The Australian Government has revoked a 5% tariff concession order (TCO) on the importation of acetate frames in response to a request by local eyewear manufacturer Optex Australia.
The revocation is back-dated to 13 May 2022, meaning importers may be charged the full tariff on imported plastic eyewear that has left its place of manufacture since that date. A TCO applied to metal frames will also be revoked in due course.
With Australian eyewear imports valued at over AU$300 million in 2020, the move could collectively cost local importers around $15 million.1
What are TCOs?
TCOs are put in place by the Australian Government when there are no known Australian manufacturers of goods that are substitutable for imported goods. There are currently 15,000 existing TCOs in Australia.
There are currently very few Australian manufacturers of eyewear distributing to optometry practices. One is Optex Australia, based in Port Macquarie, which is owned by Greg French. This was formerly the business known as Clive and Wally, which was placed in voluntary liquidation in December 2017. Another is Ven Eyes, a start-up owned by Josephine Roufaiel, which produces 3D printed eyewear to order. Then there is Dresden, which manufactures eyewear from recycled and recyclable materials in Sydney, for sale in its own stores. There are also artisan eyewear makers including Coombs, Brendan O’Keefe frames and Fritz Frames.
Complete Surprise
The decision to revoke the tariff applied to plastic frames came as a complete surprise the industry.
As Jacque Katsieris from ProOptics commented, “While it is fabulous to have a manufacturer of eyewear in Australia, demand cannot be met by one local manufacturer alone; we will always need to continue importing.
“Revocation of the tariff concession, at a time when we are seeing inflation throughout the economy, will only make it harder for importers and retailers alike, to maintain a sustainable business.”
Aaron McColl from Aaron’s Eyewear agreed. “The revocation adds 5% to the cost of all plastic frames we import so we need to look at reflecting that cost increase in our pricing or absorb it, both of which are difficult decisions in the current economic climate. The fact that this import duty is now being forced upon us due to someone in our industry instigating the revocation request with Border Force is outrageous and downright appalling to say the least. What do they think they are achieving by increasing their competitors’ costs by 5%?
“What the revocation does not acknowledge, amongst other things like limited capacity to manufacture, is that plastics aren’t all the same – we have TR90, 3D printed extruded plastics, cellulose acetate, injection moulded plastics, others still, …. most of which – apart from cellulous acetate and 3D printed extruded plastics – are not used in Australian manufacturing to my knowledge.”
Reason Behind Decision
According to Australian Border Force documentation obtained by mivision, the decision to revoke tariff concession order tc 0315725 / (adf2022/170045) was made in response to a local manufacturer’s (Optex) claims made regarding the production of substitutable goods in Australia:
“In respect of the revocation request, Optex submitted that it manufactures:
• Locally Manufactured Spectacle Frames
• Optical correction and Sunglasses.
“In completing the ‘Request for Revocation of a Tariff Concession Order (TCO) or Commercial Tariff Concession Order (CTCO)’ form (Form B441), Optex submitted:
• the goods are wholly or partly manufactured in Australia;
• at least one substantial process in the manufacture of the goods is carried out in Australia;
• it has produced the goods in the last two years;
• the goods have been produced and are held in stock in Australia; and
• it is prepared to accept an order to supply the goods.”
Optex Australia and the Optical Distributors and Manufacturers Association of Australia have been contacted for comment.
1. https://oec.world/en/profile/hs/eyewear?disaggregationCountry=ocaus
