Industry News
ACCC To Investigate Essilor - Luxottica Merger
Essilor and Luxottica propose to merge their global operations. The proposed merger would combine the following wholesaling and retailing activities of Essilor and Luxottica in Australia.
The Australian Competition and Consumer Commission (ACCC)’s investigation is focused on the potential impact on competition of the proposed merger. In particular, the ACCC is considering:
- how closely Luxottica and Essilor compete with each other in supplying various optical products and services
- whether the price of relevant optical products and/or services would increase, or service levels decrease, as a result of the proposed merger,
- how easy it would be for Essilor’s and/or Luxottica’s customers to switch to other suppliers of relevant optical products and services after the proposed merger.
The legal test which the ACCC applies in considering the proposed merger is in section 50 of the Competition and Consumer Act 2010. Section 50 prohibits mergers and acquisitions that are likely to have the effect of substantially lessening competition in a market.
In Australia, Essilor is primarily active in the wholesale supply of lens processing services and the wholesale supply of finished ophthalmic lenses. Essilor also sells optical products through its online retail stores. Essilor’s operations in Australia include:
- interests in a number of prescription laboratories located in Australia and overseas
- glazing facilities located in Sydney, Brisbane, Gold Coast, Melbourne and Perth, where lenses are edged and mounted onto a prescription frame, and
- the online optical stores Clearly.com.au and au.EyeBuyDirect.com
Essilor supplies a range of other optical products and services to customers in Australia, including sunglasses, prescription frames and packaged prescription frames and lenses, and prescription and non-prescription safety glasses. Essilor also supplies ophthalmic machines and optometric instruments and management software to optometrists and optical dispensers, and manufactures and supplies assistive technology for people who are blind to have low vision.
Luxottica is in Australia primarily active in the wholesale supply of prescription frames and sunglasses, and the retailing of optical products and services. Luxottica’s wholesale operations include the supply of prescription frames and sunglasses to its own stores and to independent optical retailers.
Luxottica has approximately 600 optical retail stores in Australia, comprising:
- the retail chains OPSM (which has stores nationally) and Laubman & Pank (which has stores in Western Australia, Queensland and South Australia), both of which supply optical products and related services,
- Sunglass Hut and Oakley, both of which are specialist retailers of sunglasses.
These retail chains include stores owned by Luxottica and stores owned by franchisees. Luxottica also owns online retail stores corresponding to each chain, and retails sunglasses to customers in Australia through the Rayban.com online store. Luxottica also supplies prescription and non-prescription safety glasses to customers in Australia.
Essilor and Luxottica together own a joint venture, Eyebiz Laboratories Pty. Ltd. (Eyebiz). Essilor owns a 70% interest in Eyebiz and Luxottica owns the remaining 30%. Essilor, via Eyebiz, is the exclusive supplier of ophthalmic lenses to Luxottica and Luxottica’s requirements of finished ophthalmic lenses in Australia are exclusively supplied by Eyebiz. Essilor also supplies other optical retailers (on a non-exclusive basis).
