Why does sunscreen cost as much as whisky? Good luck trying to find out
Saturday, 17 March 2018
It's considered a necessity in New Zealand but it's worth its weight in whisky, vodka or champagne.
Questions about the cost of sunscreen in New Zealand and even talks of government subsidies of sunblock in New Zealand have not answered questions about why Kiwis are paying so much for the stuff, especially when it's so cheap in Australia.
And forget trying to shop around. If you want to buy 400ml of sunscreen this week from either of New Zealand's two main supermarkets, Countdown and New World, you'll be paying almost an identical price regardless of brand, type or supermarket.
Countdown had no variation in price at all across six brands of sunscreen advertised as available online. Whether it's Banana Boat for Kids, Nivea Sun's Protect and Moisture or the Cancer Society's regular lotion, all bottles are advertised as $18 excluding in-store deals and temporary discounts.
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Over at competitor New World, the three available 400ml bottles online at stores in Auckland show little variation, advertised between $17 and $18.80.
It is not clear which element of the manufacturing process is driving up the price. Stuff looked at the cost of purchasing the active ingredients common in most of the mainstream sunscreens. For a 200ml bottle, active ingredients such as homosalate, octyl salicylate, avobenzone and octocrylene amounted to anywhere between 18 cents and 89 cents each per bottle.
Typically, each bottle has 3-4 active ingredients which would come in at around $1.80 to $2.40 a 200ml bottle on average.
A number of sources within the industry also mentioned the cost of meeting regulatory requirements in places like Australia, which classify sunscreen as a medicine.
We requested a quote from Australian sunscreen testing company Dermastat which tests SPF factors in sunscreen. To concurrently test a brand advertised as SPF 50 and water resistant for 60 minutes on 10 test subjects, the cost amounts to $2547 dollars.
At both supermarkets just four brands dominate the market, producing 37 out of the 40 brands on the shelves.
Nivea Sun, owned by German company Beiersdorf AG, Neutrogena, owned by American Johnson & Johnson, Banana Boat, owned by American Edgewell Personal Care and the Cancer Society of New Zealand have almost identical prices across their range.
Cancer Society and Nivea dominate the sunscreen market in New Zealand, sharing about two-thirds of the total market share between them.
Beachgoers visiting Sumner Beach near Christchurch on Friday morning agreed that the price of sunblock was high.
Young mothers Sarah Doig and Niamh Buchanan felt they were definitely targeted by sunscreen companies because parents generally would do anything to protect their kids.
'We're an open market. Marketing. We're mums and we know that it's important for your children and we do pay the money,' Doig said.
They felt like there was a lot of confusion in the market about what people were paying for and why they were paying so much.
'There's a lot of discussion around whether they have the correct properties and you wonder what you're paying for.
'Zinc they say is the most important ingredient, well one of them did. Of course others dispute that because they're selling something different, but that's what I tend to look for. But I'm still not sure if that's correct or not,' Buchanan said.
Retiree Ira Root said if you made a bottle last it could be economical.
'It's not too bad if you work it out it could last four or five months, one person. But I suppose in theory it is dear.'
Argentinian travellers Federico Hoffmann and Fiorella Di Biase said Argentinian sunscreen was cheaper at about $10-15 a bottle but imported brands were far more expensive than New Zealand.
'For us we bought the Cancer Society product and we're going to take one to Argentina because it was really cheap for the amount of product.
'People use the national ones but we prefer the other ones because they are better quality. Banana Boat for example is a good quality product in Argentina,' Hoffmann said.
Cancer Society chief executive, Mike Kernaghan, would not reveal its profit margins.
'We can't provide you any wholesale commercial details as we have contractual arrangements not to disclose our wholesale prices due to their commercially sensitive nature.
'Wholesale costs include factors such as, but certainly not limited to: manufacturing (including testing) the products, shipping from Australia, and distributing around New Zealand. Any other brands or suppliers making sunscreen that meets the standards are going to have similar manufacturing and shipping costs as us.'
He specifically pointed to high costs of manufacturing and product formulation as the main reason for the price of sunscreen in New Zealand.
The Cancer Society's commercial arm Daffodil Enterprises buys the sunscreen off Australian Pharmaceutical Industries, who in turn contracts the work out to Baxter Laboratories in Melbourne.
Kernaghan pointed to stricter regulatory requirements on sunscreen in Australia. Sunscreen manufacture in New Zealand is unregulated, where, Kernaghan said, 'anyone can put anything in a bottle and call it sunscreen.'
A spokeswoman for API refereed all inquiries back to the Cancer Society.
Meanwhile Baxter Laboratories did not respond to request for comment.
A Johnson and Johnson spokeswoman also said she could not comment on the most expensive input in the sunblock manufacturing process.
Kernaghan said any public perception about the price of sunscreen had to be compared to other supermarket items.
'My answer would be compared to what? It is no different to any other product in a supermarket – there is a cost of getting the product to the store, the supermarket works on high volume, low margin across all of its products.
'If people were to view sunscreen purchases in the same way they view other purchases, like razor blades, it might make sense. Typically, for those regular families you would use 2 – 3 200ml tubes of sunscreen over the course of a summer. That equates to around $55 spend.
'My razor blades cost $32 for four and the four blades last me about a month…do you see what I am saying here? Does the public have the same perception about razor blades as they do sunscreen?'