[1]Skip to Main Content

[1]Skip to Main Content
(BUTTON)
[2]Menu
____________________
(BUTTON) Search
(BUTTON)
Search

Quick Links

* [3]News
* [4]Sports
* [5]Radio
* [6]Music
* [7]Listen Live
* [8]TV
* [9]Watch

(BUTTON)
* [10]COVID-19
* [11]Local updates
* [12]Live video
* [13]COVID-19 tracker
* [14]Subscribe to newsletter

*
* [15]Top Stories
* [16]Shows
* [17]Podcasts
* [18]Schedules
* [19]Frequency
* [20]LISTEN LIVE

Wondering why your glasses are so pricey? One company controls almost
everything about them

Social Sharing

[21]Cost of Living

Wondering why your glasses are so pricey? One company controls almost
everything about them

Prescription eyeglasses can range anywhere from the mid-$200s to more
than $1000 a pair in Canada. They're an expensive, but necessary,
product for many. But why are they so expensive?

Social Sharing

One single company owns a huge part of the industry: from lenses to frames to
retailers

CBC Radio · Posted: Sep 20, 2020 4:00 AM ET | Last Updated: September
20
Eyeglasses can be quite expensive due to the vertically integrated
nature of the industry. (Anis Heydari/CBC)
(BUTTON)
comments
Listen4:22

A global eyewear giant could be one of the reasons that eyewear is so
expensive for consumers in North America.

As part of a series answering listener questions, CBC Radio's The Cost
of Living took a closer look at the cost of sight for Canadians and why
it can be pricey.
* The Cost of Living ❤s money — how it makes (or breaks) us.
Catch us Sundays on CBC Radio One at 12:00 p.m. (12:30 p.m. NT).
We also repeat the following Tuesday at 11:30 a.m. in most
provinces.

Prescription eyeglasses can range anywhere from $240 to about $1,000 a
pair in Canada, [22]according to the Canadian Journal of Ophthalmology.

No competition often means higher prices

The answer to these high costs, in part, may be due to the market
dominance of a single player.

EssilorLuxottica is a single company that reported more than $27
billion in revenue for 2019. It makes everything from the lenses to the
frames in a pair of glasses.

The company also owns many of the retailers that sell to Canadians, and
even runs an American insurance company that pays out vision benefits.
The merger of Essilor and Luxottica created one of the largest eyewear
makers in the world. (Kai Pfaffenbach/Reuters)

It was formed in 2017 when Italy's Luxottica — owner of Ray-Ban and
Oakley glasses — merged with France's Essilor, owner of Crizal,
Transitions, Clearly and other brands.
* [23]Essilor and Luxottica to merge and create world's biggest
eyewear firm

The combined company now owns or controls many of the popular names in
eyeglasses that Canadians know and shop from, including LensCrafters,
Sunglasses Hut, and Pearle Vision. They also own or licence many other
eyewear brands, including Prada, Oakley, Armani or Tiffany and Co.

Essentially, the company tries to own a piece of everything to do with
a pair of glasses. The merger of Essilor and Luxottica also stopped the
two companies from competing each other in their previous core
businesses — Luxottica in making frames, and Essilor in making lenses.

European Union regulators [24]approved the merger on a similar
principle. Despite receiving complaints that there could be negative
effects on competition, the deal was deemed OK because essentially,
each company primarily operated in related, but not directly
competitive fields — the lenses versus the frames.

Billions of dollars influenced by one company

Prescription eyeglasses are big business in this country, accounting
for [25]about $1.7 billion of sales in 2017.

And while specific numbers on EssilorLuxottica's dominance in Canada
are not available, British newspaper [26]The Guardian reported in 2018
that Essilor alone controlled more than half the world's prescription
lens market.

The companies have reportedly used their market power to increase
prices, with Ray-Ban aviator glasses being a key example.
Luxottica acquired Ray-Ban in 1999 and then proceeded to [27]pull the
brand from [28]thousands of retailers.
Aviator sunglasses used to be more of a mass-market item, before
Ray-Ban was sold to Luxottica. (Luxottica/Associated Press)

Upon reintroduction, Luxottica only placed the glasses in higher-end
outlets. Instead of being able to purchase a set of Top Gun style
sunglasses at a gas station, you had to go to pricier stores.

In 2018, prior to merging with Essilor, [29]Luxottica reported that
Ray-Ban alone accounted for more than $3.7 billion of its net sales.
That's a lot of aviator glasses.

Cheaper alternatives avoid EssilorLuxottica suppliers

EssilorLuxottica does not own every player and retailer in prescription
glasses. Smaller competitors are popping up, such as Warby Parker,
Bailey Nelson and Ollie Quinn.

Part of how they are lowering costs — and therefore the price to
consumers — is by changing suppliers, according to an [30]an analysis
by faculty at the UCLA Anderson School of Management.
This profit margin analysis from the UCLA Anderson School of Management
shows potential price structures for both a Luxottica pair of glasses
and from competitor Warby Parker (anderson.ucla.edu)

According to the UCLA analysis, Warby Parker was still able to maintain
a profit margin while charging approximately $125 Cdn less than
Luxottica through working directly with lens and frame suppliers and
avoiding the licencing costs that come with the brand names offered by
the competing eyewear giant (such as Prada).

Retailer Ollie Quinn echoes that, saying that controlling its own
supply chain results in lower costs for its customers.
Smaller eyeglass retailers, such as this Ollie Quinn outlet in Calgary,
control their own supply chain to avoid higher prices from dominant
players such as EssilorLuxottica. (Anis Heydari/CBC)

"We do work very closely with independent manufacturers and frame
manufacturers, lens manufacturers," said Ollie Quinn operations manager
Priscilla Anderson.

"Our lens manufacturer is right here in Canada," explained Anderson.
"It allows us to control … our own supply chain. That means that all of
those savings and not having to pay for brand names and branding
rights."

It's about what customers will pay, in the end

The federal Competition Bureau has [31]noted that online competitors
have resulted in lower prices at times, though EssilorLuxottica does
have a piece of that market as well, through both e-commerce versions
of its existing brands and ownership of online retailers such as
EyeBuyDirect and Vancouver-based Clearly (formerly Clearly Contacts).
* [32]Clearly Contacts bought by Essilor for $445M

Smaller competitors such as Ollie Quinn, Bailey Nelson or Warby Parker
are also only a small fraction of the market. For example, Ollie Quinn
told CBC Radio's The Cost of Living that it's only targeting about five
to ten percent of the total glasses market and focusing on the middle
price range, starting at $165.
* Don't feel like waiting for your dose of The Cost of Living on
Sundays?
To listen anytime, [33]click here to download the show to your
podcast player of choice.
Subscribe to get episodes automatically downloaded to your device.

The Cost of Living reached out to EssilorLuxottica, as well as
representatives with subsidiary companies for comment and did not
receive a reply.

But in an interview with the [34]CBS newsmagazine 60 Minutes in 2013, a
Luxottica company representative said "everything is worth what people
are ready to pay."
__________________________________________________________________

Written and produced by Anis Heydari, with files from The Associated
Press and Reuters.
Click "listen" at the top of the page to hear this segment,
or [35]download the Cost of Living podcast.
The Cost of Living airs every week on CBC Radio One, Sundays at 12:00
p.m. (12:30 NT).

More from this episode

* [36]Why baby formula prices have doubled every 10 to 15 years in
Canada
* [37]What modern monetary theory is and what MMT could mean for
Canada's budget deficits
* [38]The Criminal Code bans interest rates above 60 per cent — so
how are payday lenders legal?
* [39]FULL EPISODE: The Cost of Living on the cost of stuff: payday
loans, baby formula, glasses and ... modern monetary theory?

Related Stories

* [40]Competition Bureau says eyewear shoppers deserve more choice
online

Comments

To encourage thoughtful and respectful conversations, first and last
names will appear with each submission to CBC/Radio-Canada's online
communities (except in children and youth-oriented communities).
Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce
and publish that comment in whole or in part, in any manner CBC
chooses. Please note that CBC does not endorse the opinions expressed
in comments. Comments on this story are moderated according to our
[41]Submission Guidelines. Comments are welcome while open. We reserve
the right to close comments at any time.

Footer Links

My Account

* [42]Profile
* [43]CBC Gem
* [44]Newsletters

Connect with CBC

* [45]Facebook
* [46]Twitter
* [47]YouTube
* [48]Instagram
* [49]Mobile
* [50]RSS
* [51]Podcasts

Contact CBC

* [52]Submit Feedback
* [53]Help Centre

Audience Relations, CBC
P.O. Box 500 Station A
Toronto, ON
Canada, M5W 1E6

Toll-free (Canada only):
1-866-306-4636

TTY/Teletype writer:
1-866-220-6045

About CBC

* [54]Corporate Info
* [55]Sitemap
* [56]Reuse & Permission
* [57]Terms of Use
* [58]Privacy
* [59]Jobs
* [60]Our Unions
* [61]Independent Producers
* [62]Political Ads Registry
* [63]AdChoices

Services

* [64]Ombudsman
* [65]Public Appearances
* [66]Commercial Services
* [67]CBC Shop
* [68]Doing Business with Us
* [69]Renting Facilities

Accessibility

It is a priority for CBC to create a website that is accessible to all
Canadians including people with visual, hearing, motor and cognitive
challenges.

Closed Captioning and Described Video is available for many CBC shows
offered on [70]CBC Gem.
* [71]About CBC Accessibility
* [72]Accessibility Feedback

*
* ©2020 CBC/Radio-Canada. All rights reserved.
* [73]Visitez Radio-Canada.ca

(BUTTON)

now

References

Visible links
1. https://www.cbc.ca/radio/costofliving/the-cost-of-living-on-the-cost-of-stuff-payday-loans-baby-formula-glasses-and-modern-monetary-theory-1.5715939/wondering-why-your-glasses-are-so-pricey-one-company-controls-almost-everything-about-them-1.5721176#content
2. https://www.cbc.ca/sitemap
3. https://www.cbc.ca/news
4. https://www.cbc.ca/sports
5. https://www.cbc.ca/radio
6. https://www.cbc.ca/music
7. https://www.cbc.ca/listen/
8. https://www.cbc.ca/television
9. https://watch.cbc.ca/
10. https://www.cbc.ca/news/covid-19
11. https://www.cbc.ca/news/local
12. https://www.cbc.ca/player/news/live
13. https://newsinteractives.cbc.ca/coronavirustracker/
14. https://subscriptions.cbc.ca/listmanagement/forms/coronavirusbrief?cmp=feed-gen_coronavirusbrief_newsletter-subscribe
15. https://www.cbc.ca/radio
16. https://www.cbc.ca/radio/shows
17. https://www.cbc.ca/radio/podcasts
18. https://www.cbc.ca/programguide/daily/today/cbc_radio_one
19. https://www.cbc.ca/radio/frequency
20. https://www.cbc.ca/listen/live/
21. https://www.cbc.ca/radio/costofliving
22. https://www.canadianjournalofophthalmology.ca/article/S0008-4182(17)30608-7/fulltext
23. https://www.cbc.ca/news/business/essilor-luxottica-merger-1.3937848
24. https://ec.europa.eu/competition/mergers/cases/decisions/m8394_4217_3.pdf
25. https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04377.html
26. https://www.theguardian.com/news/2018/may/10/the-invisible-power-of-big-glasses-eyewear-industry-essilor-luxottica
27. https://www.alphasunglasses.com/articles/turning-around-ray-ban-brand.html
28. https://www.theguardian.com/news/2018/may/10/the-invisible-power-of-big-glasses-eyewear-industry-essilor-luxottica
29. http://www.luxottica.com/sites/luxottica.com/files/luxottica_group_relazione_finanziaria_annuale_2018_eng_20190410.pdf
30. https://blogs.anderson.ucla.edu/global-supply-chain/2017/08/warby-parker-vs-luxottica-supply-chain-disintermediation-in-the-eyewear-industry.html
31. https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04377.html#fn6-rf
32. https://www.cbc.ca/news/business/clearly-contacts-bought-by-essilor-for-445m-1.2553349
33. https://www.cbc.ca/radio/podcasts/cost-of-living/
34. https://www.cbsnews.com/news/sticker-shock-why-are-glasses-so-expensive-16-06-2013/
35. https://www.cbc.ca/radio/podcasts/cost-of-living/
36. https://www.cbc.ca/radio/costofliving/the-cost-of-living-on-the-cost-of-stuff-payday-loans-baby-formula-glasses-and-modern-monetary-theory-1.5715939/why-baby-formula-prices-have-doubled-every-10-to-15-years-in-canada-1.5719165
37. https://www.cbc.ca/radio/costofliving/the-cost-of-living-on-the-cost-of-stuff-payday-loans-baby-formula-glasses-and-modern-monetary-theory-1.5715939/what-modern-monetary-theory-is-and-what-mmt-could-mean-for-canada-s-budget-deficits-1.5716939
38. https://www.cbc.ca/radio/costofliving/the-cost-of-living-on-the-cost-of-stuff-payday-loans-baby-formula-glasses-and-modern-monetary-theory-1.5715939/the-criminal-code-bans-interest-rates-above-60-per-cent-so-how-are-payday-lenders-legal-1.5716778
39. https://www.cbc.ca/radio/costofliving/the-cost-of-living-on-the-cost-of-stuff-payday-loans-baby-formula-glasses-and-modern-monetary-theory-1.5715939
40. https://www.cbc.ca/news/canada/british-columbia/eyewear-online-shopping-competition-1.4763257
41. https://www.cbc.ca/aboutcbc/discover/submissions.html
42. https://www.cbc.ca/account/
43. https://gem.cbc.ca/benefits/
44. https://subscriptions.cbc.ca/listmanagement/
45. https://www.facebook.com/cbc/
46. https://twitter.com/cbc/
47. https://www.youtube.com/user/CBCtv
48. https://www.instagram.com/cbc/?hl=en
49. https://cbchelp.cbc.ca/hc/en-ca/categories/115000249853-Help-with-CBC-Apps
50. https://www.cbc.ca/rss/
51. https://www.cbc.ca/radio/podcasts
52. https://cbchelp.cbc.ca/hc/en-ca/requests/new
53. https://cbchelp.cbc.ca/hc/en-ca
54. https://cbc.radio-canada.ca/en
55. https://www.cbc.ca/sitemap
56. https://cbchelp.cbc.ca/hc/en-ca/sections/203864688-Using-or-licensing-CBC-content
57. https://www.cbc.ca/aboutcbc/discover/termsofuse.html
58. https://www.cbc.ca/aboutcbc/discover/privacy.html
59. https://cbc.radio-canada.ca/en/working-with-us/jobs/
60. https://cbc.radio-canada.ca/en/vision/unions-associations
61. https://www.cbc.ca/ip
62. https://cbc.radio-canada.ca/en/impact-and-accountability/regulatory/political-ads-registry
63. https://youradchoices.ca/
64. https://cbc.radio-canada.ca/en/ombudsman/
65. https://www.cbc.ca/news/public-appearances-1.4969965
66. https://cbc.radio-canada.ca/en/services/commercial-services/
67. http://www.cbcshop.ca/
68. https://cbc.radio-canada.ca/en/working-with-us/partners-and-suppliers/
69. https://www.cbc.ca/productionfacilities/
70. https://watch.cbc.ca/
71. https://www.cbc.ca/accessibility/
72. https://www.cbc.ca/accessibility/feedback/
73. http://ici.radio-canada.ca/

Hidden links:
75. https://www.cbc.ca/
76. https://www.cbc.ca/search
77. https://www.cbc.ca/radio
78. https://www.cbc.ca/radio
79. http://www.cbc.radio-canada.ca/