Say you run a pharmaceutical company. You have a highly lucrative business manufacturing drugs that treat erectile dysfunction. However, at the edges of your business are a couple of problems:
– gray marketeers buy drugs bound for export and re-sell them in the states through shady means
– black marketeers sell counterfeit drugs
What do you do? Law enforcement’s going to prove ineffective in the long run, and stamping out one results in another one popping up. Plus, the gray marketeers are harming your reputation because someone in Estonia can’t get the real thing because it’s been rerouted.
You enter the black market: control the high and the low. You don’t even have to do it directly: given a distributor of sufficently poor morals, you can supply them with a ton of drugs at a really low cost and watch them flood the black market. Because your drug only costs $.01/pill, you’ll still make a huge profit undercutting what they would pay to pick off those Estonia-bound drugs, and the gray marketeers are screwed.
And voila, your problems are solved (and you’ve created a whole set of problems for other people). Your involvement in easily-deniable cut-out companies now makes you a ton of money, protects the legitimate supply of the drug, and profits go way, way up.