cheaper
inputs, leading to business growth. On the other hand, manufacturers of trademarked products may be
adversely affected, due to increased competition from parallel imports. In addition, the potential loss of
control of distribution can affect a manufacturer's ability to maintain a consistent brand image and market
positioning. Manufacturers would need to adapt to these changes to remain competitive.
Value-added providers
Companies involved in value-added services like marketing, distribution, and quality control may see their
business impacted negatively. For example, if parallel imports erode the market share of exclusive
distributors that contract the services of value-added providers, these service providers may face reduced
demand. In terms of the value that manufacturers add during the manufacturing process, the loss in market
share that results from the advent of parallel imports may disincentivize investment in high value-add
processes.
Exporters
Exporters that are considering entering the export of trademarked products industry would benefit from the
change in regime. However, current exporters of trademarked products would experience adverse
consequences due to increased competition. Increased competition in export markets due to parallel imports
may affect pricing strategies and necessitate adjustments in export strategies to remain competitive in the
global marketplace.
5.2.3 Consumers
Resellers
Resellers can offer more affordable products and a wider range of choices to consumers due to parallel
imports. However, the traditional distribution channels may face disruption as consumers increasingly opt
for parallel imports. This has the potential to affect the resellers' existing business models and requiring
adaptation to the evolving market dynamics.
End-users
End-users benefit from lower prices and a wider selection of products due to parallel imports, improving
their purchasing power and choices. However, there may be potential risks related to product quality and
authenticity, as the control over distribution may be less stringent in the parallel import market. This requires
consumers to be more discerning and cautious in their purchasing decisions to ensure they receive products
that meet their standards.
5.2.4 Economic cooperation between key agents in the case of international exhaustion
In addition to the impacts that would accrue to the main economic agents, and their subagents, this Page | 61
subsection examines the dynamics between these agents within the context of international exhaustion.
Table 18. Relationship dynamics of key economic agents

Aspect Government-Private Government-Civil Society Private Sector-Civil Society
Sector Relations Relations Relations
Collaboration Required for policy Collaboration on consumer Cooperation or conflict

development and advocacy and regulatory depending on commitment
implementation. oversight. to consumer protection.
Legal Disputes Possible if differences in Potential cooperation in Potential conflicts due to
policy interpretation and mediating disputes. differing interests.
enforcement occur. Potential conflict if disputes
are not mediated to a
satisfactory degree.
Economic Impact Positive perception if Potential common ground if Cooperation or conflict
private sector benefits consumer interests align. based on commitment to
economically. consumer protection.
Consumer Advocacy Potential cooperation on Opportunities for Advocacy for consumer
consumer interests and engagement to ensure interests, sometimes
rights. consumer safety and quality conflicting with profit
standards. motives.
Regulatory Oversight Collaboration in Collaboration in ensuring Cooperation and potential
overseeing imported regulatory bodies effectively conflicts depending on
product quality. oversee imported goods. commitment to consumer
protection.
Transparency and Critical for fostering trust Engagement with civil Cooperation may depend on
Engagement and positive relations. society in discussions and transparency and shared
consultations can lead to a interests.
better understanding of
public interests.
Source: Consultants’ elaboration based implications of international exhaustion and the role of government, private
sector, and civil society.
The impact of international exhaustion of trademarks is multi-faceted. The balance of costs and benefits
varies based on specific market conditions, legal frameworks, and the adaptability of stakeholders in each
category.
For the government, this transition requires balancing the potential for GDP growth with challenges related
to market access and enforcement. Collaboration with the private sector and civil society is crucial to navigate
these complexities effectively. Private sector, including importers, manufacturers, value-added providers,
and exporters, faces varying outcomes. Adaptation and strategic adjustments will be key to thriving in a more
competitive environment. Consumers may enjoy increased choices and purchasing power but must remain
discerning about product quality and authenticity. The transition necessitates cooperation between key
economic agents, emphasizing collaboration, transparency, and alignment of interests.
This section hypothesized the potential impact of international exhaustion. However, the decision to change
regime must be informed by empirical analysis. The following sections of this chapter presents the economic
model and the econometric methodology used to empirically ascertain the socio-economic impact of
international exhaustion for trademarks.
5.3 The economic model
Within the context of trade policy changes, there are various approaches to modelling the socio-economic
impact. Within the context of this study, the most appropriate modelling approaches include the Computable Page | 62
General Equilibrium (CGE) model and the Partial Equilibrium (PE) model.
CGE models analyse the economy-wide impact of policy changes, such as tax reforms, trade policies, or
changes in government spending.109 On the other hand, the PE model examines individual markets' dynamics
and assesses how policy changes affect outcomes within a specified market.
To determine the socio-economic impact of the adoption of an international exhaustion regime for
trademarks, this study models the impact in accordance with PE model that analyses the gains from trade.110
The PE model examines individual markets' dynamics and assesses how price changes within a specified
market affect economic outcomes. The model quantifies the costs and benefits that emerge for society,
encompassing producers and consumers, as a response to shifts in policy.
The strength of the PE model lies in its ability to provide a clear perspective on specific market dynamics.
Nonetheless, it is imperative to recognize that the actual economic landscape is more intricate and
interconnected, necessitating the complementing of PE analysis with broader economic viewpoints when
assessing overall policy implications.
The justification for utilizing the PE model in this context is rooted in the expectation that the adoption of
international exhaustion will exert downward pressure on prices by enabling increased competition through
parallel imports. In accordance with the laws of demand and supply, the reduction in price is expected to
increase the quantity demanded, and reduce the quantity supplied.111 In this instance, it is expected that the
increase in quantity demanded will be fulfilled by the proliferation of parallel imports, and the decrease in
the quantity supplied will be incurred by trademark holders with exclusive rights to supply the Mauritian
market.
A decrease in the domestic price within a specific market leads to a reduction in producer surplus, primarily
due to the diminished price levels, which could potentially lead to producer exits if prices fall below their
production costs. On the other hand, consumer surplus expands, as consumers relish more accessible goods
and heightened satisfaction.112 To elucidate the mechanics of how costs and benefits materialize in response
to a decline in prices, a case study is presented in Figure 10.
109 Nikas, A., Doukas, H., Papandreou, A. (2019). A Detailed Overview and Consistent Classification of Climate-Economy Models. In: Doukas, H.,
Flamos, A., Lieu, J. (eds) Understanding Risks and Uncertainties in Energy and Climate Policy. Springer, Cham. https://doi.org/10.1007/978-3-030-
03152-7_1
110 While a CGE model would have provide a more in-depth understanding of the socio-economic impact, these models are complex, and require a
substantial timeline to develop. The starting point of CGE analysis is Social Accounting Matrix (SAM). Although Statistics Mauritius has constructed a
SAM, the focus of this project – on trademarks – implies that conducting CGE analysis would require the development of a customized SAM, i.e.,
one which accounts for the economic contribution of trademark holders. This requirement makes the deployment of a CGE model even more time
demanding than it otherwise is and, thus, not applicable for this study.
111 N. Gregory Mankiw, Principles of Microeconomics (8th edition). Cengage Leaning: Boston.
112 It is essential to bear in mind that this analysis is localized to the market under investigation and does not encompass broader economic
consequences, such as interactions with related markets or the influence of other economic variables like employment; Consumer surplus
represents the benefit that consumers receive when they can purchase a product at a price lower than the maximum price that they are willing to
pay. It is a measure of the economic well-being and satisfaction that consumers derive from the consumption of goods and services. It is calculated
as the area under the demand curve, above the price. Producer surplus is a similar concept that represents the benefit that producers (i.e.,
suppliers or sellers) receive when they sell a product at a price higher than their minimum acceptable price for putting the price on the market. It is
a measure of the economic well-being and profitability that producers derive from the production and sale of goods and services. It is calculated as
the area above the supply curve and below the price.
Figure 10. Gains from trade when parallel imports are allowed: A partial equilibrium analysis
Domestic Page | 63
Price
supply
.
A
P1
. . Price without
parallel imports
B D
Price with parallel
P2
imports
C
Parallel Imports Domestic

demand
Quantity
Q2 Q1 Q3
Source: Consultants’ adaptation, Principles of Microeconomics by N. Gregory Mankiw, 2018.
Before parallel imports are allowed, the market for a particular product is in equilibrium at quantity Q1, where
the market price is P1. At this point, domestic demand equals domestic supply. Consumer surplus can be
calculated by area A, while producer surplus is calculated by area B+C.
Following the adoption of international exhaustion, prices are expected to be driven down. In the above
illustration, this is represented as a downward move from P1 to P2. As per economic theory, the drop in price
increases the quantity demanded, as shown by the movement from Q1 to Q3. At the same time, the decrease
in price is associated with a reduction in the quantity supplied, as shown by the movement from Q1 to Q2.
In this scenario, parallel imports will fill the reduction in the quantity supplied, and serve the additional
quantity demanded generated by the drop in price. Consumer surplus at the new price can be calculated as
area A+B+D – indicating a change in consumer surplus by (B + D). Likewise, the reduction in quantity supplied
and the lower price results in a new producer surplus equal C, indicating a change in producer surplus of (-
B).
The net effect to society resulting from the reduction in prices – due to increased competition from parallel
imports – is, thus, area D.113 The positive value of the total effect signifies that society is better off with the
reduction in prices. A similar result in the empirical analysis undertaken in this study would suggest that the
Government of Mauritius should adopt international exhaustion for trademarks.
113 This is calculated as: Total surplus = Change in consumer surplus + Change in producer surplus; or total surplus = (B+D) + (-B) = D.
5.4 The econometric methodology
The application of the above model requires the estimation of demand and supply functions, as well as
solving for the initial equilibrium price and quantity. Initial producer and consumer surplus is calculated at Page | 64
this point.114
The model then requires the simulation of a price reduction, and the estimation of a new equilibrium price
and new quantity demanded and supplied. A new consumer and producer surplus is calculated at this point.
The changes between consumer and producer surplus for the initial price and new price will feed into the
cost benefit analysis, which will be used to inform whether trademark policy changes. The formulae for
calculating producer and consumer surplus are adapted from Applied Calculus.115
5.4.1 Demand Function

Assuming that the quantity demanded of a product depends on its own price, income, the price of
substitutes, and other factors like regulations, the demand function is specified as follows:
𝑄𝑑 = 𝑓(𝑃𝑟𝑖𝑐𝑒, 𝐼𝑛𝑐𝑜𝑚𝑒, 𝑃𝑟𝑖𝑐𝑒 𝑜𝑓 𝑆𝑢𝑏𝑠𝑡𝑖𝑡𝑢𝑡𝑒, 𝑂𝑡ℎ𝑒𝑟𝑠)
The linear demand function is specified as follows for econometric estimation.116
𝑄𝑑 = 𝛼 + 𝛽1 𝑃𝑟𝑖𝑐𝑒 + 𝜀
Where:
• 𝑄𝑑 is the quantity demanded, as approximated by the natural logarithm of domestic consumption.
• 𝑃𝑟𝑖𝑐𝑒 is the natural logarithm of the market price of the product.
• 𝛽1 is the parameter to be estimated.
• 𝛼 is the intercept.
• 𝜀 is the error term representing unexplained variation.
5.4.2 Supply Function

Assuming that the quantity supplied of a product depends on its own price, production costs, and regulations,
the supply function is as follows:
𝑄𝑠 = 𝑓(𝑃𝑟𝑖𝑐𝑒, 𝐶𝑜𝑠𝑡𝑠, 𝑂𝑡ℎ𝑒𝑟𝑠)
As in the case of the demand curve, the above model is simplified to obtain the following linear supply
function, specified as follows for econometric estimation.117
𝑄𝑠 = 𝛿 + 𝛽6 𝑃𝑟𝑖𝑐𝑒 + 𝜇
Where:
• 𝑄𝑠 is the natural logarithm of the quantity supplied.
• 𝑃𝑟𝑖𝑐𝑒 is the natural logarithm market price of the product.
• 𝛽6 is the parameter to be estimated.
• 𝜇 is the error term representing unexplained variation.
• 𝛿 is the intercept.
114
The equations for demand and supply are estimated using Ordinary Least Squares (OLS). While it is understood that there are more advanced
techniques for estimating these equations, such as Two-stage Least Squares (2SLS), the deployment of advanced techniques was impeded by the
time spent in search of complete, accurate and appropriate data.
115
Kevin Gonzales et. al.(2021). Applied Calculus (based on Active Calculus by Matthew Boelkins), https://mathbooks.unl.edu/BCalculus/index.html.
116 Variables for income and the price of substitutes were included in preliminary regressions. However, their inclusion/exclusion from the model
resulted in no meaningful change in the coefficient of the price variable. Thus, the additional variables were dropped from the regression. The plot
obtained for this demand curve is rotated 90 clockwise and flipped horizontally to obtain the model presented in the previous section.
117 The supply model has been simplified as producer costs, by product, were unobtainable. The plot obtained for this supply curve is rotated 90
clockwise and flipped horizontally to obtain the model presented in the previous section.
5.4.3 Equilibrium price and quantity
To find the initial equilibrium price (𝑃𝑟𝑖𝑐𝑒𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) and equilibrium quantity (𝑄𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ), demand and supply are Page | 65
equated:
𝑄𝑑 = 𝑄𝑠
The above equation is solved to find the equilibrium price (𝑃𝑟𝑖𝑐𝑒𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) and equilibrium quantity (𝑄𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ).
To estimate the impact of a change in price on consumer and producer surplus, a change in price is
considered. Consumer and producer surplus is calculated before and after the price change.
5.4.4 Consumer and producer surplus calculations

Initial Consumer Surplus (𝐶𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) is calculated at the initial equilibrium price and quantity. This can be
expressed as:
𝑄𝐷𝑖𝑛𝑖𝑡𝑖𝑎𝑙
𝐶𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 = ∫0 (𝑄𝑑 − 𝑃𝑟𝑖𝑐𝑒𝑖𝑛𝑖𝑡𝑖𝑎𝑙 )𝑑𝑄
Initial Producer Surplus (𝑃𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) is also calculated at the initial equilibrium price and quantity.
𝑄𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙
𝑃𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 = ∫0 (𝑃𝑟𝑖𝑐𝑒𝑖𝑛𝑖𝑡𝑖𝑎𝑙 − 𝑄𝑠 )𝑑𝑄
5.4.5 Simulation of a price reduction and calculations of new price, quantities, and
consumer and producer surplus
As parallel imports are expected to bring about a reduction in the price of trademarked products, a price
change – Δ𝑃𝑟𝑖𝑐𝑒 – is simulated. Considering the simulated reduction in price, new quantity demanded
(𝑄𝐷𝑛𝑒𝑤 ) and supplied (𝑄𝑆𝑛𝑒𝑤 ) is calculated at the new price (𝑃𝑟𝑖𝑐𝑒𝑛𝑒𝑤 ). Across all industries, a 20%
reduction in prices is simulated, as this was raised during the stakeholder consultations.
The new consumer surplus (𝐶𝑆𝑛𝑒𝑤 ) is calculated at the new price and quantity demanded, as follows:
𝑄𝐷𝑛𝑒𝑤
𝐶𝑆𝑛𝑒𝑤 = ∫0 (𝑄𝑑 − 𝑃𝑟𝑖𝑐𝑒𝑛𝑒𝑤 )𝑑𝑄
New producer surplus (𝑃𝑆𝑛𝑒𝑤 ) is calculated using the new price the new quantity supplied, which can be
expressed as:
𝑄𝑆𝑛𝑒𝑤
𝑃𝑆𝑛𝑒𝑤 = ∫0 (𝑃𝑟𝑖𝑐𝑒𝑛𝑒𝑤 − 𝑄𝑠 )𝑑𝑄
The difference between the initial and new consumer surplus (𝐶𝑆𝑛𝑒𝑤 − 𝐶𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) represents the change in
consumer surplus, while the difference between the initial and new producer surplus (𝑃𝑆𝑛𝑒𝑤 − 𝑃𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 )
represents the change in producer surplus.
To inform the policy change, the following calculation is conducted:
𝑇𝑜𝑡𝑎𝑙 𝑆𝑢𝑟𝑝𝑙𝑢𝑠 = (𝐶𝑆𝑛𝑒𝑤 − 𝐶𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 ) + (𝑃𝑆𝑛𝑒𝑤 − 𝑃𝑆𝑖𝑛𝑖𝑡𝑖𝑎𝑙 )
A positive total surplus indicates that society will be better off after the policy change, implying that Mauritius
should transition to an international exhaustion regime for trademarks. Conversely, a negative total surplus
implies that society would be worse off if international exhaustion is implemented, and that national
exhaustion should continue to prevail. This analysis is conducted for four products, one from each industry
most likely to be impacted by the transition to international exhaustion of trademarks. The entirety of this
process was conducted in the programming language for statistical analysis, R.
6. Chapter Six: Data Availability and Implications
Page | 66
As alluded to at various points throughout this paper, complete, accurate, and appropriate data was often
not available to develop the most appropriate models for a robust socio-economic impact assessment. PE
models – like the one deployed in this assignment – require, among other things, the market price (retail
price) of a particular trademarked product, the quantity of that product that consumers consumed or
purchased at the market price, and the quantity of that product that producers (sellers, suppliers, included)
put on the market at the market price. For econometric modelling, it is usual that one would require at
least 30 observations for each variable.
The Consultant made several attempts to acquire longitudinal pricing-related data from the corporate
trademark holders interviewed. Approximately 50 companies and five associations were emailed and invited
to participate in the request for information – using the format below.
Figure 11. Requested information from all private sector representatives interviewed
See Annexure for larger presentation.
Seven responses were received, of which three companies indicated that the data could be used.
Table 19. Responses from Companies

Use, and Citation of,
Organisation Stakeholders' data in Trademark
Exhaustion Report
Grays Inc. Ltd Yes
Innodis No
Quality Beverages Ltd No

Super U No
Superdist Yes
Scott Yes
Eclosia No
These companies are involved in the sale and distribution of global brands, many of which are represented
in the 440-plus trademarked goods registered at Customs. In addition, some of these companies also produce
locally and distribute local products – both food and non-food products.
Based on the information given, these seven companies employ a cumulative total of 2,494 workers, there
cumulative sales are worth MUR 11.136 billion. They cumulatively import MUR 5.086 billion and are jointly
responsible for exporting goods worth MUR 91.59 million. Together, the seven companies alone have Page | 67
invested over MUR 622 million in the Mauritian economy and have contributed MUR 17.3 million to
corporate social responsibility programmes.
The information received was insightful and helped the Consultants develop a narrative concerning the
companies representing international brands. Nonetheless, the absence of baseline information that could
be used for comparison presented challenges.
It is important to note that data deficiencies of this nature are not unique to the Mauritius study, as most of
the literature revealed this absence. Pricing strategy and related data is viewed by corporates as highly
confidential. As a result, proxies have to be used in their place.118
Efforts at pricing comparisons resulted in various spreadsheets of pricing data comparing Mauritius, South
Africa and India. The Consultants did attempt to source pricing information from Trinidad and Tobago as well;
however, this proved impossible without a consultant in that jurisdiction.
6.1 Available price data

Table 20. Pharmaceutical and Personal Hygiene Product Pricing (Mauritius, South Africa and India)
Trademark Additional info Product description Mauritius South Indian
Prices African Prices
(MUR) Prices (MUR)
(MUR)
CRESTOR Cholesterol Crestor 10mg (price per unit) 38,2609 26,0144 9,3704
DUREX Durex extra safe x3 116,45 132,7971 43,46
COLGATE COLGATE TOTAL 75ml 96,5 137,3771 573,5925
TOTAL
HIMALAYA & Himalaya Natural Glow Fairness Face 249,5 114,4771 74,2
LOGO Wash 100ml
BRUFEN Brufen 200mg per unit 6,59 8,2669 0,41552
EFFERALGAN VITAMIN C Efferalgan Vitamin C 500/200 X 2 X 8 4,44 0 0
per unit
POLYSILANE POLYSILANE UPSA Polysilane sachets per unit 17,27 0 0
SANDOZ Cardiovascular/HBP SANDOZ ATENOLOL 100MG TAB per 5,59 5,8853 0
unit
GAVISCON Antacid Plus liquid peppermint 150ml 156,15 320,6 86,0508
NUROFEN pain killer Nurofen 200mg x24 per unit 6,21 6,773629 3,3125
STREPSILS STREPSILS STREPSILS SUGAR FREE STRAWBERRY 290 206,0771 0
Note: Zeros refer to instances in which data could not be obtained.
118 The specific data is outlined in Annexure 2 and Annexure 3.

Table 21. Pricing - Alcoholic Beverages and Energy Drinks (Mauritius, South Africa and India)
Product description Mauritius South African Indian Prices
Prices Prices (MUR) Page | 68
(MUR) (MUR)
Johnnie Walker Red Label 70cl 1 650,00 526,6771 1192,50

Blended scotch 70cl 919.95 409,91 611,02
London Dry Gin 70cl 1 500,00 778,5771 712,33
London Dry Gin 75cl 1 225,00 435,0771 509,08
London Dry Gin 77cl 1 050,00 732,7771 780,50
40g/42g fruit chutney/cheese/sweet paprika 49,00 45,7771 106,00
Malibu 70cl 489,95 457,9771 611,02
Chivas Regal 12 years old 1L 2 550,00 959,51 0,00
Jameson Irish Whiskey 70cl 1 699,95 904,5271 780,50
Red Bull Energy Drink Sugar Free 250ml 67,00 40,075 66,25
Table 22. Textiles Pricing (Mauritius, South Africa and India)

Trademark Product description Mauritius South African Indian Prices
Prices Prices (MUR) (MUR)
(MUR)
BOSS HUGO BOSS LOGO-PRINT POLO SHIRT IN 4 400,00 4 351,00 4 346,00
OXFORD COTTON PIQUÉ, grey
IPANEMA Ipanema Chain Thong Sandals 950 799,21 741,47
RIDER Rider men slipper black 900 824,38 794,47
Jumping PUMA Electrify NITRO Men's Running 6 705 4 577,71 5 829,47

Shoes
LACOSTE Lacoste Women's Short Sleeve Slim 5 186,00 5 713,55 2 941,50
Fit polo shirt
Mango Medium-rise flared jeans 2 699,00 2 974,71 2 909,70
Table 23. Pricing of Renault Spare Parts (Mauritius, South Africa and India)
Description Price in Mauritius (MUR) Price in South Africa Price in India (MUR)
(MUR)
BRAKE PAD 3668,13 4053,35 802,14
REAR BRAKE SHOE COLLAR 5531,5 5367,56 802,14
BOSCH 8''
CLUTCH COLLECTION 17500,37 9883,05 5347,59
CLUTCH RECEIVER 7442,23 6073,14 Not Available
CABIN FILTER 1840 783,91 962,57
OIL FILTER 839,5 433,12 213,90
AIR FILTER 1000,5 751,21 267,38
Given the data constraint associated with this assignment, some broad assumptions have been made:
• The market is supplied solely by imports of the product under examination.
• Demand (domestic consumption) is equivalent to imports of a product minus its exports.
• The market price of the product is equivalent to its import price inflated by the real interest rate. Page | 69
• Producers are assumed to be trademark holders.
• The data are assumed to be stationary.119
• Endogeneity is not present.120
6.2 Assessment of sector-level impacts: How will markets shift under

different scenarios?
To complement the approach outlined in section 5.3 and 5.4, this section of the report expands on the PE
analysis to model the general direction of the markets under investigation.
Methodology
The modelling system comprises of a set of partial equilibrium models for specific commodity and product
sectors. The models are all similar in that they are based on a system of equations representing individual
components of supply and demand in each sector, designed to incorporate the major economic, trade and
policy relationships within these markets. The individual models are a combination of econometric
estimation and calibration based on literature and analyst judgement. The level of detail varies by product,
with the scope and calibration possibilities dependant on data availability. A typical partial equilibrium
commodity model is based on the principle where a market clearing price equates total supply and total
demand.
• Total supply consists of beginning stocks plus imports plus production.
• Total demand consists of domestic consumption plus exports plus ending stocks.
The model assumes the import parity price as a proxy for domestic price, with the local supply and demand
dynamics having a relatively marginal impact on the local price. Figure 12 illustrates a partial equilibrium
framework that has been applied to the analysis.
Figure 12. Flow diagram of the partial equilibrium framework
Consumption
Production
TOTAL DOMESTIC
PRICE
SUPPLY DEMAND
Imports Exports
Exchange Transaction Trade World

rate costs policies Price
119 Due to the time constraint, stationarity and/or cointegration testing – as is protocol when dealing with time series data – and advanced time
series estimation techniques could not be conducted.
120 Models in which variables are being determined simultaneously – like price in this instance – run the risk of being plagued with endogeneity (or
an explanatory variable is correlated with the error term). This assumption is made as the time constraints prevented the deployment of techniques
to correct for this issue.
The components outlined in Figure 12 of the model contain a set of simultaneous equations which solve for Page | 70
an equilibrium price in each market. In each market, a system of behavioural equations derived from
Generalised least Squares (GLS) and Ordinary Least Squares (OLS) are estimated. Having estimated the
equations, the simulation model was thus constructed in an EXCEL spreadsheet, calibrated to the base year
2000 and then validated by examining its predictive ability for the period between 2003 and 2021. To enable
the generation of a baseline, the model required to be ‘solved’ in EXCEL.
In that sense, a relatively uncomplicated set of partial equilibrium models are developed to simulate
scenarios that capture the impact of international exhaustion regimes for trademarks. The system of models
developed are essentially annual models, and because no significant levels of product can be kept in stock,
no ending stock equations are estimated. Furthermore, no distinction is made between different
consumption levels and only one equation is estimated to capture the total domestic use. Although imports
are relatively small compared to exports, equations are estimated for both exports and imports.
Supply
While individual sector models differ somewhat in structure, what is common is that Mauritius does not have
significant, if any, local production, and therefore relying predominantly on imports to supply its domestic
market. The trends in import quantities reflect are typically determined by returns to the sector (which
encompasses import price and input costs), along with the brands that command price premiums in the
market. Given that the Mauritian sectors are small in the global context, the market prices are determined
from a combination of import (or export) parity levels.
Demand
The demand component consisted of human consumption, exports (excess demand), and retained stock.
Data on exports is inaccurate, and data on consumption had to be drawn from estimated per capita
consumption based on population trends and stock in the market. Meanwhile, retained stock was largely the
stock for and taken as the remainder of the balance between supply and demand.
Prices
The proposed pricing model gives a relatively straight forward price determination mechanism that can be
used to estimate market outlooks in the various sectors. Time series for product prices were difficult to get,
and therefore, the analysis resolved to use import parity prices as a proxy for market prices. While this is not
ideal, it served to be the only feasible way to determine prices, particularly given that Mauritius is a net
importer for the products considered in the analysis. In this sense, partial equilibrium modelling becomes a
uniquely useful way of analysing how the sectors discover prices. The strength of partial equilibrium
modelling as a way of understanding the sectors lies in the empirical simplicity of the analysis, and how it can
be used to reasonably approximate the general effects of policy and price changes.
Important to note however, is the fact that the results were examined for consistency with a priori knowledge
on Mauritius’ demand and trade conditions. At the researcher’s judgement and discretion, and from
literature which provided general information, market knowledge was incorporated into the projection
results. The consistency of the projection results was examined mainly by comparing the net trade position
projected by production, demand, and trading for cotton with the actual export and import differences.
Data
The partial equilibrium structure implies that the models take macro-economic projections, world market
prices and policy assumptions as exogenous. Macro-economic views are based on those published in the
latest World Economic Outlook from the International Monetary Fund, complimented by in country
information. World prices for the products are not readily available from specific data sources, and re derived
from the International Trade Centre (ITC), and the United Nations (UN) Department of Economic and Social
Affairs, whose Population Division provides data on population projections that guide future consumption Page | 71
trends. Policy assumptions are based on information from country reports and country analysts.
Model assumptions
The baseline presented here is an outlook of the whisky and pharmaceuticals market and prices for the period
2022 to 2028 (see Table 24). This outlook is based on assumptions about a range of economic, environmental,
political, institutional, and social factors. The assumptions form the operational environment in which
markets will function. The scenarios under which the outlooks are model are presented in Annexure 8.
Table 24. Assumptions of macro-economic variables

Variable Source Units 2023 2024 2025 2026 2027 2028
GDP IMF USD Billions 16,11 17,30 18,15 18,88 19,56 16,11
Population UNESA Millions 1,301 1,302 1,303 1,304 1,305 1,305
Exchange rate IMF MUR/USD 46,27 46,74 47,41 48,31 49,41 46,27
CPI: Food IMF Index 140,69 151,11 158,52 165,01 171,10 140,69
Real GDP/Capita IMF USD 12 773 13 724 14 394 14 973 15 515 12 773
Inflation rate IMF % change 132,11 140,69 151,11 158,52 165,01 171,10
Source: Consultants’ tabulation using data from various sources.
A case study of whisky

The whisky market is of particular interest given its structure, conduct and performance. It is a sector that is
predominantly characterised by trademarks and price differentiation. It therefore lends itself to quite a rich
illustration of how the trademark regimes can fundamentally shift market trends and behaviour. With limited
data, we were, however, able to establish the size of the market, and the average price trends over time.
Before the COVID-19 pandemic, we estimate that Mauritius consumed an average of just under 1.4 million
litres of whisky per year. It has been a growing market, increasing from 965,000 litres in 2003 to just over a
million litres by 2020 – which represents a growth of 4.2% over the period. We envisage that Mauritius does
not produce whisky per se but does proprietary blending using imported whisky to produce specialty whisky
blends that are consumed locally and exported (see Figure 13). By our estimates, we believe that 63.4% of
all imported whisky ends up in blended facilities for processing. However, in 2021, the share of whisky volume
blended relative to imports fell to 19%, presumably due to the impact of the COVID-19 pandemic that slowed
down imports, disrupted supply chains, and slowed down business activity.
Figure 13. Trends in whisky production and trade (2006-2021)
1200 000
Page | 72
1000 000
800 000
Litres
600 000
400 000
200 000
2019
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2020
2021
Imports Production Exports
Source: Consultants own computations based on various sources
Having established the size and composition of trade relative to the overall market, the whisky displayed a
unique trend in prices. Before 2006, domestic prices were below export parity levels, meaning that despite
being a net importer, the market enjoyed some efficiencies. It is important to note that during that period,
we picked up appreciable volumes of excess whisky stock on the market – ranging between 216,000 litres
and 514,000 litres – which possibly depressed prices significantly. It is not clear what gave rise to this
anomaly, but it could’ve been over-stocking in warehouses by key players in the market.
From 2006 onwards, prices shifted from an export parity to an import parity regime, which was more
consistent with the market structure. As a relatively small economy in the global market, the expectation is
that Mauritius is a price taker, and its prices would track or trade close to import parity price levels. From
2014-16, however, there was an apparent break in the correlation in local and global prices. There are several
reasons that could explain this structural break – first, it appears from data a growing tourist population may
have begun to drive higher prices through high demand. In 2016, the population of tourist arrivals surpassed
the local population for the first time – and this was the case all the way until the COVID-19 pandemic hit in
early 2020. A second reason could be the escalating duties on whisky which pushed up prices significantly.
Excise duties increased by 10% in the 2016/17 fiscal year, and a further 5% in the 2017/18 fiscal year. The
2021/22, 2022/23 and 2023/24 fiscal years have also seen respective 10% increases in excise duties, and with
producers and importers passing down the cost, added to the ever-increasing whisky prices in the local
market (see Figure 14 below).
Figure 14. Whisky price trends – 2003-2028
Whisky Price Projections - 2023-2028

14,00 Page | 73
Up until
2006 Prices were at import parity
12,00 whisky and were consistent with Mauritians
prices global market prices paying a 41%
were premium on
10,00 below whisky prices
export
US$/litre
parity
8,00
6,00
4,00
2,00
2013
2026
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2027
2028
Export Parity Price Import Parity Price
Local Weighted Price Local Weighted Price: Scenario
Source: Consultants own computations based on various sources
In Figure 14, we show two key scenarios. The first scenario is the baseline – which is a “business as usual”
case where the market continues under the current trademark regime of national exhaustion. In this
scenario, we foresee average whisky prices remaining high above US$12.00/litre over the next five years (see
“locally weighted price – baseline”. Important to note that whisky prices under this scenario will be at least
40% above import parity prices, meaning that Mauritian consumers and tourists are paying a high premium
on locally produced or imported whisky.
In an alternative scenario, where an international trademark exhaustion regime is applied, we foresee a

situation in which prices decline considerably to under US$9.30/litre, as competition from new entrants puts
downward pressure on prices. This downward pressure on prices, coupled with squeezed profit margins will
see the overall whisky market shrinking by about 11%, as importers and local blenders reduce volumes to
optimize resource allocation. Imports will decline by between 187,000 litres and 222,000 litres per year, and
most local whisky blended volumes will continue to decline by between 115,000 litres and 145,000 litres per
annum. Whisky exports will fall by between 40,000 and 50,000 litres per year, on average, as producers look
inward to recover margins from relatively small volumes of high-end premium whisky brands that could fetch
higher prices from tourists and wealthier local consumers.
Table 25. International Trademark Exhaustion Scenario: Impact on the whisky market (2022-2028), Absolute
change from the baseline
2022 2023 2024 2025 2026 2027 2028
Production -115 -126 -130 -134 -138 -142 -145
(litres) 700,43 776,37 486,01 992,40 690,89 128,07 464,12
Imports (litres) -186 -203 -207 -212 -216 -219 -222
915,07 167,26 120,65 252,20 029,43 333,44 422,21
2022 2023 2024 2025 2026 2027 2028
Exports (litres) -40 478,94 -43 670,50 -45 082,84 -47 682,81 -48 940,05 -49 739,52 -50 339,98
Consumption -146 -159 -162 -164 -167 -169 -172
(Litres) 436,13 496,75 037,81 569,39 089,37 593,91 082,23 Page | 74
Local Weighted
-143,46 -146,14 -150,23 -151,75 -153,95 -156,86 -160,43
Price (MUR/litre)
Source: Model results
Declining prices may be of immense benefit to consumers, but declining market volumes will become a cause
for concern. A shrinking market because of low prices from intense competition may require government to
consider further policy reforms, beyond the adoption of international trademark regime, that could
essentially keep the whisky market reasonably profitable, to ensure long term sustainability of the local
blending industry and exports. Government could consider revising excise duties downwards, if they adopt
international exhaustion regime, as a means of ensuring that proprietary blending can remain profitable. The
recommendation from the analysis, therefore, is that in the whisky market, an international trademark
exhaustion regime can bring more benefit if it is coupled with further tax reforms that can enable importers
and local blenders to remain viable.
Revenue Implications
The likely scenario modelled in here sees an international trademark exhaustion regime impacting prices
negatively by an average of 26% over the period 2022-2028. These price declines translate to considerable
revenue implications. For instance, an international trademark exhaustion regime would see sector wide
revenue of MUR397 million in 2024, compared to MUR537 million with the existing national trademark
exhaustion regime (see Table 26).
Table 26. Revenue implications of International Trademark Exhaustion Regime: Differences in revenue in the
whisky market (2022-2028), (MUR Millions)
2022 2023 2024 2025 2026 2027 2028 Total
“Business as usual” 437.1 494.8 537.1 571.0 599.6 628.8 660.3 3 928.6
Scenario: International Exhaustion Regime 324.6 364.1 396.8 422.1 443.5 465.4 489.1 2 905.6
Revenue Loss 112.6 130.7 140.2 148.9 156.1 163.4 171.2 1 023.0
Source: Model Results
Overall, the whisky industry is set to lose an average of MUR146 million per annum over a period 2022-2028.
All in all, the model estimates that an international trademark exhaustion regime would reduce sector
revenue by a cumulative MUR 1 billion between 2022-2028, emanating from reduced prices, and declining
blended volumes, and the shrinking market for whisky. To ensure sustainability and avert the predicted
decline, or at the very least halt the regression, it would be important for government to put in place some
additional measures such as tax incentives, rebates that can encourage local blending, among other policy
interventions.
Pharmaceuticals Sector - A case of Therapeutic and Prophylactic Medication

We consider a specific sub-set of the pharmaceuticals to illustrate how the international trademark
exhaustion regime could variably affect sectors. Overall, the pharmaceutical industry is primarily involved at
wholesale importation and distribution, as well as retail distribution of medicines. On the evidence of data
gathered, there is no pharmaceutical manufacturing company that produces therapeutic and prophylactic
medication. Therefore, the sub-sector relies entirely on imports for its supply. By our estimates based on
triangulation of data from sources and market balance sheets, Mauritius consumed an average of 4114 tons
of therapeutic and prophylactic drugs between 2004 and 2021, while importing 4347 tons over the same
period. We further see that in any given year, there is a residual stock of drugs – ranging from as low as 13
tons to as high as 132 tons of medication that is in the market, either carryover stock or stock that is retained
for purposes of dispensing on emergency basis.
Interestingly, Mauritius also exports therapeutic and prophylactic medication despite not having any local Page | 75
production facilities. The country exports an average of 330 tons of therapeutic and prophylactic drugs per
annum. We assume that this is imported medication that ends up being re-exported to other countries –
whether the re-exports are intentional or are opportunistic was not immediately clear. However, the
consistency in trends suggests that there might be established regional supply chains where therapeutic and
prophylactic drugs are routed through Mauritius. Exports are not a significant portion of the overall market,
averaging 8% of the Mauritian total market size (see Figure 15 below).
There are a few unique characterises of therapeutic and prophylactic medication that make them a unique
but rich illustration for trademark regime shifts. First, they are products with little to no substitutability. Drugs
for heart condition and high blood pressure cannot be used to treat other health conditions, and vice versa.
Therefore, following increases in the price of a drug to lower blood pressure or treat heart conditions, users
would not shift to other drugs than those meant to treat the same. This means that prices for therapeutic
and prophylactic medication are relatively inelastic, and the implications is that demand for drugs will likely
not change significantly with price increases – but only if incomes remain high, and the greater population
can reasonably absorb higher drug prices.
Figure 15. Trends in trade and consumption of Therapeutic &and Prophylactic Medication, 2003-2021
7 000
6 000
5 000
4 000
tons
3 000
2 000
1 000
-
2012
2003
2004
2005
2006
2007
2008
2009
2010
2011
2013
2014
2015
2016
2017
2018
2019
2020
2021
Consumption Imports Exports
Source: Consultants computation based on various sources
The second market characteristic that is important is that, while the number of wholesale pharmacies
increased from 24 in 2010 to 40 by 2019, the top four companies supplied more than 70% of the market. This
means that the market is relatively concentrated (Competition Commission, 2021)121 With that in mind, we
note that factors such as licence requirements, full-time pharmacists in charge, warehousing infrastructure,
safe handling storage and distribution facilities for pharmaceutical products, and other operating conditions
do not appear to be constraining factors for potential entry into the market Competition Commission, 2021).
121 https://competitioncommission.mu/wp-content/uploads/2021/06/MS004-FullReport-080621.pdf
Generally, pharmaceutical products were thereby classified as a “controlled good” for which the responsible
Minister may determine the maximum mark-up. The Price Fixing Unit of the Ministry of Commerce and
Consumer Protection is the relevant body responsible for controlling the prices of pharmaceutical products
in Mauritius (Competition Commission, 2021). Thus, the wholesale and retail components of pharmaceutical Page | 76
products prices are regulated by establishing maximum allowable mark-ups, and this pricing system is
designed to ensure affordable pharmaceutical products while allowing room for wholesalers/retailers to
cover relevant costs and earn reasonable profit margins.122
Figure 16 computes the cost build-up of prices for therapeutic and prophylactic medication over time, using
the price fixing model adopted in the sector, while providing a weighted average of the prices for both heart
conditions and high blood pressure. The price trend shows three distinct periods of price movements as
follows:
▪ Period 1: pre 2010 – where weighted average prices effectively traded below export parity prices,
despite Mauritius being a net import market. It is not clear why this is the case, but it could be either
over-stocking of medication that is kept in warehouses, as the model reflected these in the supply
and demand balance sheet. Alternatively, it could be a data discrepancy that may have under-valued
domestic prices.
▪ Period 2: 2011-2020 – which saw domestic prices swing between import parity and export parity
regimes, and this switching reflects the growing dynamism in the market saw a growing number of
new players in the wholesale (and retail) market segments. As already discussed, wholesalers
increased from 24 in 2010 to 40 in 2019 – and the increased competition could’ve led to more price
movements within the import-export parity band.
▪ Period 3: post 2020: where prices were rising above import parity, against the backdrop of increasing
global prices for therapeutic and prophylactic drugs.
122 Ibid.
Figure 16. Weighted average price trends: Therapeutic &and Prophylactic Medication – 2003-2021
140,00 Page | 77
Local prices traded below
export parity despite a Local prices switched
net import market between import & export
120,00
regime. parity market regime.
100,00
Prices (US$/kg)
80,00
60,00
40,00
Local prices trading
above import parity.
20,00
-
2006
2007
2008
2009
2010
2003
2004
2005
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Import Parity Price US$/kg Export Parity Price US$/kg Domestic Price US$/kg
Source: Consultants computation based on various sources
Using the same baseline assumptions from Table 24, we show how the pharmaceutical market for
therapeutic and prophylactic medication would look like over the near term. Under the existing policy and
macro-economic environment, wholesale prices for drugs will continue an upward trajectory, from 2022
onwards, from the 2021 peak of US$119.33/kg. From 2022, prices will grow from US$97.89/kg to
US$114.63/kg in 2028. Under this business-as-usual case scenario, the imports of therapeutics and
prophylactic drugs will progressively decline from 4 963 tons in 2022 to 3 376 tons in 2028 – a decline of 32%.
Consumption will fall from 4688 tons in 2022 to 3100 tons in 2028, under a “business as usual scenario”. Re-
exports of therapeutics and prophylactic drugs will hold steady at levels of between 275 tons and 279 tons
over the outlook period (see Figure 17 below). In the outlook period, we assume that residual stock is null,
given the lack of clarity regarding what drives stocking and warehousing decisions. We also assume that since
it is 8% of total market volume, it can be deemed to be not significant enough to move average market prices.
So, in a business as usual (i.e., national trademark exhaustion regime), wholesalers’ and retailers’ retained
stock is either null or insignificant.
Figure 17. Market Outlook for Therapeutic &and Prophylactic Medication, 2010-2028
7 000 140,00 Page | 78
6 000 120,00
5 000 100,00
Consumption (tons)
Prices (US$/kg)
Trade (tons)
4 000 80,00
3 000 60,00
2 000 40,00
1 000 20,00
- -
2020
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2021
2022
2023
2024
2025
2026
2027
2028
Imports Consumption Exports Wholesale Prices Import parity Export parity
Source: Model Results
In an alternative scenario of an international exhaustion trademark regime where new entrants come into
the industry, the further increase in competition will expectedly bring some price movements, but within the
framework of the government’s fixed price system which will ensure that the market remains viable for both
wholesalers and retailers alike. Therefore, the entrants of new players over the past decade or so may have
already pushed the market to a point where further shifts are likely to yield further significant price effects
which largely benefit consumers. Table 26 outlines shows the absolute impact of an international trademark
exhaustion regime, where the import parity prices decline by between 1 and 2% from the cost-based mark-
up pricing model that is consistent with regulated pricing framework.
Table 27. International Trademark Exhaustion Scenario: Impact on the pharmaceutical market for
therapeutics and prophylactics 2022-2028), Absolute change from the baseline
2022 2023 2024 2025 2026 2027 2028
Imports (tons) 107,8 221,8 342,4 469,8 604,3 746,0 895,2
Consumption (tons) 106,4 218,9 338,0 463,8 596,5 736,4 883,7
Exports (tons) 1,4 2,9 4,4 6,1 7,8 9,6 11,5
Prices (US$/kg) -1,07 -2,20 -3,40 -4,65 -5,98 -7,38 -8,85
Under an alternative international trademark exhaustion regime framework, the market will increase imports
by 4.7% in 2023, but the impact will be largest in 2028, where imports will likely increase by 26.5% (895 tons).
Meanwhile, consumption will grow by 28.5% in 2028, or 883 tons, while imports will increase by 11.5 tons.
More significant impacts in prices will be noticed from 2025 onwards, where the average prices for
therapeutics and prophylactics will decline by as much as US$4,65/kg on average that year, with progressively
larger declines up to 2028. These price shifts are largely dependent also on the movement of global prices,
which in the case, we assume might tapper off over the period 2022-2028.
Revenue Implications
Unlike the whisky market which shows declining revenue under an international exhaustion regime, the Page | 79
pharmaceutical market for therapeutics and prophylactics actually shows some decent market growth over
the period 2022-2028 – growing by an average of US$38 million per annum in revenue. Overall, the market
revenue will increase by a cumulative 263 million by 2028 (see Table 27 below).
Table 28. Revenue implications of International Trademark Exhaustion Regime: Differences in revenue in the
pharmaceutical market for therapeutics and prophylactics 2022-2028 (USD Millions)
2022 2023 2024 2025 2026 2027 2028 Total
Baseline: Business as usual 531,6 523,5 513,1 499,9 483,5 463,6 439,9 3 454,9
International Exhaustion Regime 537,7 537,1 535,9 533,5 529,9 525,0 518,7 3 717,8
Revenue Gain 6,1 13,6 22,7 33,6 46,5 61,5 78,8 262,9
It’s important to stress, however, that the growth in revenue is anticipated to come from increased prices,
rather than growth in volumes of product imported. The regulated price mechanism will likely play a key part
in ensuring the viability of imports, and the sustainability of the sector over the medium to long term.
However, weakening demand will be a key issue going forward, as therapeutics and prophylactics are
increasingly priced beyond the reach of the poor.
The varying outcomes between the whisky market and medications market, i.e., revenue reduction and
revenue increase, respectively, underscores the notion that parallel imports will affect individual markets
differently. It is, therefore, recommended that the adoption of international exhaustion be implemented
with due consideration to the impacts by industry, as the revenue impact of its adoption is not overarching.
7. Chapter Seven: Recommendations
Page | 80
From the literature consulted and the case studies presented, there seems to be a lag time for international
exhaustion to begin making a positive impact on the economy. This often results from the reluctance of brand
holders to embrace the new trademark exhaustion regime.
Since international exhaustion of trademarks has been on the policy agenda for nearly 20 years, at some
point this policy option will be likely for the reasons enumerated in the report. International exhaustion can
significantly impact trademark holders when they have not prepared for, or adapted their business strategies
to, accommodate the changes. Some strategies they might consider are included below.
7.1 Preparing innovative business strategies for international exhaustion

▪ Product Differentiation: Accentuating the value-addition of product features, quality, or bundled
services to be visible and justify a premium price in the market.
▪ Brand Loyalty: Developing strong relationships with your customer through rewards and consumer
loyalty programmes.
▪ Brand Experience: Creating a full brand experience beyond simply the product – for instance, test-
drive days for the automotive sector, free blood pressure checks in the pharmaceuticals, or a visiting
sommelier in the beverages sector.
▪ Differential Product-to-Pricing Strategy: Adjust pricing strategies based on different consumer
markets- even within the same retail location.
▪ Legal Support and Collaboration: Invest in legal strategies and collaboration with Police and Customs
to protect against unauthorized imports.
▪ Regional and International Alliances: With Mauritius making strong moves in the international
market, many African companies and associations are reaching across borders to forge partnerships
in neighbouring countries within their regions and across the African continent. By using African
regional blocs for engagements and negotiations with larger players Mauritian businesses can create
more favourable relationships with their counterparts, for instance in like the US, UK and the EU.
7.2 Policy, legislative and regulatory recommendations across sectors

▪ Sector by sector examination of legal and regulatory changes required to adopt international
exhaustion. This study has done a preliminary assessment.
▪ Inclusion of a sectoral regulatory impact assessment for any legal changes (including regulations).
▪ Inclusion of a sectoral socio-economic assessment for any legal regulatory changes that will have
stakeholder impact.
▪ Capacity development for existing and new officials engaged in enforcing increased importation
expected from international exhaustion.
▪ Establishment of multi-agency (ministerial), multi-disciplinary enforcement unit against counterfeits
and to ensure compliance.
To prevent profiteering by parallel importers and to ensure that lower prices are passed on to consumers,
several measures can be considered:
• Implement mechanisms to monitor prices and enforce transparency in markets. This would require
the regularly tracking and comparing of prices to identify instances of unjustified price increases.
• Enact or strengthen legislation that prohibits price gouging or unjustified price increases. This
would require the establishment of clear criteria and penalties for violations to deter parallel
importers from engaging in profiteering.
• Enforce regulations that control the entry of parallel importers into the market. Page | 81
• Require parallel importers to meet certain criteria or obtain licenses to ensure they adhere to fair
pricing practices.
• Educate consumers about the potential benefits of international exhaustion in terms of lower
prices and encourage them to make informed choices and report instances of unfair practices.
• Foster collaboration between intellectual property offices, competition authorities, and consumer
protection agencies to address profiteering issues. This would require efficient communication to
identify and respond to unfair practices promptly.
• Conduct regular reviews of policies and regulations related to international exhaustion. As
required, adjust measures to address emerging challenges and ensure that they remain effective in
preventing profiteering.
Implementing a combination of these measures can help create a regulatory framework that balances the
interests of intellectual property rights holders, parallel importers, and consumers while discouraging unfair
profiteering practices.
7.3 Recommendations for the pharmaceuticals sector

▪ Proactive and prepared approach for pharmaceutical companies facing the challenges posed by
international exhaustion of trademarks.
▪ Strong enforcement of regulations, ensuring a level playing field for all stakeholders involved. The
industry should prioritize the development and implementation of rigorous systems to check and
test the quality of products entering the market, emphasizing safety and efficacy.
▪ Open communication and transparency including with regard to shortcomings or product safety
issues are necessary to maintain public trust.
▪ For traceability of product sourcing, robust collaboration with regulatory authorities from the
country of origin is essential.
▪ Investment in qualified officers capable of conducting thorough Quality and Safety Audits of
warehouses and distribution facilities, enabling them to propose and implement remedial actions as
needed.
7.4 Recommendations for the clothing and textiles sector

▪ Businesses should focus on strengthening intellectual property protection through legal frameworks
and enforcement measures.
▪ Effective supply chain management and brand building can mitigate the business risks posed by
parallel imports.
▪ Engaging in public awareness campaigns to educate consumers about the risks, monitoring
international pricing strategies, and fostering collaboration within the industry are crucial.
▪ Leveraging technology for traceability, adapting business models, and staying vigilant about market
trends will help businesses proactively respond to the challenges associated with parallel imports.
7.5 Recommendations for food and beverages sector

▪ Strong emphasis should be placed on reinforcing internal quality control measures to ensure product
consistency and safety.
▪ Investment in advanced testing technologies for both raw materials and finished goods. Companies
should establish a dedicated team to monitor and ensure compliance with international regulations
governing the food and beverage sector.
▪ Transparent labelling practices, incorporating detailed information about sourcing, ingredients, and
nutritional content, should be implemented to enhance consumer trust.
▪ Collaborative efforts with regulatory authorities in different countries are crucial for staying ahead
of changes in policies and ensuring compliance. Page | 82
▪ Developing robust systems for traceability throughout the supply chain, from sourcing to
distribution, is essential. This involves fostering strong relationships with suppliers who adhere to
ethical and sustainable practices.
▪ Training personnel in quality control and safety measures, as well as developing a team of qualified
officers for facility audits, will further contribute to overall preparedness.
7.6 Recommendations for the automotives sector

▪ Understanding the difference in consumer transportation needs with a focus on environmental
awareness to automotive contribution to greenhouse gas GHG emissions.
▪ The state would benefit from higher sales and taxes where authorised dealers should cater to
service-sensitive customers, and parallel traders should cater to bargain hunters, emphasising the
argument that there is sufficient space for both.
▪ Authorised dealers should focus on the “experience” and “services” aspects, as well as on safety.
▪ There may be opportunities for arbitrage even for authorised dealers in the auto component aspects
for maintenance and service, as these are genuine parts.
▪ Automotive parts are perceived to be unattributably highly priced in Mauritius, and this perception
can be addressed with cautiously applied parallel importation (using the manufacturers’ strategies).
8. Concluding Chapter
Page | 83
Should the Government of Mauritius, move with the policy transition from national exhaustion of trademarks
to international exhaustion, it is recommended that a comprehensive sector-by-sector examination of the
necessary legal and regulatory changes be undertaken. A preliminary assessment study has been conducted
to identify the specific legal modifications required for each sector. In addition, it is crucial to incorporate a
sectoral regulatory impact assessment for any proposed legal changes, including the formulation and
adjustment of regulations. This assessment will provide insights into the potential effects on industries,
ensuring a thorough understanding of the implications for stakeholders. Furthermore, a sectoral socio-
economic assessment should be integrated into the evaluation process to gauge the broader economic and
social impact of regulatory changes, especially those with direct implications for each stakeholder group.
Clear recognition must be given to those businesses involved in manufacturing in Mauritius, with a view to
providing support for them to advance in value addition to eventually play an important role in exports. The
African and international trade and investment partnerships that the Mauritius government has led can play
an invaluable role in the creation of regional and global value chain development with Mauritius developing
its industrialisation capacity – with a strong adherence to environmental sustainability, digital transformation
and socio-economic priorities.
Recognizing the anticipated increase in importation resulting from international exhaustion, capacity
development initiatives should be implemented for both existing and new officials involved in enforcing
these changes. Training programs, including those accredited by the World Customs Organisation, can help
ensure that officials are well-equipped to handle the complexities associated with expanded importation
under the new trademark regime.
To enhance enforcement measures and promote compliance, the establishment of a multi-agency, multi-
disciplinary enforcement unit is advised. This unit, comprising representatives from various ministries and
disciplines, can effectively combat counterfeit activities and enforce adherence to the new trademark
regulations. Such a collaborative approach ensures a holistic strategy to address the challenges associated
with the shift to international exhaustion, fostering a regulatory environment that is both robust and
adaptable to the needs of diverse sectors.
In essence, the transition from national to international exhaustion of trademarks demands a meticulous and
sector-specific approach to legal and regulatory adjustments. The preliminary assessment, emphasizing
sector-by-sector examination, serves as a foundational step in identifying the nuanced modifications
required for each industry. The inclusion of comprehensive sectoral regulatory impact and socio-economic
assessments is imperative for a holistic understanding of the implications on stakeholders and industries.
Recognizing the forthcoming surge in importation, capacity development initiatives for officials become vital,
ensuring their adeptness in navigating the complexities of the evolving trademark regime. To fortify
enforcement measures and instil compliance, the establishment of a collaborative multi-agency, multi-
disciplinary enforcement unit is recommended. This approach ensures a unified strategy to counter
counterfeiting and uphold adherence to the new trademark regulations, fostering an adaptable and resilient
regulatory environment tailored to the diverse needs of different sectors.
Disclaimer
Page | 84
The report was commissioned by the Commonwealth Secretariat and conducted by Tutwa Consulting Group.
The report is for informational purposes and is based on the authors’ (Tutwa Consulting Group) analysis,
opinions, and assumptions, which may not be accurate, complete, or current. Every effort has been taken by
the Consultant to use a variety of sources and to fact-check; nonetheless the report may contain errors,
omissions, or inaccuracies, and may contain forward-looking statements, projections, or estimates, which are
subject to uncertainties and risks, and may differ materially from actual results, outcomes, or events. The
report is not endorsed by or affiliated with any third-party organization, institution, or entity.
Annexures
Page | 85
Annex 1: Mauritius trade agreements
Trade Agreement Description
Multilateral Trade Agreements
World Trade Organization (WTO) Mauritius has been a member of the WTO since its inception
in 1995 and is part of different configurations at the WTO
namely the African Group, the ACP Group, the G-90, the G-33,
the Small Vulnerable Economies (SVEs) group, amongst others.
Generalized System of Preferences (GSP) The GSP scheme is a voluntary trade measure implemented by
Scheme developed countries that provide an advantageous, or
"preferential", tariff treatment to imports from developing
countries. Mauritius is a beneficiary of the GSP Schemes
offered by Japan, Norway, Switzerland, United States of
America and the Customs Union of Belarus, Kazakhstan and
Russia.
Regional Trade Agreements
European Union-Eastern Southern Africa Mauritius, along with Comoros, Madagascar, Seychelles and
Interim Economic Partnership Zimbabwe, is implementing an interim Economic Partnership
Agreement (EU-ESA iEPA) Agreement (iEPA) with the EU. The Agreement provides duty
free and quota free access to all products, including products
of interest such as Sugar, Garments and Tuna, to the EU
market.
Mauritius has liberalised 96% of its tariff lines under the EU-
ESA iEPA
United Kingdom - Eastern Southern Mauritius along with four (4) ESA States, namely Seychelles,
Africa Economic Partnership Agreement Zimbabwe, Madagascar and Comoros, signed an Economic
(UK-ESA EPA) Partnership Agreement (EPA) with the UK. The UK- ESA EPA is
a continuity agreement based on the EU -ESA interim
Economic Partnership Agreement (iEPA). The provisions of the
Agreement are similar to those of the EU-ESA iEPA.
Mauritian exporters enjoy duty free, quota free access on all
products including products of export interest such as Tuna,
Garments and Sugar.
African Growth and Opportunity Act AGOA builds on the existing Generalised System of
(AGOA) Preferences (GSP) scheme and offers duty-free and quota-free
market access to the United States for approximately 7000
products including the roughly 1,800 product tariff lines that
were added to the GSP by the AGOA legislation. Mauritius
became eligible to the third country fabric provision in 2008.
Since then, Mauritius has taken advantage of the third country
fabric provision, which allowed the country to consolidate its
exports on the US market.
African Continental Free Trade Area The AfCFTA aims to create a single continental market for
(AfCFTA) goods and services, with free movement of businesspersons
and investments; expand intra-Africa trade; and enhance
Africa's competitiveness and support its economic
transformation.
The Agreement establishing the AfCFTA came into force on
30 May 2019 and preferential trade under same started on 01
January 2021.
Trade Agreement Description
SADC Free Trade Area (SADC FTA) Trade within SADC Member States under the SADC FTA is
undertaken on a duty-free basis. It confers to Mauritian
exporters duty free access in other SADC Member States, Page | 86
except for Angola, DRC and Comoros which are not yet FTA
members
COMESA Free Trade Agreement Mauritius officially joined the COMESA on 3 October 1994 and
is fully participating in the Free Trade Area. Imports from
COMESA Member States are duty free and quota free.
Mauritius imports and exports with the COMESA region has
grown significantly over the years and has remained relatively
stable.
COMESA-EAC-SADC Tripartite Free Trade Mauritius has signed the TFTA Agreement, however, the
Area country is yet to ratify the same. The Agreement will come into
force after fourteen instruments of ratification have been
deposited (there are only eleven ratifications to date).
Bilateral Trade Agreements
Mauritius-China Free Trade Agreement The Mauritius-China FTA was signed in October 2019.
(FTA) Following the completion of ratification procedures by both
sides, the Mauritius-China FTA entered into force on 01
January 2021. The Mauritius-China FTA achieves the goal of
mutually beneficial outcomes. It is China's first FTA with an
African country, and it provides more solid institutional
guarantee for deepening economic and trade relations
between the two countries.
Comprehensive Economic Cooperation The Comprehensive Economic Cooperation and Partnership
and Partnership Agreement between Agreement (CECPA) entered into force on 1 April 2021. As one
Mauritius and India (CECPA) of the fastest growing economies, India presents a significant
opportunity to Mauritian businesses, provides access to a
market of more than 1.4 billion inhabitants. The Agreement
provides a platform for the two trading partners to reduce
custom duties on a host of products as well as relaxing existing
standards to promote service trade.
Mauritius-Pakistan Preferential Trade Under the PTA, which came into force on 30 November 2007,
Agreement tariff concessions have been granted on a list of products of
export interest to both countries. Hence, allowing operators to
trade with Pakistan on preferential terms.
Annex 2: Exhaustion of Trademarks - List of Interviewees
Sector Organisation Participant Designation

Page | 87
Economic Development Board (EDB) Mr V Amoomoogum Strategic Planning
Manager
Industrial Property of Mauritius (IPOM) Mr Beergaunot Acting Director
Maurice Stratégie Mr S Seechurn Managing Director
Mauritius Police Force (MPF) Mr R Ramchurn Police Inspector
Mr S Boodhoo Director
Ministry of Foreign Affairs, Regional Integration and Mr D Luximon Deputy Director
International Trade Mrs N Narrainen Ponen Principal
Analyst
Trade Policy
Mrs G Ricco-Philidor Trade Policy Analyst

Mr H Bhoyroo Principal Consumer
Affairs Officer
Ms Guness Principal Consumer
Affairs Officer
Mr Pydayya Analyst (Trade)
Ministry of Commerce and Consumer Protection Mrs S Sanasy Analyst (Trade)
Ms D Fulena Analyst (Trade)
Government Mr Lavictoire Assistant Permanent
Secretary
Sector Assistant Permanent
Ms A Gunputh Secretary
Mr J Suhootoorah Director
Mr R Hittoo Lead Analyst
Ministry of Finance, Economic Planning and Mrs N Teeluckdary Lead Analyst
Development Ms S Jootnah Analyst
Ms H Rojoa Analyst
Mr A Dookhee Analyst
Dr Ori Director of Health
Services
Mr Bohorun Ag Director of
Ministry of Health and Wellness Pharmaceutical Services
Senior Pharmacist and
Ms A Mangatha Registrar of Pharmacy
Board
MRA (Ex-Representative of Customs Dept) Mr Ootam Persand Ex-Representative of
Customs Dept
Mr P Amatah Team Leader
MRA Customs Mr R Conhye Technical Officer
Ms A Goundowry Customs Officer
A E Patel Ms Rosida Ibrahim Manager
Mr Sanjiv Goodorally Senior Manager
ABC Motors
Mr Alain Ng COO
Allied Motors Ms Annelise Ngan Director
Ms Shirin Gunny CEO
AMM - Made in Moris
Mr Samuel Maujean Operational Manager
Ascencia Mr Frederic Tyack CEO
Mr Kevin Ramkaloan CEO
Private Business Mauritius
Mr Asif Jeetun Economic Analyst
Sector Construction and Material Handling Co. Ltd (CMH) Mr Jean Michel Carosin General Manager
Mr Inigo de Prado CEO
Currimjee Group
Mr Azim Currimjee Director
Mr Cedric Lagesse CEO
Mr Pilot Denis Claude CFO
Eclosia Group Mr Raj Makoond Program Director
Mr Priyesh Utchanah Corporate Legal
Manager
Mr Walid Abdool Corporate Legal Officer
Sector Organisation Participant Designation
Edendale Distributors Ltd Mr Patrice Liew COO
F.I Luxury Retail Ltd Mr Ivan Montocchio Managing Director
Flemingo Duty-Free Mauritius Ltd Mr Roland Maurel Managing Director Page | 88
FTM (Mauritius) Ltd Mr Sudhir Misri Managing Director
Mr Patrick McKay CCO
Grays Inc
Mr Cedrick Raffray Manager
Healthactiv IBL Mr T Rampargass Head of Pharmaceutical
Hyvec Group Ms Beatrice Bellepeau Operational Manager
IBL Ltd Mr Patrice Marie COO
Mr Jean Pierre Lim Kong CEO
Innodis Ltd
Mr Sonny Wong COO
InvestCorp (Holdings) Ltd Mr Raju Jaddoo CEO
Leal and Co Ltd Mr François Gelle COO
LMLC Mr Julien Audibert General Manager
Dr Dristysingh Secretary General
Ramdenee
Ms Rooma Narrainen Head of Advocacy
Mrs Nishta Surajbali Economist
Mauritius Chamber of Commerce and Industry Mrs Vijeta Bissessur Lead Analyst
(MCCI) Mrs Khadeejah
Nobeebux Analyst
Mrs Diya Bundhoo Analyst
Jaunky
Ms Rusha Badaloo Analyst
Maxcity Ms Prisca Angeline- Team Leader
Samy
MC Law Offices Mr Shakeel Mohamed Barrister-at-Law
Mr Andrew Liu Man Hin President
MUDA
Ms Mrinal Teelock Secretary General
Nestle Mauritius Mr Gordon Perrins Managing Director
Oxenham Mr Sylvan Oxenham CEO
Panagora Mr Junaid Muslun General Manager
Mr Dookun President
Pharmaceutical Association of Mauritius (PAM)
Mr Z Jhummun Secretary
Pick and Buy Ltd Ms Madeleine Sales Manager
Jeanneton
Mr Daniel Darifat CEO
Mr J Noel Lennon COO
PNL Ltd
Mr Gilbert Richard Head of Health Division
Ms Yasmin Abdoola Head of Sales
Ms Stephanie Ng Sales and Operations
Rey and Lenferna Ltd Manager
Mr Yannick Chan Man Marketing Officer
Scott Mr Matthew Taylor CEO
STAR CONNEXXIONS Mrs Georgina Ragaven Founder and
Chairperson
Superdist Mr Daryl Rivet General Manager
TNS Mr Yashil Ramjutton Sales and Ops Manager
Toyota Mauritius Ltd Mr Atma Nundoosing HR Manager
Udis Ltd Mr Pascal Tsin CEO
Unicorn Mr Sadeck Vawda General Manager
Uteem Chambers Mr Reza Uteem Barrister-at-Law
Consumer Association for the Protection of Environment and Mr Suttyhudeo Tengur President
Consumers (APEC)
Rep. Consumer Advocacy Platform (CAP) Mr Mosadeq Sahebdin President
Annex 3: Proxies used in the absence of appropriate, complete, and accurate data.
Variable Data required Proxy used Source
Price Market price Import price inflated by the Trade Map and the Page | 89
real interest rate World Bank Group
Quantity Sales (quantity) Imports minus exports Trade Map
demanded (quantity)
Quantity Production or imports Imports (quantity) Trade Map
supplied (quantity)
Annex 4: List of data used in the empirical socio-economic assessment.
Industry Product HS Code Time period Value Quantity
Pharmaceuticals Medication 300490 2003 - 2021 US Dollars Kilograms Page | 90
Food and Beverages Whisky 220830 2003 - 2021 US Dollars Litres
Clothing and Textiles Sports footwear 640411 2003 - 2021 US Dollars Pairs
Automotives Bumpers 870810 2003 - 2021 US Dollars Kilograms
Source: Consultants’ tabulation of the data used for the empirical socio-economic impact assessment.
Note: The quantity for whisky was obtained by converting the weight (in tonnes) of imports and exports to
volume (in cubic metres) using a conversion factor of 1.27.123 The quantity for sports footwear was obtained
by dividing the weight (in kilograms) of imports and exports by 0.6.124 Medication and Bumpers were
computed using kilograms due to the variation in weight across the product.
123
https://www.thecalculatorsite.com/conversions/substances/alcohol.php#google_vignette.
124 https://www.shippn.com/blog/how-much-does-a-sneakers-weight/.
Annex 5: Regression output
Medication Whisky Sports footwear Bumpers
Demand Supply Demand Supply Demand Supply Demand Supply

Page | 91
PRICE -0.588** -0.557** -0.439*** -0.316** -1.009*** -0.968*** 0.417* 0.407*
(0.213) (0.217) (0.111) (0.131) (0.213) (0.254) (0.208) (0.207)
Intercept 16.937*** 16.920*** 14.476*** 14.325*** 15.164*** 15.150*** 9.790*** 9.820***

(0.675) (0.689) (0.247) (0.290) (0.543) (0.646) (0.555) (0.553)
Observations 19 19 19 19 19 19 19 19
R2 0.309 0.279 0.477 0.255 0.568 0.461 0.191 0.185
Adjusted R2 0.269 0.237 0.446 0.211 0.543 0.430 0.144 0.137
Source: Consultants’ computation using data as per Annex 5.

Note: * denotes significance at the 10% level, ** denotes significance at the 5% level, and *** denotes
significance at the 1% level. Values in parentheses are standard errors. The information contained in the
above table are the regression coefficients for those regression equations that we used to develop the
economic model discussed in section 5.3. As mentioned throughout the empirical analysis subsections, the
regression output is highly unreliable – for a variety of reasons – despite the statistical significance of the
coefficients. In the first instance, the data used does not represent the applicable model, i.e., how consumers
and producers respond to changes in the market price. As a result of the data used in the analysis, the
equations obtained show the way imports less exports (for demand) and imports (for supply) respond to the
import price inflated by a relatively arbitrary proxy for the seller’s markup. In addition, given the use of time
series data, it is likely that the regression output is spurious. Tests for non-stationarity/stationarity were not
conducted due to the time constraint associated with the project. Moreover, conducting these tests within
the context of inaccurate and inappropriate data is futile.
Annexure 6: Information requested from Private Companies
Page | 92
Column header Definition

Company name Name of the trademarked entity or the subsidiary that deals solely in trademarked products.
Industry The industry in which the trademark operates, e.g., food and beverage, automotives, pharmaceuticals, etc.
Employees The total number of direct employees affected.
Production All finished products produced within the period.
Sales Sale of finished products within the period.
Costs All costs incurred in the period.
Prices Average prices of certain finished products, or the price of the company's bestseller.
Value addition The difference between gross receipts and the cost of goods and services purchased from other suppliers.
Social responsibility Corporate social responsibility initiatives undertaken by the entity.
Investment Investment in fixed capital.
Innovation Research and development initiatives undertaken by the business.
Exports Exports of the businesses trademarked finished products.
Imports Imports of finished trademarked products intended for resale.
Annexure 7: Flowchart of Project Activities and Deliverables
Page | 93
Annexure 8: Whisky market scenarios
Higher incomes
Scenario 1 Scenario 2
• Increased competition in the whisky • With national exhaustion, consumers
market as more brands can be have access to a limited selection of
imported. whisky brands.
• Consumers gain access to a wider • Higher national income could lead to
variety of international whisky an increased demand for premium
brands at potentially lower prices. and imported whisky brands.
International trademark regime
• Current trademark owners may face • Trademark owners may enjoy strong
National trademark regime

Page | 94
tougher competition but could sales.
benefit from exporting their products
to other countries.
• A potential decline in national • Despite a decrease in national
income could lead to reduced income, consumers are limited to a
consumer spending on premium specific selection of whisky brands.
whisky brands. • Reduced purchasing power may
• Stricter price competition and result in a shift towards more
reduced consumer purchasing power affordable, domestic options.
may impact sales of high-end • Local distilleries producing budget-
whiskies. friendly options may fare better,
• Local distilleries might struggle to while high-end brands may
compete with cheaper international experience a decline in sales.
brands.
Lower incomes
Annexure 9: Medications market scenarios
Higher incomes
Page | 95
• With higher national income, • The exclusivity of certain
consumers have more spending distributors for imported
power for medications. medications continues to limit
• An increase in demand for consumer choices.
international medication brands • With a rise in national income,
might lead to higher prices. consumers might be willing to pay
International trademark regime
• Availability and variety of
National trademark regime

a premium for exclusive or
imported medications improve, imported medications.
benefiting those with exclusive • Exclusive distributors benefit
distribution licenses. from increased demand for their
products.
• Lower national income could • National exhaustion ensures that
result in reduced affordability of consumers have limited options
medications for some consumers. for medication.
• The pressure to control • In the face of lower national
healthcare costs may lead to price income, consumers may struggle
regulations or government with affordability.
intervention. • Exclusive distributors may see a
• Exclusive distributors might face decline in sales as consumers seek
challenges as consumers seek lower-cost alternatives,
more cost-effective alternatives. potentially affecting their profit
margins.
Lower incomes
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Page | 96
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Page | 1

Socio-economic impact assessment to determine the feasibility of

Report produced by Tutwa Consulting Group

(Updated 18 December 2023)

Process and timeline

Flowchart of meetings and deliverables under the Project

See Annexures for larger image.

Reliance on off-the shelf prices

Mauritius economic overview

Mauritius company information and trademarks registered 1

2021: 73.3 million

Two views on parallel imports

Economic performance and international partnerships

GDP– forecast 5% from 8.3% in 2022, Inflation 9%

Trade deficit – reached Rs 208 billion in 2023

The econometrics analysis

Four sectors subject to the partial equilibrium analysis

Trade, investment, and geo-politics

2 Including Super U; Intermart; Winners; DreamPrice; Lolo; SaveMart.

1.2 Definition of trademarks

Related Flexibilities, Topic 14: Exhaustion of Rights,

1.4 The Mauritian context

designs, geographical indications and layout-design of integrated circuits.

1.5 Scope of the study

Source: Authors’ Compilation from:

2.3.1 Arguments against parallel imports

2.3.2 Arguments in favour of parallel imports

All these factors warrant careful consideration.

2.4 Trademark regimes elsewhere in the world and their implications

Figure 2. Trademark regimes around the world

New Zealand: Value (NZ$) of Export and Import, and

Export Import Trade Balance

New Zealand: GDP (current US$)

GDP (current US$)

Trinidad and Current Trademark Regime: International Exhaustion

Quantity (Tons) Value (thousand USD) Trade Balance (value)

GDP (current US$)

Trinidad and Tobago: GDP per capita (2000-2022)

GDP per capita (current US$)

Denmark Trademark Regime: International Exhaustion on Pharmaceuticals Page | 26

Denmark: Import Value & Trade Balance (2003-2022)

Trade Balance Value (thousand USD)

GDP (current US$)

GDP per capita (current US$)

Serbia Current Trademark Regime: Regional Exhaustion

Serbia: Import Quantity and Value (2006 - 2022)

Import Quantity (Tons) Import Value (thousand USD)

Serbia: Trade Balance (2006 - 2022)

Serbia: GDP (2003 - 2022)

GDP (current US$)

Serbia: GDP per capita (2003 - 2022)

GDP per capita (current US$)

3.1 Historical overview and political economy of Mauritius

3.2 The Mauritian economic context

18 Mauritius Trade Easy. Mauritius: Economic Outline, https://www.mauritiustrade.mu/en/trading-with-mauritius/mauritius-economics-outline.

3.3 International trade

Figure 4. Exports vs. Imports: Goods and services, 2006 – 2022

Export of Goods Export of Services

3.4 The Mauritian socio-economic context