ACCC gives green light to Essilor and Luxottica merger

sunglasshut_melb_033_2The Australian Competition & Consumer Commission will not oppose the proposed merger between Essilor International (Essilor) and Luxottica Group S.p.A. (Luxottica).

In Australia, Essilor sells wholesale finished ophthalmic lenses, used to correct visual impairments. Luxottica largely supplies wholesale prescription frames and sunglasses, including such brands as Ray-Ban, Oakley and Prada. Luxottica also has retail outlets, such as OPSM, Laubman & Pank and Sunglass Hut.

“As Essilor and Luxottica mostly supply products at different stages of the supply chain, there is minimal direct competitive overlap between the two parties,” ACCC commissioner Roger Featherston said.

“The ACCC focused on the increased vertical integration, and whether the combined company having operations in all parts of the optical supply chain would give rise to a substantial lessening of competition.

“While Luxottica does supply market leading branded frames and sunglasses, retailers have generally indicated that there are alternative suppliers of frames and sunglasses that they could switch to if they did not wish to purchase from the combined Essilor-Luxottica. There are also other options for lenses.”

The ACCC said it spoke to a range of interested parties including customers, competitors, buying groups and industry associations and that feedback from market participants was mixed, with some expressing concern while others expressed no concerns about the proposed merger.

The watchdog also considered whether the combined Essilor-Luxottica could tie or bundle its supply of frames and lenses to independent retailers to the detriment of competition. The ACCC concluded that any attempt to bundle the supply of these brands with the supply of lenses would be unlikely to substantially lessen competition.

“The ACCC’s investigation found that a merged Essilor-Luxottica would likely continue to face competition at every level of the supply chain, including from other vertically integrated suppliers,” Featherston said.

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