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Industries Assistance Commission - Reports - Leather and leather substitute products, 10 June 1975


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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

1975— Parliamentary Paper No. 195

Industries Assistance Commission Report

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

10 J U N E 1975

Presented by Command 20 August 1975 Ordered to be printed 11 September 1975

THE G O V E R N M E N T PRINTER OF AUSTRALIA

CANBERRA 1976

Printed bv Auihontv bv ibc Government Primer o("Austr;ili,i

INDUSTRIES ASSISTANCE COMMISSION REPORT LEATHER AND LEATHER SUBSTITUTE PRODUCTS

:THE HONOURABLE THE SPECIAL MINISTER OF STATE

I am directed by the Commission to forward Its report on

’ "Leather and Leather Substitute Products” made In accordance with the

reference, dated 6 November 1972, from the Minister for Trade and In­

dustry, under 15 of the Tariff Board Act 1921-1972.

I am also directed to Indicate that the release of the

report as soon as It Is printed would not, In the view of the Commission,

be likely to result in any damaging speculation.

A.E.S. Davey Secretary

13 June 1975

For the Purpose of the inquiry on this matter, in accordance with Section

12A of the Tariff Board Act 1921-1972 the powers of the Tariff Board* were

exercised by :

G.F. JOHNSON . . . .............. PRESIDING MEMBER

L.R. DUDLEY.......................MEMBER

For the purpose of the report on this matter, in accordance with Sections

3 and 19 of the Industries Assistance Commission Act 1973 the powers of

the Commission have been exercised by :

G.F. JOHNSON .................... COMMISSIONER

Ko COLLINGS.......................ASSOCIATE COMMISSIONER

The inquiry into the goods under reference was commenced by the Tariff Board and its report is furnished by the Industries Assistance Commission in accordance with Section 3(5) of the Industries Assistance Commission Act 1973.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

CONTENTS

Page

1. SUMMARY 1

2. GENERAL 3

2.1 Origin and scope of the reference 3

2.2 Relationship of the goods under reference 3

and official statistics 2.3 Tariff provisions 4

2.4 Previous reports 4

2.5 Public inquiry 5

2.6 Witnesses 5

2.7 Requests and suggestions 5

2.8 Evidence 5

2.9 Definitions 5

3. GENERAL COMMENTS AND CONCLUSIONS 6

4. CASES 13

4.1 The Australian industry 13

4.2 The Australian market 16

4.3 Competitive position 19

4.4 Case for assistance 21

4.5 Assistance to be recommended 22

5. HANDBAGS 25

5.1 The Australian industry 25

5.2 The Australian market 28

5.3 Competitive position 30

5.4 Case for assistance 33

5.5 Assistance to be recommended 35

6. LEATHER BELTS 37

6.1 The Australian industry ‘ 37

6.2 The Australian market 39

6.3 Competitive position 41

6.4 Case for assistance 42

6.5 Assistance to be recommended 43

7. WALLETS

7.1 The Australian industry 45

7.2 The Australian market 46

7.3 Competitive position 48

7.4 Case for assistance 49

7.5 Assistance to be recommended

8. SADDLERY 52

8.1 The Australian industry 52

8.2 The Australian market 53

8.3 Competitive position 54

8.4 Case for assistance 55

8.5 Assistance to be recommended 55

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

CONTENTS

Page

9. SPORTS BAGS, OTHER LEATHER PRODUCTS AND MACHINE BELTING 57

9.1 The Australian industry 9.2 The Australian market 9.3 Competitive position 9.4 Case for assistance 9.5 Assistance to be recommended

57 59 61 62 63

10. RECOMMENDATIONS 65

APPENDICES

A. The reference B. Tariff provisions C. Tariff Board reports and other references D. List of witnesses and abbreviations E. Summary of requests and suggestions F. Definitions of terms used in the report G. Tables (including Index)

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission submits its report on Leather and Leather Substitute

Products (referred to herein as ’Leather Products’) in response to the reference

of 6 November 1972. The reference, which is set out in Appendix A, asks whether

assistance should be accorded the industry which produces Leather Products in

Australia, and if so, the nature and extent of that assistance.

1. SUMMARY

The turnover of the Leather Products industry in Australia is about

$53 million per year. The number of establishments in the industry has declined

from around 430 at the end of 1959-60 to 350 at the end of 1972-73. The number

of persons employed by the industry has also declined, from approximately 5,200

during 1959-60 to about 4,400 in 1972-73.

The local production of some Leather Products has declined despite

the relatively high levels of protection which have been afforded the industry

for several decades. The General rate of duty at present accorded most Leather

Products is 34 per cent and ranges from 12 per cent for artificial fur to 46

per cent for leather gaskets.

The market share held by local producers of Leather Products in

value terms has declined somewhat in recent years to about 75 per cent, but in

quantity terms the locally produced proportion of the main items has declined

to about one-third. Notwithstanding the general declining trend in the in­

dustry some producers have been earning high profits.

The Commission has recommended that the industry should be assisted

hy a long term industry rate of 25 per cent. The recommended rate involves a

reduction of 9 percentage points in the General rate and an increase of 17 per­

centage points in the Preferential rate currently applying to most of the goods

under reference. In addition, it has suggested the withdrawal of concessional

entry under the Developing Countries preference scheme for certain products from

Hong Kong, Taiwan and the Republic of Korea, and the application of the General

rate of duty to leather Wallets imported from New Zealand.

1

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

In view of the present situation in the industry and current

economic conditions, the Commission has proposed that the implementation

of its main recommendations involving reductions in the General rate be

deferred for one year.

The Commission considers that its long term recommendations

will result in further adjustments within the industry of a kind which

have been occurring over recent years. The changes are expected to take

place gradually and without significant economic consequences, but adjust­

ment assistance may be necessary in some cases.

2.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

2. GENERAL

2,1 Origin and scope of the reference

The reference on the Leather Products industry was one of the

references received by the Tariff Board as part of the Tariff Review program

designed to examine systematically the assistance accorded manufacturing

processes in Australia (see Appendix A).

This report is concerned with the various local sub-industries

which make products of leather and leather substitutes. The goods covered by

the Minister's reference were divided by the Commission into eight major groups,

for the purpose of its inquiry and report. These groups reflect the broad

pattern of domestic production and are as follows :

Cases Handbags Leather Belts Wallets

Saddlery Sports Bags Other Leather Products Machine Belting

The commodity codes for the goods included in each product group

are set out in Appendix F, together with the appropriate tariff items and

statistical keys.

2.2 Relationship of the goods under reference and official statistics

The reference is based on industry class '3412 (leather and leather

substitute products n.e.c.) in the Australian Standard Industrial Classification

(ASIC), and has been defined to coincide as closely as possible with the scope

of this class.

ASIC class 3412 covers :

"Establishments mainly engaged in manufacturing products of leather or leather substitutes Including leather machine belting, saddlery, harness, bags, cases, handbags or wallets (except foot­ wear or leather clothing)."

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The following differences between the scope of the inquiry and

that of ASIC 3412 should be noted:

(a) Four commodities primary to ASIC class 3412 are excluded from the inquiry; namely, men's and boys' and women's and girls' vinyl coated fabric belts, braces, and leather toys and games.

(b) Two commodities primary to ASIC class 2333 (canvas prod­ ucts and associated textile products n.e.c.) have been included in the inquiry. These items are canvas suitcases, trunks, etc. and other canvas bags, shopping bags, etc.

(c) Several commodities primary to ASIC class 3412 are not wholly covered by the inquiry. These include moulded cases of plastic materials, whips and leggings.

2.3 Tariff provisions

The rates of duty presently operative in the Customs Tariff

for the goods under reference are set out in Appendix B.

Cases, Handbags, Wallets and Sports Bags (item 42.02.9) are

dutiable at 34 per cent General and 13 per cent Preferential. Leather Belts

(item 42.03.9) are dutiable at 42 per cent General (including primage) and

17 per cent Preferential. Saddlery (items 42.01.1 and 42.01.9) is dutiable

at 19 and 30 per cent General and 13 per cent Preferential. Other Leather

Products (items 42.02, 42.03.4, 42.04.2, 42.04.9, 42.05 and 43.04.9) are

dutiable at rates (including primage) ranging from 12 to 46 per cent General

and from 4 to 24 per cent Preferential. Machine Belting (item 42.04.1) is

dutiable at 26 per cent General and 19 per cent Preferential.

Reduced rates apply to imports from New Zealand and Developing

Countries.

Prior to 19 July 1973 duties on the goods under reference were

approximately one-third higher than at present.

2.4 Previous reports

The tariff assistance given the major part of the goods under

reference was reviewed in I960. However, prior to 19 July 1973 there had

been little change in the assistance afforded most of the goods under ref­

erence since the 1930s. Previous Tariff Board reports and other relevant

documents are listed in Appendix C.

4.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

2.5 Public inquiry

Public hearings on this subject were held in Melbourne on 14-16

May 1973 and in Sydney on 21-24 May 1973.

2.6 Witnesses

The names of witnesses who gave evidence at the public hearings,

the companies or organisations they represented and the abbreviations used are

given in Appendix D.

2.7 Requests and suggestions

The requests and suggestions submitted by witnesses are summ­

arised in Appendix E and are referred to in the appropriate product sections.

In general, local manufacturers requested the rates of duty which applied

prior to 19 July 1973. Some importing interests requested reduced duties.

2.8 Evidence

Copies of the official transcript of public evidence and of

supplementary public evidence submitted by witnesses have been forwarded

to the Minister.

2.9 Definitions

Definitions of some of the terms used in this report are given in

Appendix F.

5.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

3. GENERAL COMMENTS AND CONCLUSIONS

The Leather Products industry, to which this report relates, is com­

posed of a number of sectors which are largely discrete, although there is over­

lapping between most sectors.

Although the various sectors are largely independent and their for­

tunes have varied for a number of reasons, they have much in common. Most sectors

are composed of a relatively large number of firms which are, in general, rather

smaller than the average manufacturing enterprise in Australia; production is

largely labour-intensive, with automatic or semi-automatic machinery restricted

to a few areas within the most important sectors; processes employed are similar;

materials used are mainly plastic sheeting and leather, with metal frames and

fittings also of significance in most areas. In most sectors the products con­

cerned can be divided into two types. Firstly, a high quality or fashion type:

for this type the local industry has traditionally supplied the bulk of the

market - because it produces the required quality, because it can cater for

fashion changes more readily than overseas manufacturers or because it actually

instigates the fashion changes. And secondly, a cheaper, standard type where

fashion and quality are less important: for this type imports either have trad­

itionally supplied or are tending to take over the major part of the market. "’ bis

latter type tends to dominate the market in quantity terms but in terms of value

the former is generally more important.

The protection currently available to local producers of the goods

under reference varies from 12 to 46 per cent General and from 4 to 24 per cent

Preferential. For the greater part of the industry, however, the levels are 34

per cent General and 13 per cent Preferential. Prior to 19 July 1973, all these

rates were approximately one-third higher.

Over the ten years to 1968-69 - the most recent year for which relev­

ant statistics are available - production by the industry at constant prices in­

creased only slowly and the value added in production (again at constant prices)

actually declined. The number of factories involved decreased between 1959-60 and

1972-73 and employment also fell, although the average factory size increased

6.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

marginally. This tendency for the industry to decline during a period of rel­

atively stable demand can be attributed mainly to the fact that the labour-inten­

sive nature of much of the production concerned makes it more suitable for those

countries which have a large supply of low cost labour. This applies part­

icularly to the non-fashion and lower quality part of production.

The assistance requested by witnesses was wide ranging, but was gen­

erally for the rates of duty which applied at the time the inquiry began, i.e. for

most goods under reference 45 per cent. It is estimated that the average effect­

ive rate of protection which would be afforded the industry by a 45 per cent

tariff rate would be about 60 per cent, and that the subsidy equivalents^ would

be about $16.3 million gross and $13.2 million net.

Local manufacturers of Leather Products put forward a variety of

reasons why the industry as a whole, or particular sections of it, should be assist­

ed to the extent requested. Among the reasons advanced were the industry's cost

disabilities and price disadvantages and the fact that the industry provided employ­

ment opportunities, especially for females and immigrants.

The Commission had little evidence on which to assess cost disabilit­

ies for individual products. It is apparent, however, that disabilities are mostly

high for those goods which can be mass-produced in low cost labour countries and

relatively low for fashion or high quality goods x^hich are generally made in

Western countries. Local producers have some natural advantage in fashion and high

quality lines because of their proximity to a rapidly changing market, particxilarly

for Handbags.

Comparisons of the prices of locally made and imported Leather Products

showed a very x*ide range of disadvantages. For some manufacturers' ma_1or product

lines price disadvantages were moderate but for those lines mainly produced in

large quantities in lovi cost labour countries they were very high and often in ex­

cess of 100 per cent.

1 See definitions in Appendix F.

7.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission noted that,although profits have not been high for

the industry in general, in all the main sectors there were producers whose

results have been highly satisfactory. For several of these firms, profits

have exceeded 30 per cent on funds employed.

Import competition has generally intensified in the areas where

disadvantages are high and the Commission noted that some local manufacturers,

which had virtually ceased production of these types of Leather Products, were

importing similar lines to complement their product ranges. Even the high

levels of protection requested by most local manufacturers would be insufficient

to fully compensate for the very large differences between the domestic and

import prices of such Leather Products.

The Commission has concluded that the local industry warrants long

term protection by means of a rate of duty which would enable economic and eff­

icient producers to achieve satisfactory levels of production and profitability.

It considers that an industry rate of 25 per cent should be sufficient to achieve

this objective and will recommend accordingly for all the goods under reference

except those classifiable under item 43.04.9 which should remain dutiable at

the General rate of 12 per cent. It will also propose increases in the duties

applying to certain goods from some Developing Countries and from New Zealand,

from which imports have increased substantially in recent years.

In addition to assessing the long term level of assistance approp­

riate to the Leather Products industry, the Commission considered whether, in

view of the present situation in the industry and of current economic conditions

and employment problems, it would be justified in recommending additional

assistance of a short term nature. It has noted that imports were generally

higher in 1973-74 than in earlier years and that local production of some goods

under reference had declined. Imports during the current financial year have,

however, generally fallen to a level more consistent with that recorded in

1972-73.

8.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission has concluded that the short term situation is not

such that it would be justified in recommending any increase in the present

rates of duty but it considers that the immediate implementation of the rec­

ommended General rate of 25 per cent could place an undue strain on some local

producers. It will therefore recommend that the current General rate of 34 per

cent be retained for goods classifiable to item 42.02.9, and apply to Leather

Belts classifiable to item 42.03.9, for a period of one year after the implem­

entation of this report. At the end of that year, the General rates on both

items should be reduced to the recommended long term level of 25 per cent. Por

all other items under reference the duties could be set at the long term level

on implementation of this report.

Although the Commission will propose a short term rate of 34 per

cent for a substantial part of the goods under reference, it does not see any

justification for increasing the Preferential rate to this level and then red­

ucing it after one year. It will therefore recommend that the Preferential

rate for item 42.02.9 and for the goods under reference in item 42.03.9 be set

at the long term level of 25 per cent at the time of implementation of this

report.

According to estimates made by the Commission, the average effect­

ive rate of protection afforded all Leather Products while the recommended

short term tariff rate applies (34 per cent for items 42.02.9 and 42.03.9) would

be about 40 per cent; and the average effective rate of protection which would

be afforded by the recommended long term tariff rate would be about 30 per cent.

The gross subsidy equivalent of the long term tariff rate is about S9.5 million

and the net subsidy equivalent about 36.5 million. The effective rates and

subsidy equivalents mentioned above were calculated on the basis of the nominal

rates of duty recommended in the Commission's recent report on Tanned and

Finished Leather; Dressed Fur.

9.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission suggests that the goods under reference of New

Zealand origin, apart from leather Wallets, should be admitted at minimum rates

of duty. As the goods under reference of New Zealand origin are either free of

duty or dutiable at rates ranging from 2.5 to 14 per cent, the changes involved

are generally small. The Commission found that, apart from leather Wallets,

local manufacturers generally had price advantages or negligible price disad­

vantages against New Zealand Leather Products.

The relationships between the prices of Australian, New Zealand

and other imported leather Wallets indicate that New Zealand manufacturers are

at a significant advantage in the Australian market under the present concessional

rate of 6 per cent. New Zealand has been a major source of imported leather

Wallets in recent years and the volume of imports from New Zealand during

1974-75 is about 50 per cent higher than in 1973-74. It would appear that

leather Wallets of New Zealand origin are increasing their penetration of the

Australian market as a result of the recent reduction in tariffs, their improved

competitive position stemming from lower costs and the operation of the New

Zealand export incentive scheme.

In addition to requesting higher duties on leather Wallets from

New Zealand, the major Australian manufacturers which gave evidence also asked

for access to the New Zealand market which was virtually denied them by severe

import licensing restrictions. This lack of access placed them at a competitive

disadvantage with New Zealand manufacturers which had no such restrictions on

their access to the Australian market.

The Commission considers that the appropriate rate of duty on

leather Wallets of New Zealand origin is 25 per cent. It is, however, aware

of the special trading arrangements between Australia and New Zealand and

suggests that the possibility of a mutually acceptable agreement on trade in

leather Wallets between the two countries should be explored: in the

absence of such an agreement the recommended General rate of 25 per cent

should apply.

10.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission considers that a significant part of the demand

for the goods under reference could best be supplied by imports from those

countries which have a large supply of low cost labour. However, it is also

apparent that the prices of many locally made Cases, Handbags, Wallets, etc.,

of types which the Commission regards as appropriate for continued production

in Australia, are well above the landed duty free prices of similar goods im­

ported at concessional rates from some Developing Countries and that imports

from such countries have obtained an increasingly significant share of the

Australian market.

The Commission considers that, at the recommended General rates,

imports from Hong Kong, Taiwan and the Republic of Korea of goods classifiable

to Item 42.02.9 would be competitive with goods of Australian origin. It

therefore suggests that such goods from Hong Kong, Taiwan and the Republic of

Korea be excluded from the Developing Countries preference scheme, and that

imports from other Developing Countries be kept under review.

The Commission has commented in the appropriate product section

on a specific request for by-law admission of materials for use in the pro­

duction of Handbags. No requests were received with regard to the other

by-laws applying to goods under reference (see Appendix B). The by-laws

generally relate to specialised, small quantity items, and the Commission

suggests that they be continued, subject to review if warranted.

Effects of Recommendations

There has been a tendency in recent years for the Leather Products

industry to decline as products less suitable for manufacture in Australia

have been dropped, as the smaller and least viable producers have ceased pro­

duction and as the remaining firms have tended to become larger and more spec­

ialised. The change has been gradual. It has not resulted in serious dis­

ruption of the industry, but it has led to a situation where demand for utility

products such as plastic small bags is now largely supplied by imoorts and the

remaining Australian manufacturers are concentrating more on fashion or higher

quality lines.

11.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Nevertheless, the evidence Indicated that there Is still an

element of high cost production In Australia and that several companies con­

tinue to make some lines which would more appropriately be supplied by Imports.

Adoption of the Commission's recommendations should lead to further adjustment

within the Industry Including a reduction In the level of activity In those

sectors of production least suited to Australian conditions.

The Commission’s recommendations are designed to provide ade­

quate assistance for the production of those goods under reference which

should continue to be made in Australia and, at the same time, to encourage

the completion of the rationalisation of the Industry over a number of years.

It is expected that eventually there will be a further reduction in both the

number of producers and employment. However, it is not expected that this process

will be rapid and the retention of the General rate of 34 per cent for Item

42.02.9 for one year and the phased reduction in the General rate for the goods

under reference in item 42.03.9 should result in little change during the current

period of economic uncertainty.

As mentioned earlier some producers in each of the main product

sectors have been achieving relatively high profits notwithstanding the in­

creased market penetration of imports. Under the level of assistance proposed

it is expected that efficient producers in each sector will be able to maintain

a reasonable level of production and satisfactory profits.

When changes do take place the Commission expects that most of

the displaced producers will be small organisations which do not have large

funds committed to the industry. The adjustments expected will not be of

great economic consequence but could nevertheless be important for the in­

vestors and the individual employees concerned. The Commission suggests

that adjustment assistance be provided in appropriate cases.

12.

LEATHER AND LEATHER RURSTITUTE PRODUCTS

4. GASES

4.1 THE AUSTRALIAN INDUSTRY

4.1.1 The goods under reference

The term 'Cases’ Is used in this report to denote a wide range of

goods included in item 42.02.0. It includes suitcases, trunks and other trav­

elling bags and cases (described generally in this report as ’luggage *) and

shopping bags, airline bags, brief cases and miscellaneous other hags and. cases

(described generally in this report as ’small hags’). The relevant statistical

keys and commodity codes are set out in Appendix E. Moulded cases of elastic

materials, including those vacuum-formed, are not covered by the terms of

reference for the Commission's inquiry. However, such goods are made by some

of the local producers of Cases and are included in some of the statistics for

Cases presented in this report. They account for only a minor portion of the

production and sales of the local industry.

4.1.2 Production

Production of Cases was 3.6 million units (valued at 401.0 million)

in 1966-67 but only 3.3 million (valued at 913.9 million) in 1°72-73 (Table 1).

This decline was attributable mainly to a fall in the production of leather

luggage and plastic and leather small bags, such as shopping and airline bags

(Table 1).

Overall, the production of Cases in 1973-74 was probably about the

same as in 1972-73, according to supplementary evidence submitted by some local

producers. However, this evidence indicated that the production of some types

of Cases, such as plastic luggage, increased, whilst the production of other

types, such as fibre and plastic small hags, declined. Data submitted by five

manufacturers for the early part of 1974-73 indicated that, compared with the.

corresponding period of 1973-74, their production of Cases declined, on awerage,

by about 20 per cent.

Despite the overall decline in the local production of Cases

during the period 1966-67 to 1972-72, the production of luggage increased rron

about 1.6 million units (valued at 36.1 million) to 1.7 million (valued at

SO.4 million) in that period. The main increase occurred in the production of

plastic luggage (Table 1), which, as mentioned above, probably continued to

increase in 1973-74.

13.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Production of small bags declined from about 2.1 million units

(valued at $3.8 million) in 1966-67 to 1.6 million (but with a value

increased to $4.4 million) in 1972-73. Production of leather, fibre and

plastic small bags declined, while that of other types increased (Table 1).

A significant feature of the pattern of local production has been

the rapid decline in production of leather Cases which, even in the high

quality area, have largely given way to plastics. Reasons for preferring plastics

have included their lower price relative to leather, combined with their now

acceptable quality. Plastics are also more uniform, lighter and can be cut

mechanically in large lots, whereas leather often has to be hand cut, one piece

at a time. In addition, plastics can sometimes be welded instead of sewn, thus

reducing labour costs.

4.1.3 Processes

The processes used to make Cases consist essentially of cutting,

bending or forming sheets of leather, plastics, fibreboard, etc. into various

shapes; of gluing, riveting or stitching together the pieces comprising each

article and of fixing the necessary fittings to each article.

4.1.4 Size and structure

According to official statistics, the number of establishments

specialising in the production of Cases declined from 81 at the end of 1968-69

to 70 at the end of 1972-73. In addition, there would have been a few more

establishments - mainly within the Leather Products industry - which made some

types of luggage or small bags, though not as their principal line.

The 70 establishments employed, on average, 19 persons and had an

average value of output of about $200,000 (Table 2). Of the 15 local producers

of Cases represented at the Commission's inquiry, 12 provided evidence of their

sales. These firms accounted for about two-thirds of the value of all locally

made Cases sold in 1971-72. Only seven Case manufacturers gave evidence on

employment and output. These firms were considerably larger than the average,

employing, on average in 1971-72, about 80 persons. This indicates that there

are a large number of small establishments producing Cases; many of these

specialise in the production of particular types of luggage or small bags.

14.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

4.1.5 Employment

Case manufacturers employed about 1,360 persons during 1972-73, or

about 30 per cent of the number employed by all establishments specialising in

Leather Products. Of those employed in making Cases a relatively high proportion

(700 persons or about 52 per cent) were females (Table 2). According to supp­

lementary evidence, employment declined in the early part of 1974-75.

4.1.6 Location

Details of the location of all establishments producing Cases in

Australia were not available to the Commission. However, manufacturers which

took part in the inquiry were fairly evenly divided between the Melbourne and

Sydney metropolitan areas, with one in Brisbane. There was no evidence that any

significant firms were located in non-metropolitan areas.

4.1.7 Materials used

The principal materials used by local producers of Cases are fibre-

board and plastics. Cost data submitted indicate that, on average, materials

accounted for about 40 per cent of the total cost to make and sell Cases. For

particular manufacturers, the materials cost ranged from 36 to 57 per cent

of total costs (Table 3).

Most materials used by Case manufacturers are available from local

sources. The Case industry provides a fairly important outlet for some of the

main materials. An important raw material - fibreboard - is mainly imported

duty free under by-law.

Hylex, a manufacturer of polyvinylchloride (PVC) film and sheet,

coated fabrics and other plastic materials, said that sales to the Case and

Handbag industries were inportant to it, not only because of the additional

volume of production generated, but also because production for these industries

was complementary to production for other industries. Arendsen, which produces

various metal products and fittings, including fasteners for Cases, said that

about 4 per cent of its total sales were made to local Case manufacturers.

15

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

4.1.8 Performance i

Since 1959-60 the quantity of Cases produced in Australia has I ;

declined marginally, although it has fluctuated over the period between 3.1 J

and 3.7 million units per annum (Table 4). In particular, the output of leather i j I

luggage and leather and plastic small bags has declined substantially. However, i !

the production of luggage, especially of plastic luggage, has been increasing j

in recent years (Table 5). 1

The estimated capacity of seven manufacturers accounted for about |

40 per cent of the total value of Australian demand for Cases in 1971-72. '’ ’here ,

were 76 establishments specialising in Cases in 1971-72 and they apparently had

sufficient capacity to provide for the Australian demand in that year. The extent j

to which the seven manufacturers utilised capacity in 1971-72 ranged from 33 to

100 per cent with an average utilisation of about 60 per cent. j

ί

Financial information submitted by witnesses shows that, despite the

decline in local production, profitability of Case manufacture has been relatively

high for a number of producers (Tables 6 and 7). In 1971-72 the most profitable

firms had profit to funds ratios of more than 30 per cent whilst others had losses

or low rates of profit. Overall, it appears that the production of Cases has been

slightly less profitable than the production of Leather Products generally.

Not all witnesses submitted financial information for l°7?-7l.

Several of those which did maintained relatively high rates of profit in that

year. Some of these manufacturers indicated that they experienced lower levels

of profit in 1973-74, although no financial information was submitted for that

year.

4.2 THE AUSTRALIAN MARKET

4.2.1 Imports — --------- 2

Imports of Cases increased from 5.1 million units (valued at S7.2

million landed duty paid (ldp)) in 1966-67 to 7.7 million (valued at $4.6 million

2 Since 1968-69, imports of certain goods (particularly Sports Bags) have not been separately recorded and are included in imports of Cases." However, the quantities and values would not be of sufficient magnitude to distort the statistics for Cases.

16.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

ldp) in 1972-73 and then to 9.9 million (valued at $8.4 million ldp) in 1973-74.

Preliminary data for the nine months ended March 1975 indicate that, compared to

the corresponding period of 1973-74, imports of Cases declined 28 per cent from

7.8 million to 5.6 million units (Table 8).

Imports of luggage declined from 0.4 million units (valued at

$0.9 million ldp) in 1966-67 to 0.3 million (but with a value of $1.0 million)

in 1972-73 (Table 8). The quantity of imports in 1973-74 was about 50 per

cent above the 1966-67 level but the ldp value doubled to about $2.2 million.

Preliminary data for the nine months ended March 1975 indicate that, compared

to the corresponding period of 1973-74, imports of luggage increased 11 per

cent in quantity terms from about 412,000 to 458,000 units (Table 8).

In absolute terms the main increases in imports of luggage in

1973-74 and 1974-75 occurred in non-leather luggage. According to local manu­

facturers, the luggage imported has been mainly cheap, soft-sided vinyl types.

This sector of the luggage market has apparently been dominated by imports.

Local manufacturers indicated that they had virtually ceased production of

these goods and that, in some instances, they were importing them to complement

their ranges of higher quality plastic luggage. Although imports of fibre

luggage are not separately recorded, local producers indicated that very little

had been imported.

Imports of small bags increased substantially from 4.7 million

units (valued at $1.4 million ldp) in 1966-67 to 7.4 million (valued at $3.6

million) in 1972-73 and then to 9.4 million (valued at S6.2 million) in

1973-74. Preliminary data for the nine months ended March 1975 indicate

that, compared to the corresponding period of 1973-74, imports of small bags

declined 30 per cent from 7.4 million to 5.2 million units (Table 8). In

absolute terms the main increase in Imports in 1973-74 occurred in plastic

small bags. However, imports of these goods have since declined sharply,

on an annual basis to less than two-thirds of the quantity imported in 1973-74.

The main sources of import competition in 1973-74 were Hong Kong,

Taiwan and Japan (Table 14). Developing Countries have been of increasing

17.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

significance in recent years, particularly for imports of plastic Cases.

Between 1968-69 and 1973-74, the share of imports coming from Hong Kong inc­

reased from 20 to 35 per cent of the value of all imports and from Taiwan

from 1 to 25 per cent. According to import data for the nine months ended March

1975, the Republic of Korea has become an important source of some types of

Cases.

4.2.2 Demand

In estimating the Australian demand for Cases on a quantity basis,

no allowance has been made for exports. Export quantities are not recorded

for Cases but they are understood to be insignificant. The code under which

the value of Cases exported is recorded covers a wide range of Leather Products,

and in estimating the Australian demand for Cases on a value basis, exports

under this code have been allocated on the basis of witnesses' evidence .

The apparent Australian demand for Cases in 1972-73 was of the

order of 11 million units (of which imports accounted for 70 per cent) an

increase of about 2.4 million since 1966-67 when the import share was 58 per

cent. In regard to luggage, the apparent demand in 1972-73 was about 2.1

million of which imports accounted for about 15 per cent. By comparison the

apparent demand in 1972-73 for small bags was about 9.0 million, of which

imports accounted for about 82 per cent (Table 9).

The value of apparent demand for Cases in Australia in 1972-73

was estimated to be about $18.4 million (Table 10). This represents an

increase of about $6.3 million since 1966-67 (Table 11). The share of the

total value of apparent demand supplied by local manufacturers has declined

from 81 to 75 per cent during this period (Table 12). The differences in

relative market shares based on values vis-a-vis quantities reflect the high

unit values of locally produced Cases compared with those of imported Cases.

In 1972-73, the average unit sales value of locally made Cases was about

seven times the average ldp value of imported Cases.

3 The same problems in calculating demand arose in most other product groups.

18.

LEATHER AMD LEATHER SUBSTITUTE PRODUCTS

The available data suggest that local sales in 1973-74 were

generally about the same level as in 1972-73 despite the substantial increase

in imports in that year. Overall, the Australian demand for Cases in 1973-74

would probably have increased to about 13 million units and the import share

to about 75 per cent.

Some manufacturers reported a decline in sales in the early part

of 1974-75, of the order of 20 per cent on average. Imports in the nine months

to March 1975 also declined, on an annual basis to about 75 per cent of the

level in 1973-74. However, imports of some types of luggage, particularly of

plastic luggage, continued to increase, and this, combined with the reported

decline in local manufacturers' sales, suggests that the import share of the

market for luggage has continued to increase. In regard to the market for

plastic luggage, the import share has probably increased to above the 1972-73

level which was 33 per cent. The import share of the market for most other

types of Cases, however, has probably declined to around that which prevailed

in 1972-73 (Table 9).

The continued increase in imports of plastic luggage .despite an

overall decline in the Australian demand for Cases , was suggested by one

manufacturer to be mainly due to substitution of cheaper, soft-sided and fibre

types for higher quality, locally made luggage. Whilst local manufacturers are

understood to have substantially reduced production of soft-sided luggage, fibre

luggage has been their main product and they have continued to dominate this

market.

4.3 COMPETITIVE P0SITI01I

4.3.1 Costs and cost disabilities

As mentioned in section 4.1.7 materials account for about 40 per

cent of the total cost to make and sell Cases. The extent to which tariffs

on materials affect costs differs among the various types of Cases. According

to estimates made by the Commission, the average tariff rate on the importable

materials used by witnesses during 1971-72 x/as about 23 per cent. Although

some of the tariffs applying to their importable materials were described as

high by the local manufacturers of Cases, the Commission found no instances

in xihich the average tariff rate on the importable materials used in a product

19.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

was as high as the tariff rate applicable to the product itself. The average

tariff rate now applicable to importable materials used by Case manufacturers

would be lower than that quoted above, as a result of the 25 per cent reduct­

ion in tariffs made in July 1973.

While the duties on materials account for some part of the cost

disability of locally produced goods vis-a-vis imports, this is only small.

If duties on materials were totally removed and the appropriate deduction made

from the total cost of materials, the average cost to make and sell Cases would

fall by not more than 7 per cent.

Local manufacturers claimed they were at a significant disadvantage

as regards labour costs in the production of Cases competing against imports,

particularly from Hong Kong, Taiwan and Japan. This was because the manufacture

of Cases is a relatively labour-intensive process.

According to unit cost data submitted to the Commission, direct

labour costs accounted for, on average, about 25 per cent of the total cost

to make and sell a variety of Cases. The labour cost varied from as low as

14 per cent of the total cost to make and sell one type of fibre luggage up

to 41 per cent for a plastic vanity case.

Although the production of Cases is basically labour-intensive,

cost data submitted indicate that some local manufacturers could obtain a

5 per cent reduction in their unit costs from a doubling of their plant capacity.

Flight, a New Zealand manufacturer of luggage, stated that the minimum efficient

scale of production of an aluminium framed, fibre suitcase would probably be

30,000 pieces per annum and that for optimum efficiency, production above 50,000

to 60,000 pieces per annum would be required. The Commission noted that local

manufacturers were generally obtaining these levels of output only in the

production of fibre luggage.

The number of different lines of luggage and small bags made locally

is very large. For example, three of the main manufacturers each listed over

300 lines of luggage in their catalogues. According to the limited unit cost

data submitted, greater specialisation would enable local manufacturers to

achieve cost reductions ranging from 7 to 18 per cent. Savings to be gained

20.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

through specialisation did not appear to be dependent on the type of product

or the material from which it was made.

Local manufacturers were unable to quantify their overall cost

disabilities compared with overseas manufacturers. The Commission also had

insufficient data on which to make such an assessment.

4.3.2 Price disadvantages

The Commission compared the prices of some representative locally

made lines with those of imported lines which in the opinion of the local manu­

facturers were directly competitive. These price comparisons suggested that

the local products generally had a price advantage (or low price disadvantage)

against similar goods from Britain and New Zealand, but they almost invariably

had a large price disadvantage - usually in excess of 100 per cent - against

similar imports from Hong Kong, Taiwan and Japan.

These price disadvantages were particularly high in respect of

small bags, the area in which imports have the greatest share of the market.

On the other hand, the price disadvantages of local manufacturers were

lowest in relation to fibre luggage, the main output of local manufacturers

and the market sector in which import competition is the least intense. Local

manufacturers probably also have significant natural protection against imports

of fibre luggage because of the relatively high freight costs incurred in

importing this type of luggage. Although some manufacturers stated that sub­

stitution of plastic for fibre luggage was occurring, the available data for

1973-74 and the early part of 1974-75 suggested that production of fibre luggage

has remained fairly stable despite the general increase in imports of luggage.

The rates of profit being earned by most local producers suggested

that, in general, they did not have much scope for reducing their prices to

counter increased import competition. A few manufacturers were, however, earn­

ing relatively high rates of profit.

4.4 CASE FOR ASSISTANCE

4.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Cases are 34

per cent General and 13 per cent Preferential (Appendix B). It is estimated

21.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

that the effective rate of protection afforded by the General tariff rate is

about 40 per cent; and that the subsidy equivalents of the current General

rate of protection would be about $3.3 million gross and $2.4 million net.

4.4.2 Assistance requested

In general, the local manufacturers of Cases requested maintenance

of the rates of duty which were operative when the Commission's inquiry began -

that is, 45 per cent General and 17!j per cent Preferential (Appendix E). These

were the rates that applied prior to the 25 per cent tariff cut in July 1973.

However, there were some variations to this request: AC1IA, Herfords and Nedor,

for example, requested rates of protection which would vary with the size and/or

value of the imported goods. The variable rates proposed would in some cases

provide very high ad valorem levels of protection.

It is estimated that the effective rate of protection which would

be afforded Cases by a tariff rate of 45 per cent is about 60 per cent and that

the subsidy equivalents of such protection would be about $4.6 million gross and

$3.6 million net.

4.4.3 Reasons supporting requests

The main reasons advanced by local Case manufacturers in support

of their requests were, apart from cost disabilities and price disadvantages,

that :

(a) their costs are determined by factors largely beyond their control;

(b) they provide employment opportunities, particularly for females, of whom many are immigrants;

(c) they are efficient, and in styling and quality they can match the imported product; and

(d) they provide consumers and retailers with a complete range of products.

4.5 ASSISTANCE TO 3E RECOMMENDED

As mentioned previously, the Commission will recommend a long

term rate of 25 per cent for virtually all goods under reference, including

Cases. The reasons put forward by the local producers of Cases in support of

the higher rates they requested did not, in the opinion of the Commission,

justify such rates in the long term.

22.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

However, in view of recent import trends and market conditions,

the Commission has considered whether any assistance for producers of Cases

might be warranted in addition to the long term assistance which it has

recommended.

According to supplementary, confidential evidence submitted by five

local producers of Cases, their production, sales and employment levels in

1973- 74 were generally about the same as in 1972-73, but have since declined by

an average of around 20 per cent. Imports of Cases increased sharply in 1973-74

to alaost one-third above the 1972-73 level, but, in the first nine months of

1974- 75, declined to approximately three-quarters of the level of imports in

the corresponding period of 1973-74. That is, they have declined to about the

1972-73 level.

Whilst the present difficulties of some local producers may be

partly due to the high level of imports in 1973-74 the sharp decline in imports

in 1974-75 suggests that a fall in demand for Cases has been the major reason for

the decline in sales of those local producers. The Commission considers that a

downturn in demand does not provide grounds for additional assistance particularly

when imports have also declined.

In these circumstances, the Commission has concluded that add­

itional assistance in the short term is not warranted. However, in view of

present market conditions and in order not to exacerbate present difficulties,

the Commission will recommend that implementation of the long term General rate

of 25 per cent be delayed for one year.

It is the Commission's view that adjustment of the Preferential

rate to the recommended long term rate of 25 per cent should be implemented

Immediately. This would involve an increase in the rate of duty from 13 to

25 per cent for Cases.

The Commission considers that, at the recommended General rate,

imports from Hong Kong, Taiwan and the Republic of Korea of Cases classifiable

to item 42.02.9 would be competitive with goods of Australian origin. It there­

fore suggests that Cases from Hong Kong, Taiwan and the Republic of Korea should

be excluded from the Developing Countries scheme, and that imports from other

Developing Countries be kept under review.

23.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

New Zealand has not been a major source of imports of Cases and

the immediate application of minimum rates for these goods from New Zealand

is suggested.

Dodge and Nylex requested that suitcases and other articles made

by the vacuum-forming process falling within item 39.07 be transferred to

item 42.02. Dodge also requested that a separate sub-item in item 42.02 be

created to include all types of suitcases, bags and cases, etc. used in con­

junction with travelling and that the rate of duty for such goods be 45 per

cent General and 171$ per cent Preferential.

The goods now classified to item 39.07 are there by virtue of

Australia's adherence to the Brussels Tariff Nomenclature and it would not

be appropriate for the Commission to recommend their transfer to another item.

In addition, as item 39.07 is not included in the terms of reference for the

inquiry, the Commission has not reviewed the rate of duty on that item. It

is noted, however, that one effect of the Commission's recommendation for the

Cases under reference would be to reduce substantially the differences in the

rates for all types of cases.

The Commission is not satisfied that there is a need for a

separate sub-item within item 42.02 for suitcases, etc. and will not support

the request.

24.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

5. HANDBAGS

5.1 THE AUSTRALIAN INDUSTRY

5.1.1 The goods under reference

The term 'Handbags' in this report covers purses and handbags made

of leather, plastics and other leather substitute materials, included in item

42.02.9. The relevant statistical keys and commodity codes are set out in

Appendix F.

5.1.2 Production

Local production of Handbags was about 4.4 million units in 1966-67

but was only 3.9 million in 1972-73. However, the value of local production

increased from $10.5 million in 1966-67 to $15.7 million in 1972-73 (Table 1).

Production of handbags declined from 2.3 million units (valued

at $9.2 million) in 1966-67 to 2.0 million (but with a value increased to

$12.2 million) in 1972-73.

Production of purses increased from 1.6 million units (valued at

$1.3 million) in 1966-67 to 1.9 million (valued at $3.4 million) in 1972-73.

Production of non-leather purses, particularly those made from materials other

than plastics, increased substantially (Table 1).

According to data submitted by five manufacturers, there was little

change, on average, in the local production of handbags in 1973-74, compared with

1972-73, although one manufacturer's sales declined substantially. Available data

for the early part of 1974-75 indicate that the production of the five manufact­

urers declined although the performance of individual producers varied consider­

ably; one manufacturer's production increased by about 30 per cent, while another's

declined by 20 per cent.

5.1.3 Processes

For each season, the design of Handbags is determined by local

manufacturers according to world fashion trends and their assessment of Australian

requirements. Once the style, size and colour range have been determined, the

processes involved in producing a finished article include cutting, sewing or

otherwise joining the basic material, attaching frames and fittings, finishing

and packing.

25.

l e a t h e r a n d l e a t h e r s u b s t i t u t e p r o d u c t s

5.1.4 Size and structure

At the end of 1972-73, the latest year for which data were avail­

able, there were 75 establishments in Australia specialising in the production

of Handbags. These establishments employed, on average, 17 persons and had an

average value of output of about $230,000 (Table 2). Many of the smaller firms

specialise in the production of a particular type of handbag or purse.

Establishments of the witnesses who gave evidence regarding the

production of Handbags were considerably larger than the average size of all

establishments which specialise in Handbags. Six manufacturers gave evidence

and these employed in 1971-72, on average, about 90 persons. Handbags accounted

for about 87 per cent of the total value of output of these firms in 1971-72, and

their combined sales of such goods accounted for at least 30 per cent of the value

of all locally made Handbags sold in that year.

5.1.5 Employment

Handbag manufacturers employed about 1,250 persons in 1972-73, or

about 28 per cent of the number employed in the production of all Leather Products

(Table 2). About 70 per cent of those employed in making Handbags were females.

5.1.6 Location

Details of the location of all establishments producing Handbags

in Australia were not available to the Commission. However, five of the six

manufacturers which took part in the inquiry were located in the Sydney metro­

politan area, with the other in Melbourne. There was no evidence that any

significant firms were located in non-metropolitan areas.

5.1.7 Materials used

The principal materials used by local producers of Handbags are

plastics, leather and some textile materials. Cost data submitted indicate

that, on average, materials accounted for about 40 per cent of the total cost

to make and sell Handbags. For individual manufacturers, the materials cost

ranged from 35 to 52 per cent of their total costs (Table 3).

26

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The production of Handbags is not a significant market for the

main suppliers of raw materials - that is, the leather tanning and the plastics

industries. Total purchases of leather by Handbag manufacturers would still

have been insignificant relative to the total output of leather, even without

the steady decline in the production of leather handbags since 1959-60 (Table

16). Local producers of Handbags indicated that, while they purchase small

quantities of locally made unsupported PVC, they purchase virtually all their

PVC coated fabrics from overseas suppliers. However, as mentioned in section

4.1.7, Nylex indicated that its sales of PVC materials to the Case and Handbag

industries together were important to it.

Other materials used, such as frames and metal fittings, are

purchased from both local and overseas sources. No details of the importance

of the Handbag market to local suppliers of such goods were submitted to the

Commission.

5.1.8 Performance

Between 1959-60 and 1969-70 the quantity of Handbags produced

increased from 3.7 million to 5.2 million units but declined to 3.9 million

in 1972-73 (Table 4). An increase in production of handbags and purses other

than of leather or plastics over recent years has been accompanied by a

steady decline in the production of leather handbags and, more recently, some

decline in handbags and purses made of plastics (Table 16).

Financial information submitted by witnesses shows that the prod­

uction of Handbags has generally been more profitable than the production of

most other Leather Products (Tables 6 and 7). In 1971-72 the most profitable

firms had profit to funds ratios of more than 30 per cent. Witnesses stated

that the high levels of profitability obtained by some local manufacturers

and the wide variations in profit performance were due largely to the effect

of fashion on the handbag market. Local manufacturers indicated that the

most successful manufacturers in the industry were those which best anticipated

or interpreted fashion trends.

27.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Not all witnesses submitted financial information for 1972-73.

Several of those which did maintained high rates of profit in that year.

Some of these manufacturers indicated that they experienced lower levels

of profit in 1973-74, although no details were supplied to the Commission.

5.2 THE AUSTRALIAN MARKET

5.2.1 Imports

Imports of Handbags declined slightly from 8.3 million units

(valued at $ 2,8 million ldp) in 1966-67 to 8.2 million (but with a value

increased to $5.3 million) in 1972-73 (Table 17).

Data for 1973-74 indicate that, compared to 1972-73, imports of

Handbags increased 22 per cent in quantity terms to almost 10 million units

and 47 per cent in value terms to $7.8 million ldp. For the nine months ended

March 1975 (compared to the corresponding period of 1973-74), inports of Hand­

bags declined 14 per cent in quantity terms from 7.9 million to 6.8 million

units (Table 17).

Imports of handbags declined from 6.5 million units (valued at

$2.3 million ldp) in 1966-67 to 5.2 million (but with a value increased to

$4.3 million) in 1972-73. Data for 1973-74 indicate that, compared to 1972-73,

imports of handbags increased 21 per cent in quantity terms from 5.2 million

to 6.3 million and 50 per cent in value terms to $6.4 million ldp.

Preliminary quantity data for the nine months ended March 1975

indicate that, compared to the same period of 1973-74, imports of handbags

declined by about 12 per cent. Import competition has been most intense in

the supply of non-leather handbags (Table 17).

Imports of purses increased from 1.8 million units (valued at $0.5

million ldp) in 1966-67 to 3.0 million (valued at $1.0 million) in 1972-73.

Data for 1973-74 show that, compared to 1972-73, imports of purses increased

23 per cent in quantity terms from 3 million to 3.7 million and 34 per cent in

value terms to $1.4 million ldp.

28.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Preliminary data for the nine months ended March 1975 indicate

that, compared to the same period of 1973-74, the quantity of purses imported

declined by about 17 per cent (Table 17).

The main types of handbags imported appear to have been lower

priced, plastic handbags. Local producers indicated that the greater part of

the Australian market for these goods had been captured by imports in recent

years and that these goods are substituting for the higher quality locally

made handbags. They also indicated that they had virtually ceased production

of cheap, plastic handbags and that some of them were importing these goods to

complement their own ranges. According to the evidence submitted, the value of

imports of handbags, purses and other Leather Products by four local producers

was about $0.5 million in 1971-72.

In value terms, the main sources of import competition in 1973-74

were Hong Kong, Taiwan, Japan and Italy (Table 14). Imports from some Develop­

ing Countries have become increasingly significant. For example, between 1968­

69 and 1973-74 the share of imports coming from Hong Kong increased from 37 to

45 per cent and from Taiwan from less than 1 per cent to 14 per cent. Data for

the nine months ended March 1975 indicated that the Republic of Korea has also

become an increasingly significant source of imports, particularly of plastic

handbags.

5.2.2 Demand

The apparent Australian demand^for Handbags in 1972-73 was of the

order of 12.1 million units, compared with 12.7 million in 1966-67. Imports in

1972-73 amounted to about 8.2 million units, which was slightly less than the

level in 1966-67. The import share of the total apparent demand, however,

increased from about 65 to 68 per cent. In relation to handbags, the apparent

demand in 1972-73 was 7.1 million, of which imports accounted for 73 per cent.

The apparent demand for purses in 1972-73 was 5.0 million items, of which

imports accounted for 61 per cent (Table 18).

4 See footnote 3 in section 4.2.2 .

29.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The main increase in the quantity imported in 1973-74 compared

with 1972-73 was in relation to handbags, with a smaller increase for purses.

As production remained fairly steady in 1973-74, the local manufacturers'

share of the Australian market for both handbags and purses would have declined.

Based on the level of imports in the first nine months of 1974-75 and on local

manufacturers' production in the early part of that year, demand would appear

to have declined in 1974-75 to around the 1972-73 level.

The value of apparent demand for Handbags in Australia in 1972-73

was estimated by the Commission to be about 520.8 million (Table 10). This

represents an increase of about $7.6 million since 1966-67 (Table 11). Local

sales increased from $10.5 million to $15.5 million during this period, while

imports increased from $2.8 million to $5.3 million Idp. Exports have been

insignificant being less than $100,000 in each year of the period reviewed.

The share of the total value of apparent demand supplied by local manufactur­

ers declined from 79 to 75 per cent during this period (Table 12).

The differences in relative market shares based on values vis-a-vis

quantities reflect the higher unit values of locally produced Handbags compared

with those of imported Handbags. In 1972-73, the average unit sales value of

locally made Handbags was about six times the average ldp value of imported

Handbags.

5.3 COMPETITIVE POSITION

5.3.1 Costs and cost disabilities

According to data submitted to the Commission, there are wide

variations in the unit costs of Handbags among manufacturers and between indiv­

idual product lines. Cost differences relate mainly to the nature of the product

and the market for which it has been manufactured. These cost differences,

therefore, are due mainly to the extent to which the product line is designed to

cater for the fashion sector of the market, x/hich, in turn, is reflected in

differences in the types of materials used, the degree of processing undertaken,

and the length of production runs.

30.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The cost to make and sell the most expensive plastic handbag

appears to be about the same as that of the cheapest leather handbag, but

about half that of the most expensive leather one, according to the cost

data submitted. Only one manufacturer submitted cost data relating to purses,

and this was insufficient to make an assessment of the cost differences for

the various types of purses.

As mentioned in section 5.1.7, materials account for about 40

per cent on average of the total cost to make and sell Handbags. However, in

the case of plastic handbags, materials accounted for between 26 and 41 per

cent of the total cost to make and sell particular product lines, while in the

case of leather handbags, the range was 41 to 50 per cent. Conversely, labour

accounted for a larger proportion of unit costs in plastic handbags as against

leather ones, and varied between one-quarter and one-half of the total cost.

Local manufacturers expressed concern at the levels of the tariffs

on importable raw materials (particularly PVC materials), whether they had been

imported directly or purchased locally at prices which reflect the protection

available to the local manufacturers. The extent to which tariffs on materials

affect costs differs among the various types of Handbags. According to esti­

mates made by the Commission, the average tariff rate on the importable materials

used by local manufacturers during 1971-72 was about 21 per cent, a significantly

lower rate than that which applied to the product in which the materials were

used. The tariff rates now applicable to importable materials used by Handbag

manufacturers would, of course, be lower than that quoted above, as a result of

the 25 per cent reduction of tariffs made in July 1973.

While the duties on materials account for some part of the cost

disability of locally produced goods vis—a—vis imports, this part is only small.

If duties on materials were totally removed and the appropriate deduction was

made from the total cost of materials, the average cost to make and sell Handbags

would fall by about 5 per cent.

Local manufacturers claimed they were at a significant disadvantage

because of the disabilities in labour costs particularly against imports from

Asian countries. This is not unexpected as the manufacture of Handbags is a

31.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

relatively labour-intensive process. According to unit cost data submitted to

the Commission, direct labour costs accounted for, on average, about 34 per cent

of the total cost to make and sell a variety of Handbags.

The relatively high labour-intensity also precludes the achieve­

ment of significant economies of scale by Handbag manufacturers. In addition,

the Handbag industry, being largely a fashion industry, does not lend itself to

a high degree of product specialisation. A feature of Handbag manufacture is

the wide range of products produced by local manufacturers. They produce

virtually a completely new range of products insofar as designs, styles and

colours are concerned approximately every six months in order to co-ordinate

their product lines with fashion changes in the clothing and footwear industries.

Local producers are unable to concentrate their production on a limited range of

lines, styles, etc. because imports have captured virtually all of the market for

the cheaper, standard, high volume lines, and because the market for high quality

and fashion goods, which local producers mostly manufacture, is constantly chang­

ing.

Local manufacturers were unable to quantify their overall cost

disabilities per unit of output vis-a-vis overseas manufacturers. The

Commission had insufficient data on which to make any worthwhile assessment.

5.3.2 Price disadvantages

The Commission compared the prices of some representative locally

made handbags and purses with those of imported lines which in the opinion of

the local manufacturers were directly competitive. These price comparisons

suggested that local products generally had a price advantage against similar

products from France, Federal Republic of Germany, New Zealand and Britain, but

they invariably had a very large price disadvantage - frequently well in excess

of 100 per cent - against similar imports from most Asian countries. Price

disadvantages had been particularly high in respect of plastic handbags and

purses, the market sectors in which imports have had a large share (Table 18).

On the other hand, the price disabilities of local manufacturers were lowest

32.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

in relation to leather handbags and purses, the market sectors in which

there is relatively less import competition, Australian production has

tended to cater £or the fashion sector of the market, while imports from

Asian countries, although physically comparable with the local product, have

captured almost all of that sector of the market in which fashion has not been

so important.

As already mentioned, local manufacturers indicated that they had

ceased production of some goods (mainly low priced plastic handbags) and were

importing to supplement their own product ranges. In most instances imports have

been of goods for which the local manufacturers had large price disadvantages.

According to estimates made by the Commission, even the high rates

of protection requested by local manufacturers would not be sufficient to offset

the very large differences between domestic and import prices over a wide range

of Handbags. The rates of profit being earned by most local manufacturers

suggested that, in general, they did not have much scope for reducing their

prices to counter increased import competition. A few manufacturers were,

however, earning relatively high rates of profit.

5.4 CASE FOR ASSISTANCE

5.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Handbags are

34 per cent General and 13 per cent Preferential (Appendix B). It is estimated

that the effective rate of protection afforded such goods by the General tariff

rate is about 40 per cent; and that the subsidy equivalents of the current

General rate of protection would be about $3.5 million gross and $2.8 million

net.

5.4.2 Assistance requested

The assistance requested by the major local manufacturers of Hand­

bags consisted of specific duties on the lower priced goods and ad valorem rates

ranging from 35 to 45 per cent on the higher priced goods. As an alternative,

33.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

the manufacturers requested some form of quantitative restriction of imports

to operate for a minimum period of five years to allow imports a maximum share

of 20 per cent of the Australian market.

In a supplementary submission early in 1975, some local producers

of Handbags amended their original requests to include requests for short term

assistance by tariff quotas with a penalty duty on imports exceeding the quotas

and the immediate removal of the Developing Countries preference on Handbags and

certain other goods falling to item 42.02.9. (Appendix E).

The tariff rates requested by local manufacturers would in certain

cases provide very high rates of protection. For example, the ad valorem equi­

valents of the specific duties originally requested would range from 85 per cent

for a plastic handbag with a value for duty of $1.00 to about 165 per cent for

a plastic handbag with a value for duty of 50 cents. Rates of duty requested

for purses ranged from 45 to about 140 per cent in ad valorem equivalents.

It is estimated that the average effective rate of protection

which would be afforded all Handbags by an ad valorem rate of 35 per cent would

be about 40 per cent and of 45 per cent would be about 60 per cent. The subsidy

equivalents of protection at 45 per cent would be about $4.8 million gross and

$4.3 million net. The protection provided by the requested specific duties would

be much higher. The requested alternatives involving quantitative restrictions

would entail even higher levels of protection.

5.4.3 Reasons supporting requests

The main reasons advanced by local Handbag manufacturers in support

of their requests were, apart from cost disabilities and price disadvantages,

that:

(a) the industry's duty needs are mostly moderate;

(b) the industry provides continuity of supply together with a product range and variety to the benefit of the purchasing public;

(c) the industry is a significant employer of semi-skilled labour, particularly immigrant labour; and

(d) the industry's costs are determined by factors largely beyond its control.

34.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

5.5 ASSISTANCE TO BE RECOMMENDED

For the general reasons set out In section 3, the Commission will

recommend a long term rate of 25 per cent for Handbags. The reasons advanced

by the local producers in support of the higher rates they requested did not,

in the opinion of the Commission, justify such rates.

In view of recent import trends and market conditions, the

Commission has considered whether any assistance for producers cf Handbags

might be warranted in addition to the long term assistance which it has

recommended.

Supplementary evidence indicates that, although the performance

of individual producers varied, local production of Handbags in 1973-74 was

about the same as in 1972-73, but declined in 1974-75. Imports increased by

about 22 per cent in 1973-74 but have since declined, on an annual basis to

a level slightly above the 1972-73 level.

Whilst the higher level of imports in 1973-74 has probably con­

tributed to the difficulties of local producers, the Commission considers that

that the major reason for the decline in sales has been a fall in demand. The

Commission does not consider that a downturn in demand, in itself, provides

grounds for additional assistance against imports, particularly when imports

have also declined substantially.

In these circumstances, the Commission has concluded that addi­

tional assistance in the short term is not warranted. .However, in view of

present market conditions and in order not to exacerbate present difficulties,

the Commission will recommend that implementation of the long term rate of 25

per cent be delayed for a year.

The Commission considers that adjustment of the Preferential rate

to the recommended long term rate of 25 per cent should be implemented immed­

iately. This would involve an increase in the rate of duty from 13 to 25 per

cent.

35

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission has concluded that, at the recommended General

rate, imports of Handbags from Hong Kong, Taiwan and the Republic of Korea

would be competitive with goods of Australian origin. It therefore suggests

that Handbags from those three countries should be excluded from the Devel­

oping Countries preference scheme, and that imports from other Developing

Countries be kept under review.

New Zealand has not been a major source of imports of Handbags

and the immediate application of minimum rates for these goods from New

Zealand is suggested.

Local manufacturers of Handbags claimed that the cancellation

of by-law concessions for PVC coated fabrics as a result of Tariff Board reports

in 1966 and 1971 had imposed an unnecessary and iniquitous cost burden on the

industry. They said that with by-law admission of their major raw material, they

would be very much better placed to meet import competition in finished PVC

handbags. In supplementary evidence, local handbag manufacturers requested that

the Commission give consideration to making a comment in its report regarding

the desirability of by-law admission of PVC coated fabrics used in the manufac­

ture of handbags.

Nylex, a local manufacturer of PVC coated fabrics, opposed by-law

admission of these materials and claimed that it could meet the requirements

of the local handbag manufacturers.

The desirability or otherwise of by-law admission of PVC coated

fabrics was not covered in detail in the Commission's inquiry. In view of

this and in the light of the comments in section 5.3.1 of this report regarding

the small reduction in unit costs that would result from the total removal of

duties on materials used in the manufacture of Handbags, the Commission will not

comment specifically on the matter. It suggests that applications for by-law

admission of materials should be dealt with as they arise by the Department of

Police and Customs in accordance with normal criteria.

36.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

6. LEATHER BELTS

6.1 THE AUSTRALIAN INDUSTRY

6.1.1 The goods under reference

The term 'Leather Belts' In this report covers all leather dress

belts included in item 42.03.9. The relevant statistical keys and commodity

codes are set out in Appendix F. Some producers of Leather Belts also make

vinyl belts, but such belts are not covered by the present reference.

6.1.2 Production

The total number of Leather Belts made by all local producers in

1972-73 was about 2.2 million, or approximately the same number as made loc­

ally in 1966-67 (Table 1). Hen's and boys' Leather Belts predominate. In .

value terms, production of Leather Belts increased from $2.0 million in 1966-67

to $4.8 million in 1972-73 (Table 1).

Details submitted by three local manufacturers indicate that

production in 1973-74, compared to 1972-73, declined on average by about 7

per cent in quantity terms and by about 14 per cent in value terms, although

the performance of individual producers varied substantially. Production of

the three in the early part of 1974-75, compared to the early part of 1973-74,

declined by about 20 per cent in both quantity and value terms.

6.1.3 Processes

The processes used to make Leather Belts consist essentially of

cutting leather into strips, bevelling the edges, gluing and/or stitching the

leather together, polishing and finishing, and fixing ttie buckle to the article.

6.1.4 Size and structure

At the end of 1972-73, there were 26 establishments in Australia

specialising in the production of Leather Belts (Table 2). Some establishments

which specialise in making other goods under reference, such as wallets, desk

accessories, and miscellaneous gift lines, also make some Leather Belts. The

26 establishments mentioned above employed, on average, 16 persons and had an

average value of output of $260,000 in 1972-73.

37.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Local producers of Leather Belts were represented by nine firms

at the Commission's inquiry. Leather Belts accounted for nearly 80 per cent

of the total value of output of these firms in 1971-72, and their combined

sales of these goods accounted for about 90 per cent of all locally made

Leather Belts sold in that year.

6.1.5 Employment

Leather Belt manufacturers employed about 430 persons during 1972-73

or about 10 per cent of the total number of persons employed in the production

of all Leather Products (Table 2). About two-thirds of the persons employed

were females.

6.1.6 Location

Most of the local manufacturers taking part in the inquiry were

located in either the Melbourne or Sydney metropolitan areas, with one being

located in Brisbane. There was no evidence that any significant firms were

located in non-metropolitan areas.

6.1.7 Materials used

Leather, and metal buckles and fittings are the main materials

used in the manufacture of Leather Belts. On average, materials accounted

for 47 per cent of the total cost to make and sell Leather Belts, but ranged

from 39 to 61 per cent for individual manufacturers (Table 3).

One of the two main local producers of buckles, Arendsen, provided

information on the importance to it of the local production of belts. Arendsen

indicated that sales of buckles to local producers of belts accounted for

about 20 per cent of the firm's total sales. The total number of persons

employed by the company was about 200. The Commission noted that producers

of buckles do not depend exclusively on local producers of belts for their

domestic sales. Some belts are imported without buckles. In addition, Arendsen

indicated that it exports a significant percentage of its output of buckles.

38.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

6.1.8 Performance

Financial information submitted by tidinesses shows that the

production of Leather Belts has generally been as profitable as the product­

ion of most other Leather Products (Tables 6 and 7). Profitability data for

1971- 72 show, however, that two firms had profit to funds ratios of more than

40 per cent and another two more than 20 per cent.

Profitability data for those manufacturers which submitted details

indicate that several manufacturers experienced lower levels of profit in

1972- 73, but that these profit levels were satisfactory. No profitability data

were supplied for 1973-74.

6.2 THE AUSTRALIAN MARKET

6.2.1 Imports

Imports of Leather Belts are recorded under a tariff item which

covers various types of clothing and accessories including motorcyclist's

leather suits, leather trousers, aprons, etc. However, inquiries by the

Commission revealed that Leather Belts have constituted about two-thirds of

all imports under this item in recent years. For the purpose of this report,

the Commission has assumed that this proportion has applied to the imports in

all years reviewed. As imports have supplied such a small part of the market

for Leather Belts, any error caused by adopting this approach would be insig­

nificant.

Imports increased from $44,000 to $141,000 ldp between 1966-67 and

1972- 73. In 1973-74, they increased a further 136 per cent to about $330,000

ldp. Data for the nine months ended March 1975 indicate that, compared to the

corresponding period of 1973-74, imports of Leather Belts increased 26 per cent

in value terms from about $235,000 to about $298,000. The main sources of

imports in recent years have been Britain, Taiwan and Italy (Table 14). However,

in the first half of 1974-75 Hong Kong and France emerged as major suppliers.

Imports from Taiwan increased substantially from a negligible share

of total imports in 1971-72, to 12 per cent in 1972-73, and to 15 per cent in

1973- 74. Inquiries revealed that a high proportion of the Leather Belts from

Taiwan was imported by a local manufacturer duty free or at concessional rates

either under the Developing Countries preference scheme or under the concessions

39.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

accorded certain handicraft goods. However, for a period of 15 months to

the end of March 1975, imports of Leather Belts from Taiwan amounted to less

than $10,000 fob.

6.2.2 Demand

The value of the apparent demand for Leather Belts in Australia

in 1972-73 was estimated to have been about $4.6 million (Table 10), or more

than double the value of apparent demand in 1966-67 (Table 11). Local manufact­

urers supplied at least 94 per cent of the Australian market in all years from

1966-67 to 1972-73 (Table 12).

On the basis of the reported decline in local manufacturers'

sales and the increase in imports in 1973-74, demand in that year is

estimated to have fallen to about $4.2 million and the import share to have

doubled to about 8 per cent. According to the limited data available, it

would appear that local producers' sales continued to decline in 1974-75.

Although imports increased in 1974-75, total demand apparently continued to

decline.

The wide fluctuations that have occurred in the Australian demand

for Leather Belts, have been largely due to fashion influences in the clothing

market. The value of demand for Leather Belts increased markedly during 1971-72

and 1972-73 after a period of years in which there was virtually no change in

demand (Table 11). This was due largely to a fashion change which caused

Leather Belts to become a popular clothing accessory rather than just a utility

article. The recent apparent decline in the demand for Leather Belts was also

a result of a fashion change. According to one local producer of Leather Belts,

a recent fashion trend in men's trousers has been for jeans and other casual

slacks to be self-supporting so that the wearer does not require a belt. This

has resulted in the loss of a major market, particularly the teenage market,

for local producers of Leather Belts.

Exports of Leather Belts are recorded under an item which covers

various types of clothing and accessories. However, based on the evidence of

local producers, the bulk of the exports recorded under this item would be

40.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Leather Belts. Exports under this item increased steadily during recent years,

from about $90,000 in 1966-67 to $235,000 in 1973-74 (Table 15). The main

markets have been Britain, Papua New Guinea and Hong Kong. In 1973-74, Britain

accounted for 45 per cent, Papua New Guinea 12 per cent and Hong Kong 11 per

cent of Australia's exports of Leather Belts.

6.3 COMPETITIVE POSITION

6.3.1 Costs and cost disabilities

The unit costs of belts vary according to the types of materials

used, the degree of processing undertaken (such as embossing and polishing)

and the lengths of production runs. The unit cost of the most expensive belt

for which the Commission received data was about 60 per cent above the unit

cost of the cheapest belt.

Materials and labour are the most important cost items. On

average, material costs were about 55 per cent of the total cost to make and

sell various types of Leather Belts, while direct labour represented 15 per

cent. Selling and distribution expenses, accounting for an average of 16 per

cent, were higher than for most other product groups, due partly to the cost

of a stock service provided by some manufacturers for retailers. This service

added to marketing costs but provided local manufacturers with some advantages

in competing with imports. Local manufacturers claimed that they were at a

significant disadvantage as regards labour costs in competing against imports, but

no overall assessment of their cost disabilities was submitted.

6.3.2 Price disadvantages

Comparisons between the prices of domestic and imported belts

revealed that the ex factory prices of locally made belts were generally

below the landed duty free prices of similar belts imported from Britain,

France, Italy, USA and New Zealand, and well above the landed duty free

prices of belts from Japan, Hong Kong and Taiwan.

A feature of the level and pattern of imports of Leather Belts

in recent years is that they do not seem to have been strongly influenced

by the relative prices of domestic and imported belts. Many of the imported

41.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

belts have come from European countries, despite the price advantages of

domestic manufacturers. In addition, despite the considerable price dis­

advantages local manufacturers had against imports from Asian countries,

such imports still represent a relatively small proportion of the market.

Local manufacturers indicated that, because the demand for Leather

Belts had been influenced in recent years by fashion trends in Australia, the

price advantage of belts from some Asian countries had not resulted in more

imports from those countries. Local producers claim to be fairly aggressive

in keeping up to date and in advance of overseas countries in terms of styles

and designs. The requirements of fashion may also explain the fact that a

considerable quantity of Leather Belts have been exported to Hong Kong, one

of the main sources of the lower priced belts sold in Australia.

6.4 CASE FOR ASSISTANCE .

6.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Leather

Belts are 42 per cent General (including primage) and 17 per cent Preferential

(Appendix B). According to estimates made by the Commission the average eff­

ective rate of protection afforded the production of Leather Belts by such a

General tariff rate is about 85 per cent. The subsidy equivalents of the

present General tariff rate are about $1.3 million gross and $1.1. million

net.

6.4.2 Assistance requested

The rate of duty requested by most manufacturers was 45 per cent

(General and Preferential) (Appendix E). However, Lyall Robertson and Madison

requested maintenance of the rates operative at the time of the Commission's

hearing (575j per cent General including primage, and 22^ per cent Preferential),

and Madison also requested quantitative restrictions.

It is estimated that the average effective rate of protection

which would be afforded Leather Belts by a tariff rate of 45 per cent would

be nearly 90 per cent, and the gross subsidy equivalent of such a tariff

would be about $1.4 million. The net subsidy equivalent would be about $1.2

million.

42

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

6.4.3 Reasons supporting requests

The main reasons advanced by local Leather Belt manufacturers

in support of their requests were, apart from cost disabilities and price

disadvantages, that :

(a) the industry is economic and has achieved higher levels of output and domestic and export sales in recent years;

(b) the industry is efficient in that the machinery employed is up to world standards, local production techniques achieve the best possible cost benefits, and the latest fashion trends are adopted;

(c) the industry has a high labour cost disadvantage;

(d) the industry is a significant purchaser of locally made raw materials and component parts; and

(e) the industry provides employment opportunities, especially for female immigrants.

6.5 ASSISTANCE TO BE RECOMMENDED

The Commission will recommend that Leather Belts should be

accorded the same long term rate of tariff protection as it is recommending

for virtually all goods under reference - that is, 25 per cent General.

The reasons advanced by the local producers in support of the

higher rates they requested did not, in the opinion of the Commission, justify

such rates. However, in view of the present difficulties of some local manu­

facturers and recent trends in market conditions, the Commission has considered

whether any assistance for producers of Leather Belts might be warranted in

addition to the long term assistance which it has recommended.

Whilst imports increased in 1973-74 and 1974-75, they supplied

only a small part of the total Australian market. A fall in the demand for

Leather Belts, which has resulted largely from the apparent fashion changes

mentioned in section 6.2.2, has been the major reason for the reduced sales

and employment levels of some local producers· As mentioned earlier the

Commission considers that a downturn in demand does not, in itself, provide

grounds for additional assistance.

43.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

In these circumstances, the Commission has concluded that short

term assistance is not justified. However, in view of present market con­

ditions, the Commission will recommend that the reduction of the present

General rate from 42 per cent to 25 per cent should be phased in. It will

recommend that the General rate be reduced on implementation of this report

to 34 per cent (the rate currently applying to most other goods under refer­

ence) and that implementation of the long term rate of 25 per cent be delayed

for one year. Adjustment of the Preferential rate of 17 per cent to the

recommended long term rate of 25 per cent should be implemented immediately.

New Zealand has not been a major source of imports of Leather Belts

and the immediate application of minimum rates for these goods from New Zealand

is suggested.

44.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

7. WALLETS

7.1 THE AUSTRALIAN INDUSTRY

7.1.1 The Roods under reference

The term 'Wallets' in this report denotes a range of products

included in item 42.02.9, and covers wallets, billfolds and key containers

made principally from leather and plastics. The relevant statistical keys

and commodity codes are set out in Appendix F.

7.1.2 Production

The local production of Wallets increased from 0.9 million in

1966-67 to 1.5 million in 1972-73. The main growth was in the production of

plastic Wallets, which increased from 450,000 units (valued at $59,000) in

1966-67 to 835,000 (valued at $320,000) in 1972-73. Production of leather

Wallets increased from about 470,000 units (valued at $1.1 million) to

about 670,000 (valued at $1.9 million) over the same period (Table 1).

The limited data supplied by local manufacturers for 1973-74 and

the early part of 1974-75 suggest that, although there have been variations,

the overall level of production has not increased and may even have declined.

7.1.3 Processes

The processes involved in producing Wallets consist mainly of

cutting the leather or plastics, splitting and skiving, creasing, embossing,

gluing and/or stitching the materials, and various finishing operations. "

7.1.4 Size and structure .

At the end of 1972-73, there xvere 12 establishments in Australia

specialising in the production of Wallets, employing, on average, 9 persons

and having an average value of output of approximately $140,000 (Table 2).

Local manufacturers of Wallets were represented at the inquiry by

three firms which specialised in the production of Wallets and by a further three

which specialised in other goods under reference. Wallets accounted for about

30 per cent of the total value of output of these six firms in 1971-72, and their

45.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

combined sales of Wallets accounted for about two-thirds of the value of all

locally made Wallets sold in that year. Nearly all the Wallets made by these

firms were of leather.

7.1.5 Employment

Wallet manufacturers employed a little over 100 persons in 1972­

73. About 70 per cent of employees were females (Table 2).

7.1.6 Location

Local manufacturers taking part in the inquiry were mainly located

in the Melbourne and Sydney metropolitan areas. There was no evidence that any

significant firms were located in non-metropolitan areas.

7.1.7 Materials used

The principal materials used by local producers are leather and

plastics. Cost data submitted by leather Wallet producers indicate that, on

average, materials accounted for about 45 per cent of the total costs (Table 3).

7.1.8 Performance

On the basis of evidence submitted by witnesses which specialise

in the production of Wallets, profitability, on average, has been higher for

producers in this product group than for producers of most other Leather Pro­

ducts. The average rate of return for the three specialist producers of Wallets

in 1971-72 was 22 per cent, compared with the average of 13 per cent for all 29

witnesses.

7.2 THE AUSTRALIAN MARKET

7.2.1 Imports

Imports of Wallets were 1.8 million units in both 1966-67 and 1972­

73 but the value increased from $0.5 million ldp in 1966-67 to $1.1 million in

1972-73. In quantity terms, imports of leather Wallets increased from about

250,000 units in 1966-67 to about 630,000 in 1972-73, while those of plastics

declined from about 1.6 million units to about 1.2 million over the same period

(Table 19).

46.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

In 1973-74 imports of Wallets rose sharply to 2.8 million units

(valued at $1.3 million ldp). The main increase was in imports of plastic

Wallets which rose by 0.8 million units. Data for the nine months ended

March 1975 indicate that, compared with the corresponding period of 1973-74,

the quantity of imports of Wallets was about the same; while imports of

leather Wallets increased 32 per cent in quantity terms in this period,

imports of plastic Wallets declined 13 per cent.

The main sources of imports of plastic and other non-leather

Wallets on a quantity basis have been Hong Kong, Japan and Britain. Imports of

leather Wallets, on the other hand, have originated mainly from New Zealand,

Japan and China. Whilst imports from Japan and China declined in the nine

months ended March 1975, imports from New Zealand have increased sharply with

the result that New Zealand was the major source of imported leather Wallets

in that period. On an annual basis, imports of leather Wallets from Hew

Zealand in the nine months ended March 1975 are running about 54 per cent above

the level imported from that country in 1973-74. Imports of Wallets of other

than leather or plastics from New Zealand showed a sharp increase on a quantity

basis in the nine months ended March 1975, but are known to have included several

large shipments of very cheap Wallets for commercial use.

7.2.2 Demand

The apparent Australian demand*’ for Wallets in 1972-73 was of the

order of 3.2 million units, an increase of 450,000 since 1966-67 (Table 20).

The local manufacturers' share in quantity terms of the total apparent demand

increased from 34 per cent in 1966—67, to 42 per cent in 1972-73. The demand

for leather Wallets increased sharply from about 710,000 in 1966-67, to 1.2

million in 1972-73, and the local manufacturers' share of this sector of the

market declined in those years from 66 per cent to 49 per cent. The demand

for plastic Wallets, however, was about the same in both 1966-67 and 1972-73,

although the local manufacturers' share increased from 22 per cent to 37 per

cent. Available data for 1973-74 and the early part of 1974-75 indicate that

the local manufacturers' share of the market for both leather and plastic

Wallets has declined since 1972-73.

5 See footnote 3 in section 4.2.2.

47.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The total value of apparent demand for Wallets in Australia in­

creased from $1.6 million in 1966-67, to $3.0 million in 1972-73 (Table 11).

The share of the total value of apparent demand supplied by local manufact­

urers declined from 69 to 65 per cent in this period (Table 12).

7.3 COMPETITIVE POSITION

7.3.1 Costs and cost disabilities

The unit costs of leather Wallets vary widely among manufacturers

and between individual product lines. According to information submitted to

the Commission, the unit costs of the most expensive lines can be well over

twice the costs of the cheapest lines. These cost variations seem to be due

mainly to differences in the materials used, the degree of processing under­

taken and the level of expenditure on selling and distribution. On average,

materials were about 45 per cent of the total cost to make and sell various

types of leather Wallets, while selling and distribution represented 19

per cent, the highest figure for any of the product groups for which such

information was submitted.

Local manufacturers claimed that labour was their major cost dis­

advantage compared with overseas manufacturers. According to cost data sub­

mitted for a number of different types of leather Wallets, labour accounted

for, on average, 26 per cent of the total cost to make and sell those Wallets.

However, in one case labour accounted for 35 per cent of the total cost. No

cost data for the production of plastic Wallets were submitted.

7.3.2 Price disadvantages

The Commission compared the prices of some locally made Wallets

which manufacturers regarded as representative of their output, with the prices

of some imported competitive lines. These price comparisons indicated that

local manufacturers, when their prices were adjusted to allow a reasonable return

on funds, generally had a price disadvantage against imports of leather Wallets,

ranging from about 25 per cent against imports from New Zealand to a very large

price disadvantage - often in excess of 100 per cent - against similar imports

from Japan and India. Witnesses claimed that New Zealand manufacturers enjoyed

some cost advantages over Australian producers of Wallets largely because of

higher labour costs in Australia due particularly to the earlier introduction of

48

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

equal pay for women. The operation of New Zealand's export Incentive scheme

was advanced as an additional reason for the price advantages of the New Zealand

producers in the Australian market.

7.4 CASE FOR ASSISTANCE

7.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Wallets are

34 per cent General, 13 per cent Preferential and 6 per cent for goods of New

Zealand origin (Appendix B). It is estimated that the average effective rate

of protection afforded such goods by the General tariff rate is about 50 per

cent; and that the subsidy equivalents of the current General rate would be

about $250,000 gross and $210,000 net.

7.4.2 Assistance requested

In general, the local manufacturers of Wallets requested main­

tenance of the General rate of duty which was operative when the Commission's

inquiry began - that is, 45 per cent - and elimination of the margin of

preference for Wallets from New Zealand (Appendix E.) It is estimated that

the average effective rate of protection which would be afforded Wallets by a

tariff rate of 45 per cent would be about 70 per cent and the subsidy equival­

ents would be about $340,000 gross and $290,000 net.

7.4.3 Reasons supporting requests

The main reasons advanced by the local producers in support of the

assistance requested were, apart from cost disabilities and price disadvantages,

that :

(a) the industry provides employment for skilled labour; and

(b) in relation to the New Zealand request, Australian exports to New Zealand were restricted.

7.5 ASSISTANCE TO 3E RECOMMENDED

For the general reasons set out in section 3, the Commission will

recommend a long term rate of 25 per cent for Wallets. The reasons advanced by

the local producers in support of the higher rates they requested did not, in

the opinion of the Commission, justify such rates.

49.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission notes that the level of Imports of leather Wallets

of New Zealand origin increased sharply in the nine months ended March 1975 and

that New Zealand became the major source of imports of leather Wallets in that

period. The significant position that imports from New Zealand now hold in the

Australian market for leather Wallets has been partly due to the New Zealand

Government's export incentive scheme, partly due to the reduction on 19 July

1973 in the rate of duty from 17% per cent to about 6 per cent, and partly

due to an improvement in New Zealand manufacturers' cost structures relative

to those of Australian producers as a result of the higher labour costs in

Australia. Imports of non-leather Wallets from New Zealand have not apparently

been of major concern to Australian producers.

In these circumstances, the Commission considers that the approp­

riate rate of duty on leather Wallets of New Zealand origin is 25 per cent.

However, as there are special trading arrangements between Australia and New

Zealand, the Commission suggests that the possibility of a mutually acceptable

agreement on trade in leather Wallets be explored between the two countries.

In the absence of such an agreement, the recommended General rate of 25 per

cent should apply. Minimum rates are suggested for New Zealand imports of

other types of Wallets.

In view of recent import trends, the Commission has considered

whether any assistance for producers of Wallets might be justified in addition

to the long term assistance which it has recommended.

It has concluded that such assistance is not warranted. Apart

from leather Wallets of New Zealand origin in respect of which assistance has

been recommended, imports generally have declined slightly in the nine months

ended March 1975. Furthermore, limited data from local producers for the

early part of 1974-75 indicated that not all of them had experienced lower

levels of production and employment in that period.

The Commission has recommended that implementation of the long

term rate of duty for Cases and Handbags which fall within the same tariff item

as Wallets be delayed for one year, and will recommend similarly for Wallets.

50

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

The Commission considers that the adjustment in the Preferential

rate of 13 per cent to the long term rate of 25 per cent should be implemented

immediately, and that the suggested increase to 25 per cent in the Mew Zealand

rate for leather Wallets in the absence of a mutually acceptable agreement

should also be implemented immediately.

The Commission considers that, at the recommended General rate,

imports of Wallets from Hong Kong, Taiwan and the Republic of Korea would be

competitive with similar goods of Australian origin. To date Hong Kong is

the only Developing Country from which imports of Wallets have been received

in substantial quantities. However, the performance of Taiwan and the

Republic of Korea as suppliers of Cases and Handbags, the other main imports

under item 42.02.9, suggests that imports of Wallets which are already

arriving in small quantities from these countries are likely to be diverted

to them if they have preferred access over Hong Kong. The Commission will

therefore suggest that imports of Wallets - as with the other goods falling

within item 42.02.9 - from Hong Kong, Taiwan and the Republic of Korea be

excluded from the Developing Countries preference scheme. The Commission

also suggests that imports from other Developing Countries be kept under

review.

51.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

8. SADDLERY

8.1 THE AUSTRALIAN INDUSTRY

8.1.1 The goods under reference

The term 'Saddlery' In this report denotes a range of products

covered by Item 42.01, and Includes saddles and harness, Including collars,

traces and knee pads of any material. The relevant statistical keys and

commodity codes are set out in Appendix F.

8.1.2 Production

Saddlery produced in Australia increased in value from $1.1 million

in 1966-67 to $3.0 million in 1972-73 (Table 1). In quantity terms, statistics

are available for saddles only. Production amounted to 19,000 units in 1972-73,

which is estimated to be double the 1966-67 level of production (Table 1).

8.1.3 Processes

The processes involved include selecting, cutting, forming, stitch­

ing, assembling and finishing of the leather and other materials.

8.1.4 Size and structure

At the end of 1972-73, 47 establishments in Australia were recorded

as specialising in the manufacture of Saddlery (Table 2). Establishments making

Saddlery in Australia tend to be smaller, on average, than those making other

types of goods under reference. However, as the combined sales of Saddlery of

five firms represented at the Commission's inquiry accounted for about two-thirds

of the value of all Saddlery sold by local manufacturers in 1971-72, it appears

there are a substantial number of very small firms among the 47 establishments

mentioned above.

8.1.5 Employment

The total number employed in making Saddlery during 1972-73 was

about 350 persons (Table 2) , of whom about 90 per cent were directly engaged

in production, according to evidence.

8.1.6 Location

About half the establishments producing Saddlery in Australia are

located outside metropolitan areas. A relatively high proportion are located

in Queensland.

52.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

8.1.7 Materials used

The principal materials used by local producers are leather and

metal fittings. According to confidential cost data submitted, materials

account for over half the total costs of two local producers.

8.1.8 Performance

Only two firms submitted detailed financial data. Because the

information was submitted in confidence the Commission cannot comment on the

profitability of these firms.

8.2 THE AUSTRALIAN MARKET

8.2.1 Imports

The ldp value of imports of Saddlery increased from about $100,000

in 1966-67 to $900,000 in 1972-73. In 1973-74 imports increased in value to

$1.8 million ldp. Data for the nine months ended March 1975 indicate that,

compared to the corresponding period of 1973-74, imports of Saddlery have

nearly doubled in value terms.

The great bulk of imports are apparently saddles of the type which

are in general use in Australia and are described in the Customs Tariff as

being saddlery other than essentially iron or steel chain. Saddlery covered

by item 42.01.1 (essentially iron or steel chain) accounted for about 10 per

cent of all imports of Saddlery under item 42.01 in the nine months ended March

1975. Inports of Saddlery under by-law, such as marking harness and saddle

trees, have accounted for only a small proportion of imports of Saddlery.

The main sources of import competition in 1973-74 were the Fed­

eral Republic of Germany, Britain, Japan and USA (Table 14). During the

period 1969-70 to 1973-74 these four countries accounted for about 80 per cent

of the value of Saddlery imports. Some local producers of Saddlery expressed

concern at the level of import competition from Developing Countries, part­

icularly from India, Argentina, Pakistan and Brazil. Imports from Brazil have

been insignificant. Combined imports from the other three countries during

the period 1969-70 to 1973-74 did not exceed 10 per cent of the total value in

any year. However, in the nine months period to March 1975, India, Argentina

and Pakistan supplied 18 per cent of total imports.

53.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

8.2.2 Demand

The value of apparent demand for Saddlery in 1972-73 was about

$3.7 million (Table 10). The apparent demand has increased strongly in recent

years (Table 11). According to Hill, one of the largest of the local producers

of Saddlery, this is due to an upsurge in show riding and to the growth of pony

clubs.

Imports have gained an increasing share of the total apparent

demand with the result that, notwithstanding the increase in local production,

local manufacturers’ share of the market for Saddlery declined from 90 per cent

in 1966-67 to 76 per cent in 1972-73 (Table 12). The increases in imports in

1973-74 and the first nine months of 1974-75 suggest that demand has continued

to grow strongly and that the import share of the market has probably increased

to above the 1972-73 level.

Exports by local manufacturers more than trebled to $309,000

between 1966-67 and 1973-74 (Table 15). A significant share of the Saddlery

exported went to Britain and USA - countries from which a large proportion

of Australia's imports originate. Hill stated that local producers have been

able to compete in overseas markets because they have specialised in certain

lines, particularly race and exercise saddles, and these are not major items of

production in those markets.

8.3 COMPETITIVE POSITION

8.3.1 Costs and cost disabilities

The main factors influencing the costs of Saddlery are the materials

and labour used, the type of construction and the finish of particular lines.

The cost of labour was claimed to be a major disability for local manufacturers

competing with producers in some South American and Asian countries.

8.3.2 Price disadvantages

Comparisons of current domestic and overseas prices are difficult

because of variations in the types of Saddlery supplied to the market and in

the quality of Saddlery from different countries. The small number of compari­

sons that the Commission was able to make indicate that local manufacturers

face price disadvantages, in some instances, in excess of 100 per cent.

54.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

However, in view of the local manufacturers' share of the Australian market and

their export performance, the Commission is of the opinion that the price compari­

sons submitted were not representative of the main types of Saddlery marketed

and/or that competition is based on quality, styling and brand image rather

than on price.

8.4 CASE FOR ASSISTANCE

8.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Saddlery are

19 and 30 per cent General and 13 per cent Preferential (Appendix B). A high

proportion of imports of Saddlery are dutiable at 30 per cent General or 13

per cent Preferential under item 42.01.9. It is estimated that the average

effective rate of protection afforded such goods by the 30 per cent General

tariff rate is about 35 per cent; and that the subsidy equivalents of the

General rate would be about $510,000 gross and $370,000 net.

8.4.2 Assistance requested

The tariff rates requested by local manufacturers ranged up to

40 per cent General and 30 per cent Preferential (Appendix E). It is estimated

that the average effective rate which would be afforded Saddlery by a tariff

rate of 40 per cent would be about 50 per cent and the subsidy equivalents would

be about $680,000 gross and $540,000 net.

8.4.3 Reasons supporting requests

The main reasons advanced by local Saddlery manufacturers in

support of their requests were the cost and price disadvantages of the local

product compared with similar imported products.

8.5 ASSISTANCE TO BE RECOMMENDED

As indicated in section 3, the Commission will recommend that the

production of Saddlery be assisted by a rate of duty of 25 per cent and that

this rate be implemented immediately.

The Commission has considered whether any additional short term

assistance for producers of Saddlery might be warranted in view of the recent

increases in the level of imports. In recent years there has been a strong

55.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

increase in Australian demand for Saddlery due chiefly to increased popularity

of show riding and the growth of pony clubs. Although imports have increased

markedly in recent years, the evidence indicates that Australian producers are

sharing in the increased demand. There has also been a significant increase

in exports by local producers. In these circumstances, the Commission considers

that additional short term assistance is not warranted and that there are no

grounds for deferring implementation of the recommended industry level of

assistance.

The Commission also considers that there is no reason to delay the

adjustment of the Preferential rate from 13 to 25 per cent. The elimination

of the Preferential margin will assist local producers of Saddlery to meet

import competition from Britain, a major source of imports in 1973-74.

New Zealand has not been a major source of imports of Saddlery

and the immediate application of minimum rates for these goods from New Zealand

is suggested.

Attention is drawn to the remarks in section 8.2.1 concerning the

increasing significance of imports of Saddlery from some Developing Countries,

especially India, Argentina and Pakistan. The Commission considers that in a

rapidly growing market the relatively small share of total imports originating

in these countries does not justify their exclusion from the Developing Countries

preference scheme but suggests imports from such countries be kept under review.

56.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

9. SPORTS BAGS, OTHER LEATHER PRODUCTS AND MACHINE BELTING

9.1 THE AUSTRALIAN INDUSTRY

9.1.1 The goods under reference

The terms 'Sports Bags', 'Other leather Products' and 'Machine

Belting' are used in this report to denote a wide range of goods for which

the commodity codes, tariff items and statistical keys are set out in

Appendix F.

The term 'Sports Bags' covers a variety of bags, included in item

42.02.9, which are used for sporting purposes, such as golf, bowls, cricket,

fishing and hunting.

The term 'Other Leather Products' denotes a variety of goods,

included in items 42.02, 42.03.4, 42.04.2, 42.04.9, 42.05 and 43.04.9, which

are made of leather, leather substitute or other materials, including watch-

straps, writing compendiums, card cases, smoking requisites, pen and pencil

cases, spectacle cases, leather gaskets, artificial fur and other miscellaneous

accessories and gift lines.

The term 'Machine Belting* covers belts and belting, included

in item 42.04.1, made of leather or composition leather of a kind used in

machinery and mechanical appliances or for industrial purposes.

9.1.2 Production

Separate production statistics are available in quantity terms

only for golf bags and, since 1969-70, for watchstraps.

The production of Sports Bags increased in value from about

$880,000 in 1966-67 to $1.2 million in 1972-73 (Table 1). Golf bags account­

ed for about 85 per cent of these values and, in quantity terms, production

of golf bags increased from 75,000 units in 1966-67, to 81,000 in 1972-73.

Production of Other Leather Products in 1972-73 was valued at about $5.1

million compared to an estimated $3.6 million in 1968-69. The Commission

estimated that the production of Machine Belting fell in value from about

$285,000 in 1966-67 to about $200,000 in 1972-73.

57.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

9.1.3 Processes

The processes used are fairly simple, and consist essentially of

cutting sheets of leather, vinyl or other leather substitutes into various

shapes, and then stitching or gluing together the pieces comprising each

article.

9.1.4 Size and structure

At the end of 1972-73, there were four establishments in Australia

which specialised in making Sports Bags, and the average output of these est­

ablishments in that year was about $156,000 (Table 2). Only one local producer

of Sports Bags - Denzil Don - took part in the Commission's inquiry. This firm

claimed that it was the largest producer of golf bags in Australia. Denzil Don

is not included among the four establishments mentioned above, as it does not

specialise in the manufacture of Sports Bags.

At the end of 1972-73, there were 116 establishments specialising

in the production of Other Leather Products and Machine Belting. Separate data

for each product group are not available (Table 2). These establishments were

smaller on average than most others producing Leather Products. They employed

on average 8 persons and had an average value of output of $74,000. At the

end of 1972-73, 23 of these 116 establishments were engaged in repair and/or

commission work only. They were relatively small, employing on average 4 per­

sons.

No local producers of Machine Belting took part in the Commission's

inquiry. Local producers of Other Leather Products were represented at the

inquiry by four firms which specialised in the production of such goods, and by

a further ten firms which produced Other Leather Products in conjunction with

other goods such as Wallets, Leather Belts and Cases. Their combined sales of

Other Leather Products accounted for about 12 per cent of the value of all

locally made Other Leather Products sold in 1971-72.

9.1.5 Employment

The four establishments which specialised in Sports Bag manufact­

ure employed about 70 persons in 1972—73. A substantial proportion of the 180

58.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

employees of Denzil Don were also making Sports Bags. Other Leather Products

and Machine Belting manufacturers employed a further 900 persons in that year

(Table 2). About two-thirds of the total number employed were females.

9.1.6 Location

Most of those producers which participated in the inquiry were

located in the Melbourne or Sydney metropolitan areas. There was no evidence

that any major firms were located in non-metropolitan areas.

9.1.7 Materials used

About 85 per cent of the locally made Sports Bags are golf bags,

and most of these are made of plastics rather than leather. Leather is the

major material used in the production of Other Leather Products and Machine

Belting. Materials used in Other Leather Products would account for about 40

per cent of total costs, according to the limited data supplied by a few manu­

facturers. Data submitted by Denzil Don are confidential, and no data on

materials costs were submitted by local producers of Machine Belting.

9.1.8 Performance

As the information submitted by Denzil Don about the profitability

of its operations is confidential, the Commission is restricted in the comments

it can make about the profitability of Sports Bags manufacture. Based on the

rates of return obtained by a number of local manufacturers on individual pro­

duct lines, the production of Other Leather Products seems to have been at least

reasonably profitable for most firms taking part in the Commission's inquiry.

9.2 THE AUSTRALIAN MARKET

9.2.1 Imports

Details of imports of Sports Bags have not been separately record­

ed in official statistics since 1968-69. In that year they were valued at

about $150,000 ldp.

Imports of Other Leather Products - mainly from Hong Kong, Britain

and Italy (Table 14) - increased from $975,000 ldp in 1968-69 to about $1.4

million in 1972-73. A high proportion of these imports consisted of spectacle

59.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

cases, watchstraps and pen and pencil cases (Table 13). In 1973-74 Imports of

Other Leather Products Increased by a further 29 per cent In value terms to

$1.8 million ldp. Data for the nine months ended March 1975 indicate that,

compared to the corresponding period of 1973-74, imports of Other Leather Pro­

ducts increased 31 per cent in value terms. However, for the three items for

which quantities are recorded, imports increased by less than one per cent in

quantity terms in this period.

The main sources of imports of Other Leather Products in 1973-74

were Hong Kong, Britain, Italy and USA (Table 14).

Imports of Machine Belting have declined since 1966-67, from

$90,000 ldp in that year to about $64,000 in 1973-74. Data for the nine months

ended March 1975 indicate that, compared to the corresponding period of 1973­

74, imports of Machine Belting declined 10 per cent in quantity terms. The

main sources of imports of Machine Belting in 1973-74 were Britain, USA and

Italy (Table 14).

9.2.2 Demand

On the basis of the limited information available, it is estimated

that the value of demand for Sports Bags in 1972-73 was about $1.5 million.

Various types of bags make up the market for Sports Bags in

Australia. Golf bags appear to account for about three-quarters of the total,

and virtually all of this particular market appears to be supplied by local

producers. An examination of entries for recent shipments of Sports Bags

revealed that imports were mainly of bowls bags, fishing bags, game bags and

the like.

The value of apparent demand for Other Leather Products in 1972-73

was about $6.4 million, compared with about $4.6 million in 1968-69, according

to estimates made by the Commission (Table 11). The share of the market

supplied by local manufacturers was about 21 per cent in both 1968-69 and 1972­

73 (Table 12). It may have increased slightly in 1973-74 but the quantity/

60.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

value relationships recorded in that year and in the early part of 1974-75

suggest that any increase would have been marginal. Exports of a wide range

of Other Leather Products have increased steadily since 1968-69 from $66,000

in that year to an estimated $180,000 in 1973-74.

Data published in the Tariff Board's report: 'Belts, Belting, and

Woven Cotton Fabrics over 15 Ounces per Square Yard' (25 June 1969) suggested

that about one-third of all the Machine Belting sold in Australia in 1967-68

was made of leather (see Table 4 in that report), but that the market for

leather belting was declining as a consequence of substitution by other types

of belts and belting. Even if this ratio still applied, then the value of the

apparent demand for leather Machine Belting in Australia would have been less

than $200,000 in 1972-73 (Table 10), compared with about $360,000 in 1966-67

(Table 11), and the share of the market supplied by local manufacturers would

have declined in this period from 75 per cent to about 70 per cent. Exports

have fluctuated widely from a low of $9,000 in 1967-68, to a high of about

$80,000 in 1973-74.

9.3 COMPETITIVE POSITION

9.3.1 Costs and cost disabilities

Costings submitted by Denzil Don, the only manufacturer of Sports

Bags to attend the inquiry, are confidential.

Unit costings for a number of Other Leather Products show wide

variations in the cost of a particular line among manufacturers. Such varia­

tions in unit costs are apparently due to differences in the types of leather or

other materials used, the degree of processing undertaken and the expenditure

on selling and distribution.

Insufficicient information was submitted by local producers to

make an overall assessment of their cost disabilities.

9.3.2 Price disadvantages

Insufficient data are available to make meaningful comparisons

of the import and local prices of the wide range of goods included in this

61.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

section. However, it would appear from the low level of imports either that

the local manufacturers have not had large price disadvantages or that any

such disadvantages are largely offset by local advantages.

9.4 CASE FOR ASSISTANCE

9.4.1 Assistance available

The rates of duty provided in the Customs Tariff for Sports Bags

are 34 per cent General and 13 per cent Preferential (Appendix B). The gross

subsidy equivalent of the General rate is about $200,000. The Commission did

not have sufficient information to make a meaningful estimate of the effective

rate of protection afforded all Sports Bags by the present tariffs although the

data available indicate that it would be similar to the rate applying to Cases;

namely about 40 per cent.

The rates of duty provided in the Customs Tariff for Other Leather

Products range from 12 to 46 per cent General (including primage), from 4 to

24 per cent Preferential (including primage) and from free to 14 per cent for

goods of New Zealand origin (Appendix B). Because insufficient data are avail­

able and because of the diverse range of goods the Commission was unable to

calculate average effective rates of protection or subsidy equivalents for the

protection presently applying to the production of Other Leather Products.

The rates of duty provided in the Customs Tariff for Machine Belt­

ing are 26 per cent General and 19 per cent Preferential (Appendix B). Accord­

ing to estimates made by the Commission, the annual gross subsidy equivalent of

the General tariff rate is about $40,000. This estimate assumes that the value

of output of locally made belting is currently about $200,000.

9.4.2 Assistance requested

Denzil Don requested for Sports Bags the retention of tariff

barriers at or near the levels applying when the inquiry began - that is, 45

per cent General and 17% per cent Preferential (Appendix E). The company

stated, however, that its request applied particularly to airway and shopping

bags. Such goods are covered in the section of this report dealing with Cases.

62.

l e a t h e r a n d l e a t h e r s u b s t i t u t e p r o d u c t s

The Commission has estimated that the gross subsidy equivalent of

a tariff rate of 45 per cent for Sports Bags would be nearly $300,000 and the

effective rate would probably be in excess of 50 per cent.

In general, the local manufacturers of Other Leather Products

requested maintenance of the rates of duty which were operative when the

Commission's inquiry began - that is, principally 45 per cent General and 17%

per cent Preferential. However, there were some variations to this. Handley,

for example, requested for leather watchstraps a tariff rate (General and Pref­

erential) of 45 per cent or 25 cents per watchstrap, whichever was the higher

(Appendix E).

Stephens Belting, a manufacturer of leather belting in Britain,

requested that the rate of duty on Machine Belting should not exceed 25 per

cent (Appendix E) .

9.4.3 Reasons supporting requests

The main reasons advanced by local manufacturers in support of

their requests were essentially the same as those advanced by other producers

of other goods under reference - that is, to offset their cost disabilities

and price disadvantages.

9.5 ASSISTANCE TO BE RECOMMENDED

As mentioned previously, the Commission will recommend a long

term rate of 25 per cent for virtually all goods under reference, including

Sports Bags, Other Leather Products and Machine Belting.

The Commission has considered whether any grounds exist for pro­

posing assistance for producers of these goods in addition to the long term

assistance which it has recommended. It has concluded that short term measures

are not warranted and will recommend the immediate implementation of the rate

of 25 per cent for all goods covered in this section except those falHns within

items 42.02.9 and 43.04.9.

The Commission has recommended that implementation of the long

term rate for all other goods under reference falling within item 42.02.9

be delayed for one year. In view of their similarity to goods covered in

63.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

section 4 and to simplify tariff administration during that period it will

also recommend one year's delay in implementing the long term rate for those

Sports Bags and Other Leather Products falling within that item. For the same

reasons, the Commission suggests that imports of these goods from Hong Kong,

Taiwan and the Republic of Korea be excluded from the Developing Countries pre­

ference scheme.

The Commission received no evidence from either local manufacturers

or importing interests on goods falling within item 43.04.9. It will recommend

that the existing General rate of duty applying to such goods remain unchanged

and that the Preferential rate be increased to 12 per cent on implementation of

this report. Item 43.04.1 is covered by the Commission's reference on clothing;

imports under that item, like those under 43.04.9, have been small in recent

years. In its report on clothing the Commission may wish to consider the need

for the present division of item 43.04.

The Commission will also recommend that adjustment where required of

the Preferential rate to the recommended long term rate of 25 per cent should be

made on implementation of this report.

New Zealand has not been a major source of imports of the goods

covered by this section and the immediate application of minimum rates for these

goods from New Zealand is suggested.

64

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

10. RECOMMENDATIONS

The Commission recommends that the goods under reference be

made dutiable as follows:

1. Goods falling within sub-item 43.04.9 ....... 12 per cent

2. Goods falling within sub-items 42.02.9 and 42.03.9:

. on implementation ....... 34 per cent

. after 1 year ........ 25 per cent

3. Other goods under reference ....... 25 per cent

These recommendations are made on the assumption that primage

duties will not apply.

Attention is invited to the suggestions in the report regarding:

. the Preferential rates of duty which should apply to goods covered by recommendation 2 above;

. goods of New Zealand origin; and

. goods from Developing Countries.

G.F. JOHNSON . . . . .................. Commissioner

K. COLLINGS ........................... Associate Commissioner

CANBERRA, AUSTRALIAN CAPITAL TERRITORY

10

JUNE 1975.

65.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

APPENDIX A

THE REFERENCE

Terms

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

I, JOHN DOUGLAS ANTHONY, Minister of State for Trade and

Industry, hereby refer the following questions to the Tariff Board for

inquiry and report in accordance with Section 15 of the Tariff Board

Act 1921-1972

(a) whether assistance should be accorded the production in Australia of saddlery and harness, travel goods, handbags and the like and other goods falling within items 42.01, 42.02, sub-items 42.03.4, 42.03.9 (belts only), items 42.04 and 42.05 and sub-item 43.04.9 in the First Schedule to the Customs Tariff 1966-1972

and, if so, the nature and extent of such assistance; and

(b) if the Board's findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect to the goods concerned.

J.D. ANTHONY

Minister of State for Trade and Industry 6 November 1972

Background

. The reference is one of ten which were sent to the Tariff Board

in November 1972 by the Minister for Trade and Industry, to initiate

the Tariff Review. The general background to this Review, and the

criteria used to define the industries which were included in it,

are described in a booklet titled The Tariff Review which was

published bv the Tariff Board in September 1972.

. The Leather Tanning industry was also referred to the Tariff Board

by the Minister for Trade and Industry on 6 November 1972 and was the

subiect of a recent report.

LE A T H E R A N D LEATHER SUBSTITUTE PRODUCTS

ire

APPENDIX B

TARIFF PROVISIONS ----------

Oo<.:4u xv-dcx r e f e r s e a t h e vra-urr/·; o r n a n t h t i c r a r e o f Kaa l a n d :u -t ,

a o f d u t y c a c c r , t v h c r e d e d i c a t e d i n t h e rΐΓΑ? 1.,.an ;

CUSTOMS TAR I F F

Ivan Goods

42.01 SADDLERY AND HARNESS, INCLUDING COLLARS TRACES, KNEE PADS AND BOOTS, OF ANY MATERIAL, FOR ANY KIND OF ANIMAL:

Rates of Duty

Cor oral. Γί! fevcntrei

42.01.1 Essentially iron or steel chain 19% 13%

42.01.9 - Other

DC: Free

30% 13%

DC: Free

42.02 TRAVEL GOODS, SHOPPING-BAGS, HAND­ BAGS, SATCHELS, BRIEF-CASES, WALLETS, PURSES, TOILET-CASES, TOOL-CASES, TOBACCO-POUCHES, SHEATHS, CASES, BOXES AND SIMILAR

CONTAINERS, OF LEATHER OR OF COMPOSITION LEATHER, OF VULCANISED FIBRE, OF ARTIFICIAL PLASTIC SHEETING, OF PAPERBOARD OR OF TEXTILE FABRIC:

42.02.1 Card cases; smoking requisites; snuff boxes 26% DC: 16%

15%

42.02.2 - Pen and pencil cases for school use; spectacle cases; gun, revolver and pistol cases and covers

22.5%

DC: 12.5%

7.5%

42.02.9 Other

Developing Countries Goods of leather

Other

34% 13%

DC: 15%

DC: 24%

LEATHER AND LEATHER SUBSTITUTE PRODUCTS, /lppENDIX B

ciua-oKs t- oven

Item Good; ?

Rat St

General

of Paty

Preferential

42.03 ARTICLES OF APPAREL AND CLOTHING ACCESSORIES. OF LEATHER OR OF COMPOSITION LEATHER:

42.03.1

42.03.2

- Gloves, mittens or mitts of the work type or as worn by golfers

- Gloves, mittens or mitts, NSA

) ) ) Not Under Reference ) 1

42.03.3 - Coats; jackets; overcoats )

42.03.4 - Wrist straps 30% 13%

DC: 20%

42.03.9 - Other 39%

17%

Primage 3% DC: (except Hong Kong) 20%

Primage 3%

42.04 GOODS MADE OF LEATHER OR OF COM­

POSITION LEATHER OF A KIND USED IN MACHINERY OR MECHANICAL APPLIANCES OR FOR INDUSTRIAL PURPOSES:

42.04.1 - Belts and belting 26% 19%

DC: 16%

42.04.2 - Gaskets and similar joints 39% 21%

Primage 7% Primage 3%

DC: 29%

Primage 7%

LEATHER AND LEATHER SUBSTITUTE PRODUCTS Page 3 of APPENDIX B

CUSTOMS TARIFF

Item

42.04.9 - Other

Good s

42.05 OTHER GOODS MADE OF LEATHER OR OF

COMPOSITION LEATHER

43.04 ARTIFICIAL FUR AND GOODS MADE

THEREOF:

43.04.1 - Apparel or attire or other goods partly or wholly made up

Ra ten of Duty

General Preferential

30% 13%

DC: Free 30% 13%

DC: Free

Not Under Reference

43.04.9 - Other

LEATHER AND LEATHER SUBSTITUTE P^ODUC^S f ^pgjgpj-χ B

TARIFF PROVISIONS

CONSOLIDATED BY-LAW REFERENCES

Tariff Reference Description of Goods

By-law Provision

42.01 Marking harness, incorporating a dye container, of a kind used for fitting to bulls 19

42.01

Saddle trees: Saddle trees incorporating a roping horn 19

42.01 Saddle trees, injection moulded, plastic, incorporating a roping horn 19

42.02 Bags or cases, archery 19

42.02 Pouches, having provision for the protective housing of a pair of contact lens 19

42.02 Sporrans 19

42.03 Apparel, archery, as follows: arm guards finger tabs gloves protectors, archery shirt and blouse

19

42.03 Pads, protective shoulder or elbow, ice hockey 19

42.04 Buffers, picking stick, comprising core of rubber tissue with hollow centre and removable leather band on outer edge which is cemented for picker stick contact, of a kind used as shock absorbers on weaving looms

19

42.04

Diaphragms: Diaphragms, of a kind used solely or principally with gas meters of the consumer type having a capacity exceeding 300 cu ft/hr

19

42.04 Diaphragms, of Persian sheepskin leather, of a kind used solely or principally with domestic consumer type gas meters

19

42.04 Pins, rawhide, of a kind used in the manufacture of machine belt fasteners 19

42.04 Rollers, inking, consisting of a wooden core covered with felt and having an outer covering of nap or smooth leather

19

42.05 Buckles, leather covered, for use in the manu­ facture of apparel, under security 19

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 5 of APPENDIX B

TARIFF PROVISIONS

CONSOLIDATED BY-LAW REFERENCES

Tariff Reference Description of Goods

By-law Provision

42.05 Thongs In the piece, of a kind used in the manu­ facture of loose leaf binders 19

43.04 Artificial fur, for use, otherwise than as toe puffs, in the manufacture of boots, shoes and slippers, under security

43.04 Lining, shuttle brake synthetic fibre

NOTE: By-law item 19 provides for entry at rates of Free General and Free Preferential.

19

19

I

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TARIFF PROVISIONS

Page 6 of APPENDIX B

HANDICRAFTS

Item 36 of Schedule 2 to the Customs Tariff makes provision for the admission free of duty under by-law of handicrafts in certain circumstances.

2. In the main, the concession applies to -

Handicrafts being goods that the Collector is satisfied

(i) are "hand-made", that is to say goods that have been made by one or more of the following processes: (a) by hand; (b) by tools held in the hand;

(c) by machines powered by foot or hand;

(ii) are wholly or in chief part by weight of materials traditionally used in the production of handicrafts; and

(iii) have attained, by reason of being "hand-made", an artistic: or decorative character generally comparable with traditional "hand-made" products of the country in which the goods were made.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS Page 7 of APPENDIX B

TARIFF PROVISIONS

NEW ZEALAND RATE SCHEDULE

Item Goods N.Z. Rate

42.01.1 All goods 4%

42.01.9 All goods 7.5%

42.02.1 All goods 11%

42.02.2 Spectacle cases Free

Remainder 2.5%

42.02.9 All goods 6%

42.03.4 All goods 7.5%

42.03.9 Skirts of deerskin Not Under

leather Reference

Cartridge belts Free

Remainder 9%

42.04.1 All goods 4% '

42.04.2 All goods 14%

42.04.9 Buffalo pickers for textile Free

machinery

Remainder 7.5%

42.05 All goods 7.5%

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

APPENDIX C

TARIFF BOARD REPORTS AND OTHER REFERENCES

TARIFF BOARD REPORTS

Title Date

Pipes, Smoking, n.e.i. Smokers' Requisites, Etc. Tariff Item 413

Leather Covered Tobacco Pouches

Packings (But not including Asbestos Packings)

Leather Manufactures n.e.i.; Leather Cut Into Shape, Etc. Harness and Buggy Saddles

Apparel n.e.i. - Tariff Item 110(D)

Travel Goods, Handbags, Wallets, Purses and Various Other Containers

Report on Woollen Piece Goods and Interim Report under the General Textile Reference on Woollen Piece Goods

Iron and Steel Chain

Musical Instrument Cases

Belts, Belting, and Woven Cotton Fabrics over 15 ounces per square yard

OTHER REFERENCES

21 October 1930

29 October 1930

8 February 1933

7 February 1935

23 March 1933

21 September 1960

21 June 1962

4 April 1963

28 June 1967

25 June 1969

Australian Bureau of Statistics. Australian National Accounts, Input-Output Tables

— economic Censuses : Hanufaotian-na establishments,

Selected items of Da.ta Classified by TndustrnJ and employment Size : Australia.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

— Economic Censuses : Manufacturing Establishments and Electricity

and Gas Establishments, Summary of Operations by Industry Class : Australia.

— Imports Cleared for Rome Consumption : Australia.

— Indexes of Factory Production : Australia.

— Labour Report.

— Manufacturing Commodities, Principal Articles Produced.

— Manufacturing Establishments, Details of Operations by Industry

Class : Australia.

— Manufacturing Establishments, Summary of Operations by Industry

Class : Australia.

— Manufacturing Industry,

— Overseas Trade : Australia.

— Population Census, June 1971, Reference Ho. 1.9.

Tariff Board. Annual Reports.

- - Review Inquiry No. 2 Statistical Handbook:

Leather and leather substitute products, 1972.

United Nations. The Growth of World Industry, 1970 Edition, Volume I, General Industrial Statistics, 1960-69.

Page 2 of APPENDIX C

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

LIST OP WITNESSES AN D ABBREVIATIONS

APPENDIX D

The organisations and companies which gave evidence are listed below t ogether with their representatives.

Abbreviations used are also shown.

NAME AND CAPACITY OF WITNESS

Ronald Samuel S te v e n s ,

s e n io r i n s p e c t o r , a p o ra ise m e n ts

Wolfgang S o r a u e r ,

j o i n t nanaging d i r e c t o r

Walter William F e o re ,

a cco u n ta n t

L e s l i e Emery Wadds,

managing d i r e c t o r

Johannes Arnold Van Bergen,

g e n er al manager

C l i f f o r d George Mackey, ' }

c onsu1 t a r t , t a r i f f and )

tr a d e d e c a r t a e n t )

h a ro ld Graham H e rfo rd , )

chairman, luggage panel )

COMPANY OR ORGANISATION

Department of Customs and Excise

Amalco Pty Ltd

H. Arendsen & Sons Pty Ltd

A r i s t o c r a t Leathergoods Pty Ltd

Artex Leathergoods Pty Ltd

The A ss o c ia te d Chambers of Manufactures of A u s t r a l i a on

b e h a l f of -

A.G. Blackwell

C o n so lid ate d P l a s t i c In d u s tr ie s

Pty l t d ( s u b s i d i a r y of Nedor

Holdings Pty li m i t e d )

Dodge Luggage I n d u s tr ie s

E v e r l i t e Travel Goods Pty Ltd

ADDRESS

Customs House, Melbourne, V i c t o r i a

45 McLachlan Avenue, R u s h c u tte rs

Bay, New South Wales

1303-15 Malvern Road, Malvern, V i c t o r i a

22 C ity Road, C hip p en d ale,

New South Wales

1829 F e r n t r e e Gully Road, Fern t r e e G ully, V i c t o r i a

In d u s try House, B arto n ,

A u s t r a l i a n C a p i ta l T e r r i t o r y

126-130 Rose S t r e e t , F i t z r o y ,

V i c t o r i a

181 Lawson S t r e e t , R ed fern , New South Wales

24 R is l e y S t r e e t , Richmond,

V i c t o r i a

141 Johnsto n S t r e e t , F i t z r o y ,

V i c t o r i a

ABBREVIATION USED

Amalco

Arendsen

A r i s t o c r a t

Artex

ACMA

Blackwell

C o n so lid a te d P l a s t i c

Dodge

E v e r l i t e

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 2 of APPENDIX D

ABBREVIATION USED

Ford Sherin gton Ltd 119 Vanessa S t r e e t , Kingsgrove,

flew South Wales

Herfords Pty Ltd 72 P a rr a m a tta Road, Summer H i l l ,

New South Wales

Nanco I n d u s t r i e s (V ic .) 468-502 P rin ce s Highway,

H a r r i s f i e l d , V ic to r ia

P a k l i t e Pty Ltd 82 B e l l i n g a r a Road, Miranda,

New South Wales

Stamford I n d u s t r i e s 18 Smith S t r e e t , Chatswoad,

New South Wales

Voyager Travel Goods Company 14 Maud S t r e e t , B risb an e ,

Queensland

W„T. Weeks Manufacturing Moxon Road, Punchbowl,

New South Wales

•ennis HaroU Morgan, c ? r i f f consu 11 jn t

The -A u stra lia n B r i t i s h Trade A sso c ia tio n on b e h a l f of -

138 F li n d e r s S t r e e t , Melbourne,

V i c to r ia

Stephens B e l tin g Company Limited Warwickshire, England

^ re n t navi land [v a n s ,

" -'crptary

A u stra lia n T a r i f f C ouncil, and

on b e h a l f of -

161 Cla rence S t r e e t , Sydney,

New South Wales

Paramount Imports Pty Ltd 822 E liz a b e th S t r e e t , Waterloo,

New South Wales

•>thur Janes Latham, rp c to r

R.M. Brent & Son Pty Ltd 45 F re d d y 's Road, Bexley,

New South Wales

^q: e r t Walter M cA lliste r,

-.. naqer

A. Buckle & Son Pty Ltd 71 Smith S t r e e t , Summer H i l l ,

New South Wales

r-'e d eric k Turnovsky,

•i.d ;ag! ng Ji r e c t o r

Buxton Leather Goods (N.Z.) Ltd 96 Tory S t r e e t , W ellin g to n ,

New Zealand

Ford S h erington

Herfords

Namco

P a k l i t e

Stan fo rd

Voyager

Weeks

A3TA

Stephens B e l t i n g

ATC

Paramount

Brent

Buckle

Buxton

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 4 of APPENDIX D

NAME AND CAPACITY OF WITNESS

Kevin James Bremen, )

t a r i f f , t r a d e , customs and ■ }

p u u Iic r e l a t i o n s c o n s u l t a n t , ]

and ex ec u tiv e d i r e c t o r , FTAA j

John James Madigan, j

■ p re sid e n t ^

E ric Graham F r a n c i s , )

chairman, t a r i f f sub-committee)

James S ta f f o r d Osborne,

■ managing d i r e c t o r

Glen Jack Mann,

accounta nt

George Reich,

managing d i r e c t o r

John Kenneth Adamson, s o le s d i r e c t o r

Harold Graham H erford,

managing d i r e c t o r

Arthur Leonard H i l l , d i r e c t o r )

Mary E lo ren ce Hi 11, s e c r e t a r y )

Alan L e slie S i n c l a i r ,

accounta nt

John K e llie ,

ge neral manager

Richard Anthony P o llo c k ,

p a r tn e r

COMPANY OR ORGANISATION

Kevin J, Cremen & A s s o c ia te s Pty Ltd on b e h a l f of -

F e d e ra te d Tanners' A sso ciatio n

o f A u s t r a l i a

F l i g h t Travelbags Ltd

Ford S herington Ltd

French Sheldon Fashion Group

J„W„ Handley Pty Ltd ,

and on b e h a l f of -

H .t J. Palmer Pty Ltd

Herfords Pty Ltd

Syd„ H ill J Sons Pty Ltd

R.A. Hughes Pty Ltd

Lec ra ft

Line Contemporary

ADDRESS

1

)

)

j 21-23 London C i r c u i t , C anberra C i t y ,

i A u s t ra lia n C ap ital T e r r i t o r y

K ingsford-S mith S t r e e t , W ellin g to n ,

New Zealand

119 Vanessa S t r e e t , Kings grove,

lieu South Wales

165 Cle vela nd S t r e e t , C hippendale ,

New South Wales

655-7 V i c t o r i a S t r e e t , A bbots ford, V i c t o r i a

88 Hoddle S t r e e t , A bbots ford,

V i c t o r i a

72 P a rr a m a tta Road, Summer H i l l ,

New South Wales

Fis on Avenue, Eagle Farm, Queensland .

Anzac Avenue, P e t r i e , Queensland

105-7 Brunswick S t r e e t , F i t i r o y , V i c t o r i a

390 Brunswick S t r e e t , F i t z r o y , V i c t o r i a

ABBREVIATION USED

FTAA

F l i g h t

Ford Sherin gton

French Sheldon

Handley

Palmer

Herfords

H ill

Hughes

L e c ra ft

Line

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 5 of APPENDIX D

ABBREVIAT ION USED

Kevin William M cAllison,

p ro d u c tio n manager

James C l i f t o n Redward,

t a r i f f and tr a d e o f f i c e r

Hugh B la k er,

supp I y manager

Hyam Roden, managing d i r e c t o r ) Robert Harry Roden, )

p ro d u c tio n manager )

Donald MacBeth R o b ertso n ,

managing d i r e c t o r

E rn es t L u m e r , managing d i r e c t o r )

J e f f r e y John B r i t t a i n , )

company s e c r e t a r y )

William Henry Kemp,

t a r i f f and by-law o f f i c e r

F e lix Vogeln est,

managing d i r e c t o r

Alexander U e 's z ,

managing d i r e c t o r

E rn est Fred Morton,

managing d i r e c t o r

Madison B e l t s Pty Ltd

New Z eala nd M a n u f a c tu re rs ’ F e d e ra tio n (In c)

Namco I n d u s t r i e s ( V ic .)

Nedor Holdings Pty Limited

Nevada Pro d u cts Pty Ltd

Novel trim M anufacturing Co. Pty Ltd

Nylex C o rp o ra tio n Limited

P a k l i t e Pty Ltd

Parag o ld D i s t r i b u t o r s Pty Ltd

P e e r l e s s Leathergoods Pty Ltd

39-47 Market S t r e e t , South Melbourne,

V i c t o r i a

38-44 Courtenay P la c e , W ellin g to n ,

New Zealand

468-502 P r in c e s Highway,

H a r r i s f i e l d , V i c t o r i a

181 Lawson S t r e e t , R ed fern ,

New South Wales

2 C a th e r in e S t r e e t , L e ic h h a r d t,

New South Wales

64 Kippax S t r e e t , Surry H i l l s ,

New South Wales

165 Cremorne S t r e e t , Richmond, V i c t o r i a

82 B e l l i n g a r a Road, Miranda, New South Wales

52 P i t t S t r e e t , R ed fern ,

New South Wales

216 C leveland S t r e e t , C hip p en d ale, New South Wales

Madison

NZMF

Nam co

Nedor

Nevada

Noveltrim

Nylex

P a k l i t e

Paragold

P e e rle s s

LEATHER ALTO LEATHER SUBSTITUTE PRODUCTS

Page 6 of APPETOIX P

ABBREVIATION USED

John Paul Male, g e n eral manager )

(W.T. Weeks Manufacturing) )

Lesley Ernest Barlow, manager )

Neil David L i t t l e ,

company s e c r e t a r y

Paul Allan Robinson,

a s s i s t a n t manager

Henry James S t r e l e i n ,

manager

Max Ir n d o rfe r,

p roduction manager

C l i f f o r d John Dunkley,

t a r i f f c o n s u lt a n t

P e r f e c tio n Leather Goods

Lyall Robertson Pty Ltd

F„ Robinson Leathergoods Pty Ltd

J . P . F a t t y , and on b e h a l f of -

Boans Limited

Tosca Leather Goods

W allin, Dunkley & A sso ciates P ty , Limited on b e h a l f of -

A, Buckle 5 Son Pty Ltd

Domo Pty Ltd

R.A, Hughes Pty Ltd

Line Contemporary

11 Moxon Road, Punchbowl,

New South Wales

228 Bay Road, Sandringham,

V i c t o r i a

ί9 7 : Elizabeth S t r e e t , Z e tla n d ,

New South Wales

6 Cunningham S t r e e t , Sydney,

New South Wales

Wellington S t r e e t , P e rth ,

Western A u s t r a l i a

k Corr S t r e e t , Moorabbin, V i c t o r i a

28 Market S t r e e t , Sydney,

New South Wales

71 Smith S t r e e t , Summer H i l l ,

New South Wales

96 Morang Road, Hawthorn, V i c t o r i a

Anzac Avenue, P e t r i e , Queensland

390 Brunswick S t r e e t , F i t z r o y , V i c t o r i a

P e r f e c t i o n

Lyall Robertson

Robinson

Talty

Boans

Tosca

Wallin Dunkley

Buckle

Domo

Hughes

Line

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Papre 7 of APPENDIX D

ABBREVIATION USED

John Paul Male,

g e n e r a l manager

Robin Yates, p r o p r i e t o r and manager

Graham L e s lie Conyard, f a c t o r y manager

Nevada Pro d u cts Pty Ltd

F. Robinson Leathergoods Pty Ltd

A rth ur Solomons Pty Ltd

Harold Vic kery 5 Son Pty Ltd

W.T. Weeks Manufacturing

Robin Yates Western Saddlery

Z ilco Groups and on b e h a l f of -

Maxwell Machinery Pty Ltd

2 C a th e r in e S t r e e t , L e ic h h a rd t,

New South Wales

797 E l iz a b e th S t r e e t , Z e tla n d ,

New South Wales

31-37 Dixon S t r e e t , Sydney,

New South Wales

61 Old Lake Road, P o r t Macquarie,

New South Wales

11 Moxon Road, Punchbowl,

New South Wales

20 F o n ta in b le a u S t r e e t , Sans S o u c i,

New South Wales

74A S a lis b u r y Road, Stanmore, New South Wales

533 W ellington S t r e e t , P e r t h ,

Western A u s t r a l i a

Nevada

Robinson

Solomons

Vickery

Weeks

Robin Yates

Z ilc o

Maxwell

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

APPENDIX E

Requested r a t e s

General

45#

45#

45?

45#

570

45#

P r e f e r e n t i a l

45# flew Zealand

45# 6 "

45# « »

45# plu s $0,02 per

cut of o v e ra ll

le n g th f o r each $1

or p a r t th e r e o f by

which the value f o r duty i s le s s

than $6

45# 5 7 0

Withdrawal of

P r e f e r e n t i a l r a t e

45# England

45# New Zealand

30# p lu s $0.02 per

cm of o v e r a ll

le n g th f o r each $1

or p a r t t h e r e o f by

which th e valu e

f o r duty i s l e s s

than $6 : New Zealand

45# 1 7 0 New Zealand 2. A r tic le s of luggage made from m a te r ia ls o th e r than p l a s t i c

4 2 .0 2 .9

Request by R eq ue sts and s u g g e s t i o n s

C u r r e n t t a r i t t

i ten a f f e c t e d

Requested r a t e s

General P r e f e r e n t i a l

Buxton

Cramb on b e h a l f of: Faigen

French Sheldon Noveltrim Paragold

P e e rle ss

1. That the Commission in f ix i n g g en eral r a t e s of duty,

p re s e r v e duty p re fe re n c e s in r e s p e c t of goods bein g

th e products o f New Zeala nd, a t a l e v e l of p re fe re n c e

a t l e a s t as f a v o u ra b le as o b ta in e d a t th e time of

th e h e a r in g , f o r th e items shown

2. That, in keeping with th e Australia-N ew Zealand tr a d e

agreement of 7 May 1973, i f i t i s shown t h a t th e duty

in f a c t can be lower than i t is a t the p r e s e n t time,

t h i s sho u ld be th e duty a p p lic a b le to New Zealand

goods

1 . On b e h a l f of th e f i v e m a n u fa c tu re rs , in r e l a t i o n to

handbags -(a) f o r l a d i e s 1 handbags made from v in y l or o th e r

a r t i f i c i a l p l a s t i c m a t e r i a l s :

( l ) up to $0.40 each value f o r duty

4 2.02.1

4 2 .0 2 .2 4 2 .0 2 .9

4 2 .0 3 .4 4 2 .0 3 .9

( b e l t s o n ly )

4 2 .0 2 .9 Duty f r e e

( l i ) from SO.41 to $1.50 each v a lu e f o r duty

( i l l ) from $1.51 to $3.00 each valu e f o r duty

( i v ) over $3.00 each valu e fo r duty

(b) f o r l a d l e s ’ handbags made from a l l o t h e r

m a t e r i a l s

2 . F u r th e r , on b e h a l f of P aragold, th a t the d u tie s

re q u e ste d in l ( a ) above a ls o apply to shopping

bags (of any m a te ria l but p a r t i c u l a r l y of canvas

or v in y l ) and beauty ( v a n ity ) cases of any

m a te ria l c l a s s i f i e d In 42 .0 2 .9

1 1 S p e c if ic duty

$0.75 each

» 45?

” 352

4 2 .0 2 .9 352

4 2 .0 2 .9

M inimum sargin 152 : N.Z. I I ” 302 : »

N " 27{2: f l

I t 1 1 22i%: I f

» 1 1 302 : I I

N .Z .: Maintenance of

e x i s t i n g p re feren ce

margin of 27i2 «

«

LEATHER AMD LEATHER SUBSTITUTE PRODUCTS

Page 5 of APPENDIX E

R e q u e s t by Requests and s u g g e s tio n s

C u rre n t t a r i f f

i te a a f f e c t e d

Requested r a t e s

General P r e f e r e n t i a l

Denzil Don

Dodge

E v e r l i t e

A ssista n ce through th e r e t e n t i o n of t a r i f f b a r r i e r s 4 2 . 0 2 .9 At or n e a r 45% At or n e a r !?■£%

a t o r n e a r th e l e v e l a t th e time of th e h e a r in g .

This a p p lie s in p a r t i c u l a r to the airway and shopping

type bags

1. That th e ex clu sio n to item 42.02 as s e t out

hereunder:

" A r t i c l e s made by a moulding process In c lu d in g

the 'vacuum-formin g' process whereby p re h e ated

p l a s t i c p l a t e or s h e e t i s fo r c e d by vacuum

pump to assume th e shape of the mould ( e .g .

s u i t c a s e s of a r t i f i c i a l p l a s t i c m a t e r i a l ,

with the body and l i d moulded by the 'vacuum­

formin g' p ro c e s s ) (39.07)" should be removed

2. That a s e p a r a t e sub-ite m in item 42.02 be

c r e a t e d to in c lu d e the fo llow ing goods:

s u i t c a s e s , h a tb o x e s, o v e rn ig h t bags,

t r a v e l l i n g bags, b r i e f c a s e s , a tta c h e

c a s e s, e x e c u tiv e c a s e s , and o th e r types

of bags a rd cases used in conjunction

with t r a v e l l i n g

Maintenance of t a r i f f r a t e s (a t time of h e a r in g ) 4 2 . 0 2 .9 45% 17^·%

on imported tra v e ig o o d s

42.02 No change in d u tie s e x i s t i n g a t time

o f h e arin g

F a i pen Supported th e re q u e s t by Cramb on b e h a l f of f i v e 4 2 .0 2 .9

manufactu rers of l a d i e s ' handbags

4 2 . 0 3 . 4 4 5 ? o r $0 .2 5 e ac h , w hic hev er i s t h e h i g h e r

LEATHER AMD LEATHER SUBSTITUTE PRODUCTS

Page 7 of APPENDIX E

Request by R equests and su g g estio n s

C u rre n t t a r i f f

item a f f e c t e d

Requested r a t e s

General P r e f e r e n t i a l

Herfords

H ill

Hughes

l e c r a f t

Madison

1. Supported to e ACMA re q u e st f o r luggage made

s u b s t a n t i a l l y of p l a s t i c m a t e r i a l s

2. A r t i c l e s of luggage made s u b s t a n t i a l l y of

o th e r m a t e r i a l s

Maintenance of the e x i s t i n g ( a t th e time of th e

h e arin g ) r a t e s of duty on s a d d le r y , h arn ess and

b r i d l e s

Supported th e r e q u e s t o f Wallin Dunkley on b e h a l f

of th e b e l t m a n u f a c tu r e r s ' " a s s o c i a t i o n " in r e s p e c t

of men's, b o y s ' and l a d i e s ' l e a t h e r b e l t s

D u tie s be in c re a s e d to giv e th e same p r o t e c t i o n as

a p p lie d b e fo re th e December 1972 currency

re v a lu a tio n

1. That q u a n t i t a t i v e r e s t r i c t i o n s be p la c ed on

im ported b e l t s from developin g n a tio n s

2. The d u t i e s a t th e time of th e h e a r in g were

regarded as ad eq u a te , a g a i n s t advanced economic c o u n tr ie s

4 2 .0 2 .9

" 45? Not l e s s th an 25 %

4 2 . 0 1 .9 40? 1 7 |2

4 2 .0 3 .9

( b e l t s o n ly )

4 2 . 0 2 .9 Not s p e c i f i e d

4 2 .0 3 .9 Q u a n tita tiv e r e s t r i c t i o n s

( b e l t s o n ly )

“ 5 2 2 2 #

Primage 5 ?

Page 8 of AFFEHDIX E

Requeste d r a t e s

General P r e f e r e n t i a l

No r e d u c tio n of e x i s t i n g margins of

p r e f e r e n c e to New Zealand

174%

m %

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 9 of APPENDIX E

Request by R equests and su g g es tio n s

t a r i f f ^ Requested r a t e s

5 ^g | ) ) a f f e c t e d General P r e f e r e n t i a l

Nedor 1 . A r t i c l e s of luggage under th e s t a t i s t i c a l keys shown

2 . Handbags, w a l l e t s , key tabs and th e l i k e under th e

s t a t i s t i c a l keys shown

4 2 . 0 2 .9 4 5? p lu s th e amount

S t a t . keys by which th e lo n g e st

16, 27, 49, dimension o f the

5X, 107, case in l e n g th ,

118, 129, depth or w id th , when

162, 173, m u l t i p l i e d by 12£

184, 195, c e n ts/c m , exceeds

209, 21X, th e fob p r i c e

220, 231,

242 and 253

4 2 .0 2 .9

S t g t . keys

38, 60, 71,

82, 93, 13X,

140, 151, 264, 275,

286, 297,

300, 311, 322 and 333

45?

17jr? p lu s t h e amount

by which th e lo n g e s t

dimension o f th e

case in l e n g th ,

dep th or w id th , when

m u l t i p l i e d by 12-J

c e n ts/c m , exceeds

th e fob p r i c e

17*?

Noveltrim Supported th e re q u e s t by Cramb on b e h a l f o f f i v e

m anufacturers of handbags

4 2 . 0 2 .9

35?

45?

52$

20 ? 17$ 22$

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 11 of APPENDIX E

Request by R equests and s u g g e s tio n s

C u rre n t t a r i f f

item a f f e c t e d

Requested r a t e s

General P r e f e r e n t i a l

Talty

and on b e h a l f o f;

Boans

fo sca

Wallin Ounkley on

b e h a l f of;

Buckle

Dome

Hughes

L i n e

Nevada Robinson

Solomons

Saddlery

Sad d les, h a rn e ss and b r i d l e s

Leathergoods, m ain ly b r i e f cases and o v e rn ig h t bags

42,01

4 2 .0 1 .9

4 2 .0 2 .9

The " a s s o c i a t i o n " o f l e a t h e r b e l t m an ufacturers re q u e ste d 4 2 ,0 3 ,9

p r o t e c t i o n as shown in re s p ec t of m en's, b o y s' and l a d i e s ' ( b e l t s only )

l e a t h e r b e l t s

25% 25%

40%

45%

45% 45%

N .Z .; F r e e , provid ed

t h a t , in re s p e c t of

im ports from New

Zealand, n o t l e s s

than 100% o f the

f a c t o r y or works

c o s t i s re p re s e n te d

by la b o u r an d /o r

m a t e r i a l s o f New

Zealand o r New

Zealand and A u s t r a l i a

and in c o n s i d e ra t i o n

o f t h i s concession -

(a) t h e im p o sitio n

of value a n d /o r

q u a n t i t a t i v e

r e s t r i c t i o n s on

A u s t ra lia n manu­

f a c t u r e d l e a t h e r

b e l t s Imported in t o New Zealand

be l i f t e d , and

Page 12 of APPENDIX E

Requeste d r a t e s

P r e f e r e n t i a l

(b ) New Zeala nd g ra n ts

duty f r e e e n try

f o r A u s t r a lia n

l e a t h e r b e ' ts of

100% A u s t r a lia n

c o n t e n t .

APPENDIX F

The goods listed in the reference to the Commission, and as specified in the Customs Tariff (See Appendices A and B).

Those commodities in the Manufacturing Census Commodity Classification of the Australian Bureau of Statistics which correspond approximately to the 'goods under reference'. For the purpose of the report, Leather Products have been divided by the Commission into eight categories or "product groups". These product groups and the commodities and

tariff items included in each of them are:

Tariff Classification

Items Statistical Keys

42.04.1

42.03.9 (part)

42.02.9 (part) Not identifiable

42.02.9 (part)

16, 27, 49, 5X, 60, 107, 118, 129, 162, 173, 184 195, 209, 21X, 220, 231, 242, 253, 297 (part),

300 (part), 311 (part), 322 (part), 333 (part)

71, 82,93, 13X, 140, 151, 297 (part), 300 (part), 311 (part), 322 (part), 333 (part)

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 2 of APPENDIX F

Term Definition and notes

Wallets 364.61, 864.65 42.02.9 (part)

Saddlery 991.01, 991.11 42.01.1

42.01.9

Other Leather Products 364.81, 930.58,b 999.91b , 999.92b 42.02.1 42.02.2 42.02.9 42.03.4

42.04.2 42.04.9 42.05.0 43.04.9

264, 275, 286

16 IX

23, 18, Hot 26

10 2X 27, 28

45 29, 3X identifiable

49

a Code number used in the Manufacturing Census Commodity Classification of the Australian Bureau of Statistics. The description applying to each of these code numbers is given in Table 1 of Appendix G.

b Partial coverage only of these code numbers in the inquiry.

For simplicity, the term Leather Products is used in the report to cover both leather and leather substitute products. Further details of the commodity codes listed above, and their relationship to the goods under reference, are given in Appendix 1 of the ’Leather and Leather Substitute Products’, Statistical Handbook, Tariff Board, Canberra, October 1972. Most of the statistical data presented for product groups in the report relate strictly

to che commodities covered by those groups. However, some data are presented also for establishments which are mainly engaged in making the commodities concerned (e.g. see

Page 3 of APPENDIX F

Table 2 in Appendix G; see also the notes below on the meaning of the term 'Leather Products industry'» as used in the report).

The industry which consists of establishments mainly engaged in making 'Leather and Leather Substitute Products n.e.c.' (i.e., industry class 3412 in the Australian Standard Industrial Classification (ASIC)). Most of the establishments making the 'goods under reference* would be included in this industry. The following points are worth noting about the relationship of the Leather Products industry to those activ­

ities which are strictly the subject of the Commission's inquiry:

. The Commission's inquiry covers those tariff items which correspond as closely as possible to the commodities primary to ASIC class 3412 (Leather and Leather Sub­ stitute Products n.e.c.) in ASIC. The ASIC is primarily a system for classifying establishments and ASIC class 3412 is described as follows:

"Establishments mainly engaged in manufacturing products of leather or leather substitutes including leather machine belting, packing, saddlery, harness, bags, cases, handbags or wallets (except footwear or leather clothing) ..."

. The following differences between the scope of the inquiry and that of ASIC class 3412 should be noted:

Four commodities primary to ASIC class 3412 are excluded from the inquiry (viz. 789.03 men's and boys' vinyl coated fabric belts, 789.07 women's and girls' vinyl coated fabric belts, 789.11 braces and 835.18 leather toys and games.)

Two commodities primary to ASIC class 2333 (canvas products, and associated textile products n.e.c.) have been included in the inquiry. These items are 864.17 canvas suitcases, trunks, attache cases, kitbags, travelling and overnight bags and cases, and 864.47 other canvas bags including brief cases, shopping bags, airways bags and

school bags of shoulder strap type.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 4 of APPENDIX F

Term Definition and notes

- The product descriptions (commoditv codes) used in ASIC class 3417 differ from those used in the Customs Tariff. There are 33 commodity codes ’corresponding' to the 12 tariff items covered by the inquiry into the Leather Products industry.

- Several commodities primary to ASIC class 3412 are only oartiallv covered by the inquiry. Products covered by the following commodity codes but excluded from the innuirv are: "64.15 Moulded cases of plastic material, including those vacuum-formed sen,5.0 whips and leggings 999.91) Products not specified or classifiable to other commoditv codes

999.92) Some of these products would be included in some of the statistics presented in this report.

Subsidy equivalents The subsidy equivalents of a particular set of tariffs are the (annual) subsidies which would provide the domestic industry with the same amount o c support as is aff­ orded by those tariffs. They can be represented as transfer payments from the cons­ umers to the producers of protected goods. Thus the total amount of assistance

provided to manufacturers of Leather Products by the tariffs on these goods (the 'gross subsidy equivalent' of the tariffs) can be represented as a transfer payment from the consumers to the manufacturers of such goods (paid in the form of the higher prices the local manufacturers are able to charge as a result of the tariffs). As

the manufacturers of Leather Products themselves use certain materials which are protected by tariffs, they also can be said to make a transfer nayment to the local producers of those materials (in the form of the higher prices which the producers are able to charge as a result of the tariffs on them). The net amount of assistance

received by the manufacturers of Leather Products can thus he represented as the difference between the additional payments they receive from the buyers of their products and the additional pavments they make to the supnliers of their inputs, as a result of tariffs. -his net amount of assistance (the 'net subsidy equivalent') corresponds to the eff­

ective rate of protection.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLES

Number Title Page

1 PRODUCTION OF LEATHER PRODUCTS: AUSTRALIA, 1966-67 AND 1972-73 3-5

2 CHARACTERISTICS OF THE LEATHER PRODUCTS INDUSTRY: AUSTRALIA, 1972-73 6

3 COST STRUCTURE OF MANUFACTURERS FOR THE MAIN GROUPS OF LEATHER PRODUCTS: AUSTRALIA, 1971-72 7

4 OUTPUT OF LEATHER PRODUCTS: AUSTRALIA, 1959-60 TO 1972-73 8

5 QUANTITY OF OUTPUT OF CASES: AUSTRALIA, 1959-60 TO 1972- 73 9

6 PROFIT, CAPITAL AND SALES PERCENTAGE RATIOS FOR THE LEATHER PRODUCTS INDUSTRY: AUSTRALIA, 1971-72 10

7 PROFITABILITY OF THE LEATHER PRODUCTS INDUSTRY: AUSTRALIA, 1969-70 TO 1971-72 11

8 IMPORTS OF CASES: AUSTRALIA, 1966-67, 1972-73, 1973- 74 AND 1974-75 12

9 APPARENT DEMAND FOR CASES: AUSTRALIA, 1966-67 AND 1972-73 13

10 APPARENT DEMAND FOR LEATHER PRODUCTS: AUSTRALIA 1972- 73 14

11 APPARENT DEMAND FOR LEATHER PRODUCTS: AUSTRALIA, 1966-67 TO 1972-73 15

12 LOCAL MANUFACTURERS' SHARE OF THE TOTAL VALUE OF THE MARKET .FOR LEATHER PRODUCTS: AUSTRALIA, 1966-67 TO 1972-73 . 16

13 VALUE OF IMPORTS OF LEATHER PRODUCTS: AUSTRALIA, 1966-67 TO 1973-74 17-19

14 SOURCES OF IMPORTS OF LEATHER PRODUCTS: AUSTRALIA, 1973- 74 20-22

15 VALUE OF EXPORTS OF LEATHER PRODUCTS: AUSTRALIA, 1966-67 TO 1973-74 23

16 QUANTITY OF OUTPUT OF HANDBAGS: AUSTRALIA, 1959-60 TO 1972-73 24

APPENDIX G

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 2 of APPENDIX G

TABLES - continued

Number Title Page

17 IMPORTS OF HANDBAGS: AUSTRALIA 1973-74 AND 1974-75 , 1966-67, 1972-73, 25

18 APPARENT DEMAND FOR HANDBAGS: AND 1972-73 AUSTRALIA, 1966-67 26

19 IMPORTS OF WALLETS: AUSTRALIA, 1973-74 AND 1974-75 1966-67, 1972-73, 27

20 APPARENT DEMAND FOR WALLETS: AUSTRALIA, 1966-67 AND 1972-73 28

21 NUMBER OF FACTORIES AND PERSONS EMPLOYED IN THE LEATHER PRODUCTS INDUSTRY: AUSTRALIA, 1959-60 TO 1972-73 29

" TABLE 1 : PRODUCTION OF LEATHER PRODUCTS3 : AUSTRALIA, 1966-67 AND 1972-73

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 3 of APPENDIX G

Code Description

1966-67 1972 -73

Quantity produced Pro­ duction

value

Quantity oroduced Pro­ duction

value®

MACHINE 308.03 BELTING leather

*000

n.a.

$'000

285C

f000

n.a.

$'000

200°

TOTAL MACHINE BELTING n.a. 285 n.a. 200

LEATHER 789.02 BELTS Men's and boys'

leather belts 2,052 1,962 1,949 4,373

789.06 Women's and girls' leather belts 128 86 230 401

TOTAL LEATHER BELTS 2,180 2,048 2,179 4,774

SPORTS . 832.92 BAGS Golf bags 75 756 81 1,021

832.95 Other bags n.a. 128 n.a. 180

TOTAL SPORTS BAGS n.a. 884 n.a. 1,201

CASES

864.11

Luggage - leather 138 866 62 517

864.13 fibre 991 3,033 1,024 3,823

864.15 plastics 331 1,843 536 4,359

864.17 canvas 39 97 30 167

864.19 other 51 298 55 533

Total luggage 1,550 6,137 1,707 9,399

864.41

Small bags - leather 155 913 85 689

864.43 fibre 94 157 56 114

864.45 plastics 1,559 2,309 1,073 2,524

864.47 canvas 229 343 353 1,079

864.49 other 20 55 n.a. n.a.

Total small bags 2,057 3,777 1, 567 4? 406

864.71 864.73

864.75 864.77

Camera cases -leather )

plastics )

Gadget bags -leather )

plastics )

TOTAL CASES

n.a.

n.a.

3,607d

n.a.

n.a.

9,914d

n.a.

n.a.

3,274d

n.a.

n ea .

L3,S05d

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 4 of APPENDIX G

TABLE 1 - continued

Code Description

1966-67 1972 -73

Quantity produced Pro­ duction

value

Quantity produced Pro­ duction

valueb

Ό 00 $'000 '000 $'000

HANDBAGS Ladies' handbags -864.31 leather 502 2,950 371 3,180

864.33 plastics 1,938 4,645 1,271 5,069

864.39 other 393 1,560 359 3,982

Total ladies' handbags 2,833 9,155 2,001 12,231

Purses -

864.51 leather 619 547 443 483

864.55 plastics 875 405 810 360

864.58 other 96 364 632 2,585

Total purses 1,590 1,316 1,885 3,428

TOTAL HANDBAGS 4,423 10,471 3,886 15,659

WALLETS 864.61 leather 468 1,075 667 1,875

864.65 plastics 450 59 835 320

TOTAL WALLETS 918 1,134 1,502 2,195

SADDLERY 991.01 Saddles 9e 450e 19 1,673

991.11 Harness and harness parts n.a. 621 n.a. 1,325

TOTAL SADDLERY n.a. 1,071 n.a. 2,998

OTHER LEATHER PRODUCTS 864.81 Watchstraps n.a. n.a. 941 492

980.58 Other products of leather and leather substitutes n.a. n.a. n.a. 4,647

999.91 ) ) Other articles n.a. n.a. n.a. n.a.

999.92 )

TOTAL OTHER LEATHER s l ίο

PRODUCTS

TOTAL ALL COMMODITIESf 25,807 45,971

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 1 - continued

Page 5 of APPENDIX G

a The term Leather Products and the product group titles, Machine Belting, Leather Belts, etc., are defined in sections 2 to 8 of this report.

b Value of output data for 1972-73 have been compiled based on unit values for commodity sales and transfers.

c Estimated; data for "leather machine belting" (308.03) are not separately recorded.

d Includes all types of Cases for which data are available.

e Estimated; data were collected on a different basis from 1968-69 onwards.

f Total value of output of goods under reference for which data are available.

n.a. Not available.

.. Less than half the smallest unit recorded.

Source: Based on data published by the Australian Bureau of Statistics (ABS).

TABLE 2 : CHARACTERISTICS OF THE LEATHER PRODUCTS INDUSTRY3 : AUSTRALIA, 1972-73

Machine Belting & Leather All manu-

Handbags Wallets .Saddlery Other Products factoring Leather industry industries Products

Establishments” no.

Employment” : Males no.

Females no.

Total no.

Wages and salaries $'000 Turnover $'000

Stock changes $'000

Output $'000

Purchases” $'000

Value added $'000

Average size of establishment: Persons employed Wages and salaries $' no.

'000

Turnover $''000

Output $ '000

Purchases $ '000

Value added $ '000

146 282 428

1,581 6,542 +205 6,747

4,028 2,720

16 61 252 260 155 105

30 41 71 213 620 +4 624 361 263

18 53

155 156 90 66

70

654 703

1,357 4,138 14,426 -488

13,938 6,970 6,968

19 59

206 199 100 100

75

386 860

1,246 4,397 17,470 -329

17,141 8,619 8,522

17 59

233 229 115 114

32 73 10 5 334

1,593 +79 1,672 1,006

666

9

28

133 139 84 56

47

236 111 347 964

3,960 +94 4,054 2,547

1,507

7

21 84 86 54

32

116

309 592 901

2,590 8,619 +22 8,641

4,483 4,158

8

22 74 74 39

36

350

1,793 2,662 4,455 14,217

53,230 -413 52,817 28,014 24,804

13 41 152 151

80 71

36,433

952,219 345,574 1,297,793 5,811,792 26,375,613

+114,880 26,490,493 15,747,421 10,743,071

36 160 724 727 432

29 5

Data for establishments falling within ASIC Class 3412, further classified according to their major product group, as defined in Appendix F.

b Number operating at 30 June 1973.

c Average over whole year; includes working proprietors.

d Purchases, transfers in and selected expenses.

Source: Based on data published by the ABS.

>τ ) ί» oo CD

s,

5 ns M 25

O H X o

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

. b Range . b Range , b Range . b Range . b Range

Average— : — ■ — ■ “— Average— :-- °— Average— : — ■ — ®— Average— : ----°— Average— :--- 6 3-----^ m m . max. m m . max. min. max, m m . max. m m . max.

Materials used 47 39 61 42 36 57 41 35 52 45 39 49

Direct labour 19 16 25 25 15 42 30 20 33 27 24 41

Depreciation 1 0 2 2 1 3 1 0 1 1 0 1

Rent of machines 0 1 0 1 0 0 0 0

Other factory expenses Change in W,I.P. material 4 2 5 10 2 17 8 0 26 2 0 9

stock 2 0 4 • * -1 0 • ■ 0 • * 0 0 0

Cost of work finished Plus purchases of finished 73 66 86 79 69 90 80 ' 75 84 75 71 89

goods 0 1 0 0 0 1 0 3 0 0 0

Change in finished stocks 1 -4 6 -1 -4 1 -2 -4 2 -3 -5 1

45 36 61

24 15 42

1 0 3

. . 0 1

.7 .0 26

1 - 1 4

78 64 90

. . 0 3

-5 6

Cost of goods sold 74 67 86 78 67 91 79 77 83 72 66 90

Administration expenses Selling and distribution 10 3 17 12 5 18 12 3 18 8 2 11

expenses 16 9 22 10 4 11 9 5 14 20 8 23

78 67 91

11 2 18

11 4 23

xxxxxxxx

to t o OP r b

a Includes confidential cost data for Sports Bags, Saddlery and Other Leather Products.

b Derived from aggregate costs of all manufacturers.

.. Less than 0.5 per cent.

Source: Evidence.

o l-tt

> to to to s: axo

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 4 OUTPUT3OF LEATHER PRODUCTSb : AUSTRALIA, 1959-60 TO 1972-73

Leather Belts______

Qty Value

Sports Bags

Value

Cases

Qty Value

Handbags

Qty Value

Wallets

Qty Value

Saddlery

Value^

'000 $'000 $'000 '000 $'000 '000 $'000 '000 $'000 $'000

1959-60 n.a. n.a. 547 3,381 7,244 3,655 7,934 2,045 597

1960-61 n .a. n.a. 685 3,247 7,113 3,820 8,335 2,216 776

1961-62 n.a. n.a. 812 3,301 7,096 3,973 8,084 1,764 854

1962-63 n.a. n.a. 695 3,542 7,734 4,295 8,565 1,472 910

1963-64 n.a. n.a. 627 3,603 8,283 4,295 8,462 3,607 923

1964-65 n.a. n.a. 649 3,693 9,001 4,939 10,119 1,906 1,091

1965-66 2,140 1,674 885 3,642 9,190 5,270 10,666 1,325 1,133

1966-67 2,180 2,048 884 3,607 9,914 4,423 10,471 918 1,134

1967-68 1,892 2,041 719 3,580 9,654 4,838 11,711 895 1,077

1968-69 1,896 2,219 674 3,622 11,312 4,662 12,752 1,098 1,480

1969-70 1,776 2,108 786 3,287 10,942 5,202 14,405 1,257 1,541

1971-72 2,375 4,804 1,166 3,124 12,705 4,472 16,145 1,255 1,578

1972-73 2,179 4,774 1,201 3,274 13,805 3,886 15,659 1,502 2,195

840 868 872 873 943

963 910

1,123 1,286 1,899 2,047

2,481 2,998

Total all groups3

Value

$'000

17,162 17.777 17,718 18.777

19,238 21,823 24,458 25,574

26,488 30,336 31,829 38,879

40,632

a Value series are based on value of sales and transfers out for 1968-69 onwards.

b Insufficient data to include product groups Machine Belting and Other Leather Products,

c 1970-71 data are not available.

d Estimated for 1959-60 to 1967-68, data collected on a different basis for 1968-69 onwards

Source: Based on data published by the ABS.

hd t o m to

00

o 1-h

>5 •V M z O M X O

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE

a b

QUANTITY OF OUTPUT OF CASES : AUSTRALIA, 1959-60 TO 1972-73 ( Ό 0 0 units)

Total luggage & small bags

1959-60 195 924 236 56 1,411 323 68 1,503 76

1960-61 122 846 296 81 1,345 312 66 1,451 73

1961-62 137 774 246 61 1,218 286 77 1,529 191

1962-63 183 839 294 94 1,410 269 71 1,647 145

1963-64 179 905 273 95 1,452 240 79 1,692 140

1964-65 134 955 327 90 1,506 241 80 1,531 335

1965-66 132 943 335 104 1,514 223 91 1,506 308

1966-67 138 991 331 90 1,550 155 94 1,559 249

1967-68 128 1,030 346 88 1,592 135 75 1,545 233

1968-69 103 1,066 388 117 1,674 168 70 1,421 289

1969-70 99 1,033 385 115 1,632 103 70 1,070 412

1971-72 74 1,094 481 129 1,778 72 55 887 332

1972-73 62 1,024 536 85 1,707 85 56 1,073 353

a Excludes leather and plastic camera cases and gadget bags for which data were not available,

b 1970-71 data are not available.

Source: Based on data published by the ABS.

1,970 3,381 1,902 3,247 2,083 3,301 2,132 3,542 2,151 3,603 2,187 3,693 2,128 3,642 2,057 3,607 1,988 3,580 1,948 3,622 1,655 3,287 1,346 3,124 1,567 3 274

o rh

i5

2 ! O X

o

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 6 : PROFIT, CAPITAL AND SALES PERCENTAGE RATIOS FOR THE LEATHER PRODUCTS INDUSTRY3 : AUSTRALIA,

1971-72

Leather Belts

Manufacturing sector0

Manufacturers- represented:

Number 8 8 6 3 29

Total value of sales ($'000) 5, 016 5,774 4,434 1,120 18,545

Profit: Operating profit/funds employed 12.1 9.1 17.3 22.4 13.4

Operating profit/sales 5.3 8.1 7.1 10.5 7.5

Capital:

Working capital/funds employed 61.9 45.2 23.6 51.1 44.9

Fixed assets/funds employed 38.1 54.8 76.4 48.9 55.1

Sales: Sales/funds employed (ratio) 2.4 1.1 2.5 2.1 1.8

Total costs/sales 94.7 91.9 92.9 89.5 92.5

Working capital/sales 25.9 40.3 9.6 24.0 25.1

Stock on hand/sales 24.8 35.4 21.0 22.9 25.8

Trade debtors/sales 11.3 11.2 7.7 9.0 10.3

e

e

11.5 7.5

36.4 63.6

1.5 92.5 23.9 20.4

17.7

a No data available for Machine Belting .

b Data for manufacturers of Sports Bags, Saddlery and Other Leather Products are included in totals for Leather Products industry to preserve confidentiality.

c Data for manufacturing sector ratios obtained from 5,341 enterprises in Tariff Board annual financial survey 1971-72 .

d Includes sales of all types of Leather Products, e Not applicable.

Source: Evidence. Tariff Board.

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LEATHER AND LEATHER SUBSTITUTE PRODUCTS

LEATHER AND LEATHER SUBSTITUTE PRODUCTS Page 11 of APPENDi:

TABLE 8 : IMPORTS OF CASES3: AUSTRALIA, 1966-67, 1972-73, 1973-74 AND 1974-75

1966-67 1972-73 1973-74^

Quantity Value Quantity Value Quantity Value

July 1973 to March 1974^

Quantity

Luggage

leather plastics other

Total luggage

Small bags

leather plastics

'000 $ 'OOOldp c '000 $ 'OOOldp c '000

7 47 11 55 15

270 797 426

372 836 41 166 115

112

3,604 973 other

Total small bags 4,689

TOTAL CASES 5,068

$ 'OOOldp

124

1,598 503

883

150 775 439

88

4,300 3,000

1,018

213

2,075 1,280

556

139

5,636 c 3,613

2,225

255

3,423 2,539

1,364 7,388 3,568 9,388 6,217

2,247 7,710 4,586 9,944 8,442

Ό00

8

316 88

412

119

4,561 2,709

7,389

7,801

July 1974 to March 1975 ^

Quantity

'000

8

332 118

458

90

2,594 2,501

5,185

5,643

a Some Imports recorded under Item 42.02.9 are not specifically identifiable with the product groups used in this report. In such instances they have been apportioned proportionately between "small hags" and "handbags". This may result in some overstatement in this product group.

b Preliminary; subject to revision.

c Estimated.

d Corrected to adjust error in recording.

Source : based on data published by the ABS.

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LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 10 APPARENT DEMAND FOR LEATHER PRODUCTS : AUSTRALIA, 1972-73 ($'000) ____ ____

Machine Leather Sports Belting Belts Bags

Cases Handbags Wallets Saddlery

Other Leather Products

All groups

45,801

13,369

6,359 58,221

Imports as a percentage of (7„) 30 3 n.a. 25 25 35 24 21 23

apparent demand

a Estimate.

b Estimated landed duty paid value. Cone Imports under Item 42.02.9 are not specifically Identifiable with the product groups specified above. In such instances thev have been apportioned proportionately between Cases and Handbags. This may result in some over­ statement in those two sections and would result in some understatement in other sections,

particularly Other Leather Products.

c hot separately available; included in imnorts total for Ρ1 Î’ Μ ,

d Leather clothing accessories including some goods not under reference.

e Cone export commodity codes do not fall wholly within a product group. In such instances exports have been allocated on the basis of witnesses’ evidence.

n.a. Not available.

.. Less than 4500.

Source : Rased on data published bv the ABC.

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LEATHER AND LEATHER SUBSTITUTE PRODUCT!

TABLE 11 : APPARENT DEMAND FOR LEATHER .PRODUCTS : AUSTRALIA, 1966-67 TO 1972-73® ___________ ($’000)___________________________________________________

Machine Leather Sports „ b

Belting Belts Bags bases

Handbags b

Wallets Saddlery Other Leather Products

All groups

1966-67 360 2,024 1,025 12,093 13,210 1,633 1,137°

1967-68 321 2,004 821 12,161 14,993 1,579 1,342°

1968-69 334 2,125 827 13,006 16,363 1,998 1,997

1969-70 285 2,104 786d 14,733 16,683 2,303 2,207

1971-72 258 4,121 l,166d 16,257 20,307 2,455 2,750

1972-73 192 4,621 1,201d 18,398 20,769 3,024 3,657

n.a. 31,482

n.a. 33,221

4,556 41,206

5,008 44,109

5,808 53,122

6,359 58,221

a Data for 1970-71 are not available.

b Some imports recorded under item 42.02.9 are not specifically identifiable with the product groups speci­ fied above. In such instances they have been apportioned proportionalelv between Cases and Handbags. This would result in some understatements in other sections, particularly other Leather Products.

c Estimated; sales data collected on a different basis from later years.

d Represents local sales only; imports of Sports Bags are not separately available for these years, but are included with imports of 'Small bags"in the apparent demand total for Cases.

Source; Based on data published by the ABS.

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1966-67 75 98 86 81 79 69 90c

1967-68 76 97 88 79 78 67 88c

1968-69 81 96 81 81 79 73 90

1969-70 73 94 n.a. 73 83 65 84

1971-72 75 96 n.a. 76 76 57 82

1972-73 70 97 n.a. 75 75 65 76

n.a.

η.a.

79

75

78

79

81

79

80

79

78

77

a Sales and transfers out data for 1970-71 are not available,

b Supplies available equals local sales and transfers out less exports,

c Estimated,

n.a. Not available.

Source: Based on data published by the ABS.

O

LEATHER AND LEATHER SUBSTITUTE PRODUCTS Page 16 of APPENDI.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

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TABLE 13 : continued

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 13 : continued

a F.o.b. value.

b Some imports recorded under item 42.0?..9 are not specifically identifiable with the product groups specified above. In such instances they have been apportioned proportionately between "small baps" and "handbags". This would result in some understatements in other sections, particularly Other Leather Products,

c Preliminary; subject, to revision.

d Based on the assumption that two-thirds of the imports under item 42.0,3.9, statistical key 4 e, are Leather Belts.

e Imports of Sports Bags are not separately available after lOfS-hP, and are included in the "small bass" sector of Cases.

Source Based on data published by the ABS.

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LEATHER AND LEATHER SUBSTITUTE PRODUCT:

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 15 VALUE OF EXPORTS3 OF LEATHER PRODUCTS : AUSTRALIA, 1966-67 TO 1973-74^ ($'ooo)

612.10.01 Leather transmission, conveyor, elevator belts 612.10.09

a

Leather articles for machinery excluding belts 841.30.00 Clothing accessories of leather 831.00.00 Travel goods, handbags and

similar articles

612.20.01 Saddles, riding 612.20.09 Harness makers' goods 612.90.00 Leather manufactures not elsewhere specified

842.02.00 Artifical fur and articles thereof

16 9 59 41 45

4 7 18 6 8

90 88 144 161 200

117 150 148 267 208

51 50 42 45 64

51 51 64 65 84

24 16 45 39 32

. . 3 4 5

)

7 )

)

20 )

206

270 64 )

161 )

102

19

100c

263

276

203®

88

19

121C

235

298

309e

132

8

TOTAL 353 371 523 628 646 849 949 1,103

a Data relate to Australian produce only apart for 1973-74 which relate to total exports,

b 1973-74 data are preliminary and subject to revision.

c Codes 612.10.01 and 612.10.09 are now combined in code 612.10.00 ("Articles of Leather, composition leather for machinery, mechanical appliances or industrial purposes").

d Includes wrist straps,

e Combined by the ABS.

Source: Based on data published by the ABS.

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LEATHER AND LEATHER SUBSTITUTE PRODI

Total Handbags

1959-60 793 1,700 103 2,596 475

1960-61 777 1,809 108 2,694 535 591

1961-62 644 1,752 158 2,554 580 839

1962-63 534 2,109 251 2,894 642 759

1963-64 510 2,065 278 2,853 621 821

1964-65 529 2,392 410 3,331 509 894 205

1965-66 534 1,993 393 2,920 762 1,321 267

1966-67 502 1,938 393 2,833 619 875 96

1967-68 493 2,294 296 3,083 531 993 231

1968-69 456 2,032 511 2,999 447 875 341

1969-70 476 2,278 479 3,233 496 1,078 395

1971-72 509 1,655 399 2,563 492 834 583

1972-73 371 1,271 359 2,001 443 810 632

1,059 1,126 1,419 1,401

1,442 1,608 2,350 1,590 1,755 1,663

1,969 1,909 1,885

3,655 3,820 3,973 4.295

4.295 4,939 5,270 4,423

4,838 4,662 5,202 4,472

3,886

a 1970-71 data are not available .

n.a. Not available.

Source: Based on data published by the ABS.

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a Some inports recorded under iten 42.1)2.9 are not specifically identifiable with the product groups used in this report. Tn such instances they have been apportioned proportionately between "small bags" and "handbags". This mav result in some overstatements in this product group.

b Preliminary; subject to revision,

c Estimated.

Source : Rased on data published bv the ARS.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 25 of APPENDIX G

nd C TO ft)

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LEATHER AND LEATHER SUBSTITUTE PRODUCTS

TABLE 19 : IMPORTS OF WALLETS : AUSTRALIA, 1966-67, 1972-73, 1973-74 AND 1974-75

Wallets

leather plasticsc

1966-67 1972-73 1973-74a

July 1973 to March 1974 a

Quantity Value Quantity Value Quantity Value Quantity

'000 $ 10001d p h ’000 $ 'OOOldp h '000 $ 'OOOldp b Ό 00

245 326 629 861 761 983 551

1,555 182 1,210 203 2,044 289 1,514

a Preliminary; subject to revision,

b Estimated.

c Includes all non-leather Wallets.

Source : Based on data published by the ABS.

July 1974 to March 197 5 a

Quantity

ro5o

729

1,324

2,053

o

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 27 of APPEND!!

TABLE 20 : APPARENT DEMAND3 FOR WALLETS : AUSTRALIA, 1966-67 AND 1972-73

a Quantity of exports not available but believed to be negligible; demand taken as local sales plus imports.

b Output data used for 1966-67.

c Includes all non-leather Wallets.

Source: Based on data published by the ABS,

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LEATHER AND LEATHER SUBSTITUTE PRODUCTS

LEATHER AND LEATHER SUBSTITUTE PRODUCTS

Page 29 of APPENDIX G

TABLE 21 ; NUMBER OF FACTORIES PRODUCTS INDUSTRY : AND PERSONS EMPLOYED AUSTRALIA, 1959-60 to

IN THE LEATHER 1972-73®

Factories^* Persons employed0 Persons employed per factory

1959-60 433 5,200 12

1960-61 418 4,950 12

1961-62 392 4,600 12

1962-63 386 4,800 12

1963-64 383 4,950 13

1964-65 378 5,000 13

1965-66 374 5,050 14

1966-67 364 5,050 14

1967-68 359 5,200 14

1968-69 369 5,119 14

1969-70 373 5,328 14

1971-72 357 4,714 13

1972-73 350 4,455 13

a The industry covered by this table approximates the industry producing the goods under reference. For the years 1959-60 to 1967-68 it consists of the following factory sub-classes used in the factory censuses conducted by the Australian Bureau of Statistics: 07.04 - Saddlery, harness and whips; 07.05 - Machine belting leather or other; 07.06 - Bags, trunks and other goods of leather and leather substitutes. For the years 1968-69 onwards, it is represented by ASIC Class 3412.

1970-71 data are not available.

b Number operating at 30 June of each year.

c Includes working proprietors; employment at end o.f each year to 1969-70; employment for 1971-72 and 1972-73 is the average over a whole year.

Source: Based on data published by the ABS.

R7V2780