Parallel importation and GST forcing Aussie book sellers offshore

The Australian Government’s continued decision to restrict parallel importation has forced Australian book retailer, Dymocks, to consider moving its online business overseas.

According to the retailer's chief executive, Don Grover, the decision to keep the local market closed to parallel imports, means Aussie book sellers must pay higher wholesale rates as local publishers are not subject to competition. Even after removing the Goods and Services Tax (GST), which is not charged on books in the UK and the US, books in Australia still come at a higher price.

Speaking to Computerworld Australia, Grover said the 30 and 90 day rules for supply and resupply – which mean Australian publishers must publish a book within 30 days of international release to earn import protection and then have 90 days to resupply a book to keep it – has resulted in local book sellers having to purchase books at a price decided by the publisher.

“The fact is that while the foreign exchange rate continues to be high, Australian book retailers cannot benefit from it, because although we’re buying books from overseas publishers we’re doing so through Australian publishers by law, which means that we can’t access those cheaper prices,” he said.

GST books are a lot less expensive for Australian consumers to buy online rather than from a book store, Grover says, and is putting too much pressure on book sellers.

According to Grover, in maintaining the restrictions on parallel importation and GST, the government has chosen to create a path for Australian consumers to buy offshore, rather than locally.

As a result, Dymocks is now considering moving its website offshore to enable the company to start supplying Australian customers with international product, while eliminating GST costs.

“First of all, what we’re trying to do is make a point to the government that this is ridiculous, why a 130 year-old Australian business needs to move its website offshore just to compete," he said. “The major point of this is making the point to government that both the parallel importation laws and the GST are currently putting Australian booksellers out of businesses.”

“Secondary to that is it actually makes sense for us to supply Australian customers using an overseas based website, and how can the Australian Government let that continue?”

Dymocks will make the final decision on moving offshore in February next year following the Federal Government’s consideration of the issues raised by the book seller and the Australian Retailers Association.

“The government are now considering their approach to lowering thresholds and doing other sorts of things that may mean an even playing field will be established for Australian retailers to be able to compete online.”

According to Grover, Dymocks' online business remained “solid”, however e-books and e-retailing were modest components when compared to its physical book retailing business.

As reported by Computerworld Australia, Aussie book retailers have agreed that issues of fragmentation and consumer confusion must be addressed if the local e-book market is to move beyond industry hype.

Follow Chloe Herrick on Twitter: @chloe_CW

Follow Computerworld Australia on Twitter: @ComputerworldAu

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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