Government Cuts Hammer Demand For Dental Products

Cuts by the previous Australian Government to public dental and oral health services have driven down sales of products to dentists and allied oral healthcare professionals.

That's the key finding from the Australian Dental Industry Intelligence Report, the nation's most authoritative assessment of the market for dental products and services. It is published by the Australian Dental Industry Association (ADIA), the nation's peak business organisation representing manufacturers and suppliers in this sector of the economy.

"This is the third year in a row that sales of products to dentists have fallen. Whereas the initial declines were attributable to soft economic conditions arising from the global financial crisis, the decline over FY2012-13 is a direct outcome of cuts by the previous government to dental care programs," said Troy Williams, ADIA Chief Executive Officer.

In late 2012, the Chronic Disease Dental Scheme was axed by the former government, with replacement programs taking two years to be phased in. The adverse impacts were felt immediately as the value of consumable dental products sales fell by 6.0%; the value of dental laboratory products sales fell by 5.4%; and the value of dental instruments and fittings sales fell by 1.7%. Falls were common across almost all of the fourteen discrete categories measured in the report.

"These falls are significant in an industry sector that has grown by around 4.8% year-on-year for most of the past decade. The data confirms advice from our members that the past few years have been tough for businesses across the dental industry," Mr Williams said.

For the first time, the Australian Dental Industry Intelligence Report reviewed the market for over-the-counter dental products sold via retail outlets to consumers, a market sector that grew by 3.8% over FY2012-13. This outcome was expected as consumer spending on products such as toothpaste, toothbrushes and mouthwashes are less influenced by the external factors which affect consumer spending on services provided by dentists and allied oral healthcare professionals.

"Overall, the data shows the past few years have been difficult for businesses that supply dental products. That's why cutting red tape is a major policy priority for ADIA. We want out businesses to have the flexibility to grow in a tough market, create jobs and operate sustainably," Mr Williams concluded.

The Australian Dental Industry Intelligence Report is unique as it is based upon data from a range of government and non-government sources which is used to construct a model of Australia's dental industry. This report estimates the value of products and services that are sold by the dental industry to dentists and allied oral healthcare professionals. The full report is available to ADIA members only.