Have lighting prices hit a turning point?

AFTER A decade of collapsing prices for luminaires, it looks like the tide may be turning.

America’s biggest fixture manufacturer has surprised the global  lighting industry with the first major price rise in the market in years.

Acuity Brands – parent of top brands in both North America and Europe including Lithonia, Winona, Holophane, Hydrel, Carandini, Gotham, Indy, Peerless and eldoLED – has announced that it is putting up its prices in the US for all traditional lighting technologies and many LED products by 6 per cent from Monday 11 June.

US trade officials complain that the prices of lighting products are drven down by unfair regional and national Chinese government subsidies to its manufacturers. 

The move is highly significant as Acuity – with annual sales of over $3.5 billion (€2.93 billion, £2.6 billion) – is seen as a sector leader and many independent light makers are expected to take their cue from the company.

Senior vice president of global sales Sero Cardomone blamed ‘significant inflationary pressure’ for the increase, but industry observers say there is a feeling among manufacturers that ‘enough is enough’ and trying to match prices for Chinese imports is a ‘race to the bottom’.

One UK manufacturer said the Acuity move could be seen as a ‘turning point’. ‘We’ve been absorbing cost pressures up to now as we haven’t felt we’ve been able to pass on [price increases] to customers. But we’ve now got to the situation where it costs more to install a luminaire than the price of the luminaire itself’.

He also cited the increasing costs of service to support customers and specifiers as a factor beyond the cost of the bill of materials of a lighting product.

Acuity has had a turbulent time on the New York Stock Exchange in recent times. Its stock price fell 23 per cent in 2017 as analysts and investors grumbled about profitability.

Acuity’s bold statement this week will be seized on by other brands who have absorbed increases in costs for raw materials, such as aluminium which has soared by 25 per cent and stands at $2,300 per tonne.

Another factor which could significantly drive up prices is the inclusion of lighting components in a list of Chinese exports due to be hit with US tariffs of 25 per cent. LEDs, as well as aluminium and solid-state electronic parts, are all included on the proposed list of 1,200 products issued by the Office of the United States Trade Representative.

The inclusion is designed to stop what the US sees as the dumping of below-cost solid state components in western markets by Chinese manufacturers, who officials say are aided by unfair government subsidies such as free land and machinery.

 

  • This year's Lighting Fixture Design  Conference takes place on Wednesday 20 June and Thursday 21 June 2018. Organised by Lux and LEDs Magazine, the event takes place at the Cavendish Conference Centre in London. For more information and to reserve you place, click HERE.

Comments 2

Great . So get rid of all the competition by getting them banned all over the world and then put up the prices . If they had spent a bit of time bringing out legislation to regulate the quality this would not have happened. They are never going to be able to compete with the chinese so unless they ban imports this is not going to work

Enough is truly enough. If one looks at the balance sheets of publicly traded lighting manufacturers, they are generally eeking out a profit in the single digits....and this is during excellent economic times. What will happen during an economic downturn, one can only guess, but it probably won't be pretty.

Leave your comment