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The nobility of Pirate Joe's: Why we can't get enough of Canada's unauthorized Trader Joe's outpost

The nobility of Pirate Joe's: Why we can't get enough of Canada's unauthorized Trader Joe's outpost

It can be a bit of a surprise whenever you find a seemingly-small Canadian story being reported overseas. And we’re not talking about the Kevin-Vickers-is-a-superhero kind of Canadian story, which was roundly covered from Australia to the Arctic Circle.

We’re talking about seemingly small stories of Canadian entrepreneurialism – such as the case of the small Vancouver grocer Pirate Joe’s that has been making some very big headlines.

By its owner’s own admission, the shop isn’t even all that profitable. So why would it earn a massive feature in The Guardian this weekend, and significant online play since then?

That has a little to do with the store’s business strategy, a lot to do with where the “pirate” gets his bounty and everything to do with romanticizing the grey market – otherwise known as “legal smuggling.”

For the uninitiated, Pirate Joe’s is a Vancouver-based resale shop for unique products sold at Trader Joe’s, a cult-like American retailer with no presence in Canada, and seemingly no intention to build one.

Which is why Vancouverite Michael Hallatt launched his own venture, paying a team of “smugglers” to buy Trader Joe’s stock from shops near the Canadian border, bring it to Canada and re-sell it to Canadians for a profit.

To call Pirate Joe’s an unauthorized, unaffiliated offshoot of Trader Joe’s would be an understatement. The U.S. company has sued to shut them down, and is now appealing for a chance to try again. And Pirate Joe’s celebrates its rebel status, recently posting a “cease and desist” letter to its website.

Pirate Joe’s has been in operation for years, earning the occasional local headline. Last year, the story broke open when Trader Joe’s sued Hallatt in an attempt to shut down his shop. The bid failed.

Now it appears to have garnered interest from The Guardian's U.S.-based reporter Amanda Holpuch.

In an article that ran over the weekend, Holpuch embeds herself into Hallatt’s business and details exactly how the “smuggling” operation works.

It is exactly the low-stakes “cloak and dagger” venture you’d imagine.

The article begins:

In a darkened parking lot in Bellingham, Washington, less than 50 miles from the Canadian border, two cars pull up alongside a ramshackle white van. It is a weekday night. The drivers of the cars will not provide their last names, or appear in photographs. One is wearing a costume — a $4 thrift store trench coat and styled hair.

“I’ve been in situations that were dangerous before,” John L, the man in the trench coat, told the Guardian. “But this is not one of them.”

What Pirate Joe’s is doing isn’t new – they’ve been at it for years – and more than that, the practice isn’t something they conceived.

Legal smuggling is a fun way of referring to the grey market, or the resale of previously purchased items, specifically after they have crossed a border.

There are shops in every country that sell rare items of foreign flavour.

That little British-flag-painted bodega where you bought your great aunt that rare lime marmalade? Grey market. The shop where you snagged the one-kilogram tin of Milo – the real Australian Milo, not the flat recipe sold in Canada – that store deals in the grey market as well.

Heck, getting your U.S.-based brother-in-law to buy you a couple of smartphones that haven’t been made available in Canada? Grey market-adjacent.

The practice is legal under Canadian law. In 1984, the Supreme Court ruled in Consumers Distributing Co. vs. Seiko that, essentially, all is fair once the trademark holder puts the product on the market.

The issue that has raised the ire of Trader Joe’s is Pirate Joe’s dedication to the brand: Hallatt is focused solely on re-selling Trader Joe’s merchandise. But while it might annoy Trader Joe’s executives, it didn’t bother a U.S. court, which ruled Pirate Joe’s a legal enterprise.

Last year, Trader Joe’s sued the Vancouver grocer for reselling their goods.

U.S. District Court Judge Marsha Pechman dismissed the suit, agreeing with Hallatt’s lawyer that since Trader Joe’s wasn’t operating in Canada, Pirate Joe’s presence could not damage its business.

"Here, all alleged infringement takes place in Canada and Trader Joe’s cannot show economic harm," the judge wrote. “Even if Canadian consumers are confused and believe they are shopping at Trader Joe’s or an approved affiliate when shopping at Pirate Joe’s, there is no economic harm to Trader Joe’s because the products were purchased at Trader Joe’s at retail price.”

So while stories like the recent one in The Guardian paint Pirate Joe’s business as “legal smuggling,” that’s really not the case. Smuggling is illegal by definition. What Pirate Joe’s is doing is legal resale; they’ve got a U.S. court decision that says so.

And what must irk Trader Joe’s execs even more is that Hallatt is a self-professed lover of Trader Joe’s. It is what he credits for his decision to open the Canadian outpost. Not only that, but he has promised to close up shop if and when Trader Joe’s expands into Canada.

Perhaps that’s what is most engaging about the Pirate Joe’s saga, what prompts the occasional spate of local and international attention. The nobility of the whole thing.

If Hallat is actually a pirate, he is more the endearing man in black from The Princess Bride than an evil Captain Hook. It’s a mixture of honour and danger in one package.