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King
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As part of your costings, sounds like you had better include a fair chunk for legal fees.
Personally I think both you and the US supplier need to think hard about ther ethics of it all. If the current AU distributor has the legal distribution rights, then that is something he will defend, and sightly so, esp if it is a branded product.
Read up on the Trade Practices Act – might be some worthwhile reading in there that will help shape your thoughts.
Basically, there are plenty of products you can import, of new brands, but good quality, with good margins, without creating ongoing angst.

Think Karma!!