Will A2M be removed from ASX100 on Friday?, page-29

"I've heard this arguement a few times and don't get it. They do direct to China sales. They don't rely on the channel."

The reason A2M (which is clear over the last 16 months) the cream in A2M profits were derived from grey market sales to unregistered/untaxed/unregulated International student and Mums & Dad Daigus

A2M direct sales to China isnt a high margin after taxes in Australia and Chinese import customs, taxes and duty.

Chinese consumers in mainland use these Daigus because it is cheaper than buying from official chinese channels.

How do these International student and Mums & Dad Daigus do it....

1. They do not declare income in Australia, are not registered GST and pay no business/stamp/income TAX, likely in the cases of Mums and Dads outfits they most likely double dip ripping Australian tax payers by claiming unemployment benefits.
2. They are not registered in China so do not pay Chinese import duties, taxes, levies or customs
3. 1 + 2 means they can buy in Australia, post to China and sell to mainland chinese at a 20 to 30% discount.

Don't lump Corporate and Student/Mums&Dads Daigus as the same, they are totally different.

Corporate Daigus are business registered in Australia and pay Australian Taxes PLUS reistered as importers in China and pay Chinese customs/duties/levies. The reason Corporate Daigus could not take over the Daigu market is that, after taxes/duties in Australia and China they are only about 5 to 10% cheaper than official direct Chinese channels but significantly more expensive than "dodgy" Daigus