Australian cosmetics priced two times higher than U.S. equivalents; import costs, taxes, smaller market size believed to be cause

LOS ANGELES , September 26, 2011 () – Cosmetics consumers in Australia are paying up to twice the amount that their U.S. counterparts are, despite a strong currency and popular online retailing, The Sunday Mail reported Sept. 16.

Global brands like MAC, Dior, Chanel, Elizabeth Arden, Clinique and Revlon, as well as the local Napoleon brand, are selling in Brisbane for significantly higher prices than those in New York City stores.

A lipstick from MAC costs AU$46 (US$44.95) in Myer but less than US$24 in New York, and even online Australian prices for lipstick are significantly higher at AU$36 plus $10 for shipping versus US$14.50 plus $5 shipping in the U.S.

Dior nail polish is priced at AU$39 in Brisbane but only US$22 in New York.

While industry insiders said import costs and taxes are causing the price difference, Australian retailers reported 5.5% of revenue as profit while U.S. retailers reported only 4.3%.

Because retailers were not working together illegally to inflate prices, the Australian Competition and Consumer Commission (ACCC) said nothing could be done.

IBISWorld Senior Analyst Craig Shulman said Australia’s smaller market, worth AU$2.4 billion in comparison to the U.S.’s $12.6 billion market, is possibly the cause as retailers are generally able to lower prices in a bigger market.

The primary source of this article is The Sunday Mail, Bowen Hills, Australia, on Sept. 16, 2011.

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