a export potential study 1964 UNITED STATES DEPARTMENT OF COMMERCE Luther H. Hodges, Secretary Franklin D. Roosevelt, Jr., Under Secretary- Thomas G. Wyman, Acting Assistant Secretary for Domestic and International Business BUSINESS & DEFENSE SERVICES ADMINISTRATION George Donat, Administrator For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 -Price 15 cents Foreword This report is designed to help U.S. manufacturers of photo- graphic products to sell in the United Kingdom and France, where the market potential for high-quality advanced types of U.S. photographic equipment is expanding rapidly. It is one of a series of market studies made by the Business and Defense Services Administration (BDSA), U.S. Department of Commerce. The purpose of the series is to uncover new or expanding op- portunities overseas for U.S. businessmen by identifying and describing specific markets for particular products or groups of products. This study was written by Larry C. Cozart, Office of Scientific and Technical Equipment, BDSA, Donald S. Parris, Director. Technical guidance was furnished by George R. Donnelly, Chief of the Photographic Products Branch of the Scientific, Photo- graphic, and Business Equipment Division. Commercial officers in the U.S. Embassies in London and Paris collected and supplied pertinent information. George Donat, Administrator Business and Defense Services Administration Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://www.archive.org/details/marketforselecteOOunit Preface Definition of Photographic Products: The photographic prod- ucts covered in this study are primarily industrial, commercial, and professional types. They are broken down into two cate- gories: (1) still and motion picture cameras, and projection equipment; and (2) apparatus used in reproduction processes in- cluding photocopying, blueprinting, whiteprinting, and micro- filming. Contents Page Preface— Definition of Photographic Products in Part I. -The United Kingdom Summary Analysis 1 Domestic Production 2 Exports 4 Distribution 5 Consumption 6 Imports 7 Competitive Market Factors 10 Sales Outlets and Business Practices 11 Tariffs, Nontariff Restrictions, and Other Pricing Factors 12 Export Potential for U.S. Products. 14 Part II. —France Summary Analysis 17 Domestic Production 18 Exports 19 Distribution 20 Consumption 21 Imports 21 Competitive Market Factors 24 Sales Outlets and Business Practices 24 Tariffs and Nontariff Restrictions 26 Export Potential for U.S. Products 26 Part L— The United Kingdom SUMMARY ANALYSIS Since the end of World War II, growing demand for photographic products in the United Kingdom has stimulated production of and foreign trade in these items. In the prewar period, the U.K. consumer's in- terest went little beyond the box- type camera. A sizable amateur market has now developed for more advanced and sophisticated types of still and motion picture equipment. Furthermore, an even greater market potential exists for com- mercial, professional, and scientific photographic equipment and ma- terials, in view of the fact that sales of nonamateur items in the United Kingdom average about 60 percent of total sales of photographic prod- ucts, roughly the same proportion as in the United States. The market in the United Kingdom for U.S. photographic products has room for considerable expansion despite a decrease in sales in 1962. Specifically, the categories of lenses, processing and finishing equipment, photocopying and microfilming apparatus, studio equipment, and other noncamera or nonprojector items offer the greatest promise. Sales of this type of equipment by U.S. manufacturers accounted for 30 percent of the U.K. market in 1962. Factory shipments of photographic products (excluding sensitized materials, paper, and chemicals) in the United Kingdom in 1962 totaled approximately $33 million, including $3.2 million for lenses and $8.5 million for reproduction equipment. Trade sources indicate that 60-85 percent of U.K. camera and projection equipment production consists of items for industrial, commercial, and/or professional use. Exports of photographic products (excluding sensitized materials, paper, and chemicals) from the United Kingdom totaled $25.2 million in 1962. Leading customers were West Germany, Italy, and the United States. Distribution of much of the nonamateur photographic equipment in the United Kingdom is made direct from the manufacturer or importer to the retail trade. Because of certain variable factors, there is no precise formula for deriving retail prices for photographic goods. The U.K. import agent is the logical point of contact for the U.S. ex- porter in the establishment of prices and marketing of products. Apparent consumption of photographic equipment was valued at $4 1.3 million in 1962, up from $26.6 million in 1957. Three-fourths of the increase was attributed to larger purchases from abroad. Imports increased by $23.1 million and exports by only $12.1 million. The best- selling categories were projectors at $ 12 million and still cameras at $10 million. While total U.K. imports of photographic products (excluding sensitized materials, paper, and chemicals) increased substantially in 1960-62, from $26.6 million to $33.5 million, imports from the United 1 States, after increasing from $4.5 million in 1960 to more than $7 million in 1961, fell back in 1962 to less than $6 million. This drop is attributed primarily to the liberalization of imports from Japan in December 1961. Major suppliers of photographic products to the United Kingdom in 1962 were West Germany, the United States, and Japan, in that order. Photographic equipment manufactured in the United States is con- sidered to be of similar quality to the products manufactured by U.S. subsidiaries in the United Kingdom and of similar or better quality compared with those imported from other countries. At the same time, the U.S. products are considered high-priced and tend to be noncom- petitive on this basis alone. Nonamateur photographic equipment is advertised in trade journals and in periodic exhibitions. The U.S. Trade Center Exhibit in London affords U.S. manufacturers an excellent opportunity to promote the sale of their products. There are no quantitative restrictions on U.K. imports of photo- graphic products. However, import duties for most classes of photo- graphic equipment are rather high and, because ad valorem rates are based on the c.i.f. values at U.K. port of entry, the U.S. exporter is at a disadvantage alongside European suppliers. This disadvantage is compounded in that applicable taxes and markups are based on the landed duty-paid value. Because of the high U.K. import duties and strong competition from cheaper goods made in other countries, some U.S. firms are con- sidering manufacturing partial or complete units in the United Kingdom. Competition from German and Japanese equipment exacts the best in U.S. know-how and ingenuity in the fields of production and marketing in order to sell in the U.K. market. Greater efforts are required in introducing new products and processes. Sales emphasis should be placed not only on newly developed items but on all advanced high- quality equipment and on prducts not otherwise available in the United Kingdom. DOMESTIC PRODUCTION According to data furnished by the British Board of Trade, the value of U.K. production of photographic equipment in 1962 amounted to $21.3 million (table 1). The figures exclude values of photographic lenses and reproduction equipment— estimated at $3.2 million and $8.5 million, respectively— yielding a total U.K. output of $33 million. A product breakdown is available for only the first quarters of 1962 and 1963 (table 2). The Board of Trade data do not distinguish between amateur and nonamateur items. The official U.K. Census of Productionfor 1958 shows that 26 firms employing 25 persons or more were producing photographic products; 16 were manufacturers of cameras and apparatus and 10 were pro- ducers of photographic materials. There are currently 40 member firms of the British Photographic Manufacturers' Association. Table l.— U.K. Production of Selected Photographic Products, 1960- 62 l (In thousands of dollars) Type 1960 1961 1962 Total 22,453 23 , 851 21 , 264 Motion picture cameras 2,626 5,513 6,846 7,468 3,097 5,334 7,199 8,221 1,985 4,597 7,829 Other photographic apparatus 6,853 x Data exclude photographic lenses, reproduction equipment, sensi- tized materials, paper, and chemicals. Value represents manufac- turers' shipments at net selling prices "ex works." Source: American Embassy, London, from British Board of Trade data. Table 2.— U.K. Production of Selected Photographic Products , January- March 1962 and 1963 * (In thousands of dollars) 2 Type January-March 1962 1963 Total 4 , 264 . 4 964.4 Cameras, complete and parts: Motion picture cameras: Standard (35-mm. ) gage Other 114.8 224.0 434.0 372.0 92.4 921.2 425.6 1 , 033 . 2 646.8 8.4 333.2 Still cameras: Box (excluding precision) Other 243.6 380.8 Projectors, complete and parts: Motion picture projectors with or without sound reproducing apparatus but excluding sound reproducing apparatus sold separately: Standard (35-mm. ) gage Other 338.8 1 036 . Projectors , other 504.0 Other apparatus, accessories, and parts: Motion picture (including screens, studio lighting and film processing equipment, editing equipment, and sound reproducing equipment sold separately) Other (including enlargers, reducers, ex- posure meters, and processing equipment)... \ 957.6 1,162.0 Excluding photographic lenses, reproduction equipment, sensitized materials, paper, and chemicals. 2 Value represents manufacturers' deliveries at net selling prices "ex works." Source: American Embassy, London, from British Board of Trade data, Still Cameras, Motion Picture Cameras, and Projection Equipment Production, by value, in 1960-62 is given in table 1. Quantity figures are not available. Trade sources indicate that for each of the three categories, 60-85 percent of U.K. production consisted of items for industrial, commercial, and/or professional use. U.S. subsidiaries and licensees of U.S. firms account for a minimal portion of total U.K. production of nonamateur motion- picture cameras, still cameras, and projectors. Reproduction Equipment (Photocopying, Blueprinting, Whiteprinting, and Microfilming) Official sources do not report separately statistics on the produc- tion, exports, and imports of photographic reproduction equipment. The Board of Trade classifies these items in a miscellaneous category of office equipment. Estimated U.K. production of photographic repro- duction equipment is $8.5 million for 1962; the estimate for 1957 is $5.6 million. Trade sources indicate that about 20,000 photocopying machines were sold or rented in the United Kingdom in the period 1960-62. Approximately two-thirds of these were imported; the remainder were of domestic manufacture, for the most part under U.S. license. An estimated 80 percent of microfilm equipment distributed in the United Kingdom is imported. EXPORTS U.K. exports of photographic equipment are fairly well dispersed. The four leading customers in 1962 were West Germany and France ($3 million each), Italy ($2.1 million), and the United States ($1.8 mil- lion). U.K. exports to Commonwealth countries and the Irish Republic as a group were valued at $2.2 million. Table 3 itemizes exports of selected products in 1962. Table 3.— U.K. Exports of Selected Photographic Products, by Type, 1962 Type Quantity (units) Value (thousands of dollars) Total Cameras: Motion picture cameras Other cameras: Box (excluding precision) Other Motion picture and other projection apparatus: Motion picture, with or without sound reproducing apparatus: Standard (35-mm. ) gage Other Still projectors Lenses and other optical elements, photo- graphic Other appliances (including sound reproducing apparatus) and parts (excluding chemicals, paper, and film): Motion picture Other, including photographic reproduction equipment 6,624 117,397 14,873 234 9,650 17,401 52,923 25 , 233 2,895 347 1,290 350 1,394 511 1,940 3,289 13,217 Source: data. American Embassy, London, from British Board of Trade DISTRIBUTION Methods of distributing photographic equipment in the United Kingdom vary according to the type of product. Nonamateur equipment and materials are sold for the most part direct to the end users (large industrial concerns, research bodies, hospitals) by the U.K. manu- facturers or, in the case of imported goods, by the importer/distrib- utors. Practically all amateur products plus some supplies for pro- fessional photographers are sold by the manufacturers or importer/ distributors to the retailers. There are 40 to 50 distributors of photographic equipment in the United Kingdom. Most of them are importer/distributors, but some are strictly wholesalers who distribute on a national basis for their own account or on behalf of a U.K. manufacturer. Retailing outlets, of which there are more than 23,000, consist of 4 main types that account for the following percents of retail sales: Unit retailers...., Multiple stores..., Department stores. , Cooperative stores Percent 76 17 4 3 There are approximately 700 specialist photographic retailers and some 2,500 photographic dealers/chemists (drug stores) and/or opticians who do 50 percent or more of their business in photographic goods. About 13,000 drug stores sell nontechnical items including film and inexpensive box cameras. The other 7,000 outlets are general shops whose photographic supply line is principally film. Multiple and variety chain stores account for approximately 25 percent of total retail sales. Their relative share is increasing. Because of the variations in import duties, agents' markups, and shipping costs, there is no general formula for deriving the retail price at which photographic products of U.S. Origin will sell in the United Kingdom. Beyond the wholesale level, domestic and imported photo- graphic products have about the same markup (purchase tax and re- tailer's markup). The wholesale price on imports would be the landed duty-paid value plus importer/distributor's markup. The U.K. import agent, who usually is also the distributor to the retail trade, is the logical point of contact for the U.S. exporter in the establishment of prices and the marketing of products. CONSUMPTION Apparent consumption in the United Kingdom of all photographic products (except sensitized materials, paper, and chemicals) was $4 1.3 million in 1962, a 55-percent increase over the 1957 level of $26.6 million (table 4). Three-fourths of the increase was attributed to the rise in net purchases from abroad. Table 4.— U.K. Consumption of Photographic Products, 1957 and 1962 (In millions of dollars) 1957 1962 Increase Production 29.3 10.4 33.0 33.5 3.7 Plus impor t s 23.1 Gross availabilities 39.7 13.1 66.5 25.2 26.8 Minus export s 12.1 Apparent consumption 26.6 41.3 14.7 Apparent consumption of cameras and projectors in 1962 was as follows (in millions of dollars): Motion- picture Still Projec- cameras cameras tors Total Production 2.0 4.6 7.8 14.4 Plus imports 6J3 7^3 '6.8 20.4 Gross availabilities 8.3 11.9 14.6 34.8 Minus exports, including reexport s 2 . 9 1 .6 2 .3 6 . 8 Apparent consumption 5.4 10.3 12.3 28.0 1 Includes sound apparatus sold separately and. is therefore slightly broader in coverage than the production and export data. According to the Board of Trade, slightly more than 25 percent ($540,000) of domestic production of motion picture cameras was ex- ported in 1962. The largest part of the total U.K. export value, $2.4 million, was accounted for by resales abroad of imported cameras. The imports retained in the country amounted to $3.9 million and represented 72 percent of apparent consumption. The other 28 per- cent, $1.5 million, represented domestically produced items. In the case of still cameras, 12 percent ($570,000) of U.K. produc- tion was exported and 88 percent ($4 million) sold domestically. Thus, U.K. production accounted for 39 percent of apparent consumption, and retained imports for 61 percent ($6.3 million). The proportion of U.K. production of projectors sold abroad amounted to 33 percent, $2.3 million. Imports, $6.8 million, constituted 55 percent of apparent consumption and domestic production, $5.5 million, 45 percent. Of the three categories combined, $3.4 million, or 26 percent of domestic production, was exported. The balance of output ($11.0 mil- lion) constituted 39 percent of apparent consumption and imports ($17 million), 61 percent. IMPORTS In the period 1960-62 U.K. imports of the photographic products under study increased sharply, from $26.6 million to $33.5 million. This trend was due partly to the liberalization of imports from Japan in December 1961 and the great influx of cheap products from Hong Kong. A U.K. dealer specializing in medium- and high-priced equipment reports that immediately after liberalization every other camera he sold was of Japanese origin and that even in early 1963 the proportion was still one in three. Another large retailer stated that an increasing proportion of his sales of still cameras were imported 35 -mm. models in the $50 to $100 range. Annual imports of motion picture cameras rose much more sharply than those of still cameras in 1960-62-from 45,000 to 120,000 units, or 160 percent. Still camera imports increased by only 13 percent, to 850,000 units. In terms of value, motion picture cameras increased by only about 60 percent, suggesting that these were primarily inex- pensive types . Of the total number of motion picture cameras imported in 1962, those from Japan accounted for a little less than 50 percent. Some U.K. retailers are able to sell highly sophisticated imported equipment at well under list prices because they are dealing direct with manufacturers and thus bypassing the importer and wholesaler. The rise in imports from Japan seems to have had an adverse ef- fect on the sales of both German and U.S. manufactured cameras. Two U. S. firms, selling in the middle and upper price range, made price reductions during 1962. Quantity and value figures for U.K. imports of selected photographic products by country of origin for 1960-62 are shown in table 5. The major suppliers were West Germany ($8.8 million), the United States ($5.9 million) and Japan ($5.0 million), which together accounted for 58 percent of U.K. purchases of foreign photographic equipment. Table 5.— U.K. Imports of Selected Photographic Products, by Major Country of Origin, 1960- 62 1 Country Quantity (units) Value (thousands of dollars) 1960 1961 1962 1960 1961 1962 26 , 576 31,939 33,453 48,300 61,275 118,883 Motion picture cameras: 2,710 3,263 4 771 United States Japan Switzerland West Germany Other 9.5 mm. or less, total... 10,757 2,362 11,677 11,229 12,275 4,678 17,023 9,064 6,921 6,676 21,591 2,327 15,808 44,191 11,367 16,923 30,594 1,560 459 85 1,023 455 688 143 859 372 643 437 952 116 547 1,479 893 831 1,021 69 United States Japan Other 371 1,851 2,456 711 471 1,153 703 372 n.a. 521 1,039 424 14 42 87 1,122 31 54 31 1,164 n.a. 31 38 Other , total 1 494 54 313 79 n.a. 265 261,708 53 70 69 n.a. 180 275 , 897 36 89 116 3 180 304,693 201 213 175 n.a. 533 4,684 183 246 218 n.a. 517 4,778 155 361 341 165 472 4,789 Commonwealth Countries and Irish Republic. . . Morocco Other Other Cameras: Miniature (35 mm. or less) , total n.a. 192,557 10,040 59,111 512,554 n.a. 166,531 17,302 92,064 484,800 3,072 109,980 52,868 138,773 542,015 n.a. 3,808 195 681 3,743 n.a. 3,452 302 1,024 2,965 53 2,352 1,125 1,259 2,504 West Germany Japan Other Other (including box) , total United States West Germany Japan Other 2,447 283,888 2,347 223,872 5,934 202,898 7,230 268,738 4,024 20,062 20,150 497,779 277 2,632 108 726 449 1,430 233 853- 498 854 345 807 See footnotes at end of table. Table 5. — U.K. Imports of Selected Photographic Products, by Major Country of Origin, 1960-62 x —Con. Quantity (units) Value (thousands of dollars) Country 1960 1961 1962 1960 1961 1962 Projectors and sound repro- 140,452 168,000 221,380 3,926 5,932 6,785 6,252 26,819 70,678 15,132 n.a. 21,571 1,082,689 12,577 24,638 53,278 33,200 n.a. 44,307 1,258,371 3,046 32,296 43,885 46,673 47,573 47,907 758,503 370 1,059 1,364 386 n.a. 747 1,807 936 1,049 1,848 562 n.a. 1,537 2,441 766 1,428 West Germany Australia Japan Other 1,291 816 706 1,778 Lenses and other optical 2,765 881,743 155,830 4,218 40,898 1,000,320 116,664 113,646 27,741 418,037 113,677 193,595 33,194 452 864 55 436 2,960 626 798 234 783 3,452 821 West Germany Japan Other Other photographic appli- ances and parts: 719 363 862 2,944 United States 1,188 332 378 1,062 5,481 1,480 318 480 1,174 7 , 828 896 446 424 Other 1,178 Other, total 2 7 332 United States 1,627 2,522 1,332 2,726 2,646 2,456 2,126 2 339 West Germany Other 2 867 1 Data exclude sensitized materials, paper, and chemicals. 2 Includes photographic reproduction equipment, n.a. — Not available. Source: Annual Statement of the Trade of the United Kingdom, Volume II, 1961 American Embassy, London, from British Board of Trade data. The United States accounted for an annual average of nearly 20 per- cent of U.K. imports of selected photographic products in 1960-62 (table 6). Following the liberalization of imports in late 1959, im- ports from the United States increased to $4.6 million in 1960, com- pared with less than $1 million in 1959. A further increase in 1961 brought the U.S. annual rate to a peak of $7.4 million, which constituted 23 percent of U.K. imports for the category. Thereafter, from 1961 to 1962, imports from the United States dropped by 20 percent to $5.9 million, owing largely to substantial decreases in motion picture cameras and projectors. The steady uptrend in U. S. photographic sales in the United Kingdom prior to 1962 paralleled the course of U.S. exports of these products to all countries. However, in 1962, total U.S. exports continued to in- crease, rising by 5 percent to $129 million, while U.S. exports to the United Kingdom declined. Table 6.— U.K. Imports of Selected Photographic Products, Total and From the United States, 1960- 62 1 (Value in thousands of dollars) 1960 1961 1962 Type Total value From U.S. Total value From U.S. Total value From U.S. Value Per- cent Value Per- cent Value Per- cent Total 25 , 576 4,588 17.9 31,939 7,374 23.1 33,453 5,862 17.5 Motion picture cameras Still cameras. . . Projectors Lenses 3,975 8,427 3,926 1,807 8,441 674 277 370 452 2,815 17.0 3.3 9.4 25.0 33.3 4,542 7,743 5,932 2,441 11,280 1,073 533 936 626 4,206 23.6 6.9 15.8 25.6 37.3 6,334 7,293 6,785 2,765 10,276 702 551 766 821 3,022 11.1 7.6 11.3 29.7 Other equipment 29.4 *Data exclude sensitized materials, paper, and chemicals. Source: Annual Statement of the Trade of the United Kingdom, Votume II, 1961; American Embassy, London, from British Board of Trade data. COMPETITIVE MARKET FACTORS U.S. products manufactured in the U.K. are for the most part close equivalents of their U.S. -produced counterparts in quality and work- manship, and they are packaged and labeled as in the United States. Most of the articles manufactured under U.S. license were at one time imported from the United States. As a market for them developed, their manufacture shifted from U.S. to U.S. /U.K. and then to U.K. Several U.S. subsidiaries manufacture most of their line in the United Kingdom. However, new products of the parent companies are first introduced to the U.K. market through direct importation. So as to maintain the reputation of the product if and when production is trans- ferred to the United Kingdom, the qualities and workmanship of the U.S. -manufactured product are usually upheld in the U.K. -produced counterpart. West German equipment enjoys a good reputation in the U.K. photo- graphic equipment trade, and a number of items have an advantage over U.S. makes on price alone. In general, U.S. photographic equipment is considered to be of good quality, but high priced. U.K. professional photographers maintain the highest possible standards and, whereas a number of them can afford high- class specialized equipment, price is usually the determining factor. The influx of Japanese products since the Anglo/Japanese Trade Agreement of December 1961 has had a general depressing effect on prices. The U.S. Trade Center Exhibition of photographic products held in London in the spring of 1962 elicited keen interest on the part of pro- fessional and commercial photographers and photo finishers, but some of them were disappointed that more products were not on display. Some of the trade visitors commented on the excellent functional qualities of the U.S. products but were critical of their finish. A black 10 tripod, though well made, was poorly finished with rough grinding marks showing prominently through the paint. Similar unfavorable remarks were made regarding other U.S. equipment, notably in contrast with competitive German items, which had better finishes, and Japanese items, which were lower priced. Viewers pointed out the importance of color in product choice by the U.K. consumer. For example, an expensive commercial camera in two- tone colors, brown and tan, did not appeal to the British consumers, who prefer black, grey, or possibly red. Black to these buyers de- notes quality, strength, and durability. In this case the agent proposed to manufacture the camera casing in the United Kingdom so he could finish it in the color he had reason to believe would be acceptable. SALES OUTLETS AND BUSINESS PRACTICES Many of the nonamateur photographic equipment sales are made by manufacturers (or their distributors) or in the case of imported goods by importer/distributors direct to the end users; relatively few prod- ucts are sold through wholesale dealers or retailers. Trade discounts are given on the basis of the manufacturers' and importers' retail list prices. There are 35 members of the Photographic Importers' Association. A comprehensive list of U.K. firms engaged in importing and distribut- ing photographic products can be purchased for $1.00 from any De- partment of Commerce Field Office or from the Bureau of Interna- tional Commerce, U.S. Department of Commerce, Washington, D.C., 20230. The title of the list is "Photographic Supplies Dealers -United Kingdom." The trade association for professional photographers is the Institute of British Photographers with a membership of approximately 2,200. Advertising methods for nonamateur equipment are essentially the same as in the United States, i.e., through trade journals. The prin- cipal journals are the British Journal of Photography , 24 Wellington Street, London, W.C. 2, and Record, a publication of The Institute of British Photographers, Ltd., 38 Bedford Square, London W.C. 1. The biennial Photokina exhibition at Cologne is the major Euro- pean equipment display. U.K. exhibitions include the Industrial Photo- graphic and Television Exhibition, sponsored by the Financial Times, which had its third show November 11- 16, 1963, at Earls Court, London; the International Photo- Cine Fair, primarily for amateurs but also attended by professionals, scheduled for May 13-19, 1965, at Olympia, London; the Photographic Convention, sponsored by the Institute of British Photographers, held in October 1962 and next scheduled for the spring of 1965. The credit allowance given to the trade by the manufacturer or distributor is 2 1/2 percent discount on a monthly settlement. Thus, the credit with discount can be applicable for from 2 to 6 weeks. Deliveries are made immediately from stock or within 5-7 days for special orders. Service and repair facilities for most types of photographic equip- ment are available in the United Kingdom, and repair parts are available for the popular lines. n The furnishing of repair services including making spare parts readily available should, of course, be an integral part of plans for U.S. firms introducing new lines in the United Kingdom. Some com- plaints have been registered in the trade concerning inadequate serv- icing facilities for certain types of imported equipment. Two U.S. manufacturers participating in the U.S. Trade Center Exhibition expressed concern over import costs. One manufactured a large cabinet- type slide projector used extensively by lecturers and specialists in the field of education, and the other produced a com- mercial camera. Both items were completely new and quite expensive. High duties made delivered price of the equipment on the U.K. market practically prohibitive. Both of the exhibitors learned that by importing the major com- ponents, building cabinets, and cases, as well as minor components, in the United Kingdom, then assembling the equipment, they could lower the prices to a point where a number of buyers would be actively interested. According to several photographic dealers, the best buying time for them was in March. A survey of some of the large retailers revealed the following buying time preferences: Cameras (still and motion Before Easter, in preparation for summer picture). season and, to a lesser extent, before Christmas. Enlargers Late summer, for autumn and winter dark- room activities. These products are pur- chased mostly by enthusiasts and photo club members. Sales have declined over the past 3 to 4 years owing to increasing popu- larity of color film. Slide projectors Late summer and before Christmas. Still projector sales have increased over the past few years and have more than offset falling enlarger sales. Motion picture projectors.. Before Easter. As the range of motion picture equipment for amateur use expands and selling prices fall, the appeal of home moviemaking has become more widespread, resulting in increased sales of projectors. The lowered cost of color film has also boosted sales inasmuch as no more equip- ment is needed to show color than mono- chrome pictures. Viewers, editors, and Late summer, for use in leisure winter similar accessories. evening hours. TARIFFS, NONTARIFF RESTRICTIONS, AND OTHER PRICING FACTORS On the basis of a given value f.o.b. U.S. port of shipment, there are five factors which should be taken into consideration in deriving the retail price at which U.S. -origin photographic products will sell in the 12 United Kingdom. These are: shipping costs to the United Kingdom, U.K. import duty, importer's markup, U.K. purchase tax, and retailer's margin. Shipping Costs Shipping costs vary, of course, in accordance with quantity, value, size, and method of transport. One British importer offering a con- siderable volume and variety of photographic equipment estimates average shipping costs from the United States at a range of 2 to 5 percent. Import Duty The U.K. photographic industry is protected by a rather high level of import duties for most categories of equipment. The rates, ranging from 15 to 50 percent ad valorem, are based on the c.i.f. values at U.K. port of entry. In this respect, U.S. exporters are at a disadvantage in the U.K. market compared with European suppliers, because of higher U.S. transportation costs. There are no quantitative restrictions on U.K. imports of photo- graphic equipment from the United States. Importer's Markup In addition to transportation costs and import duties, imports of photographic equipment are at a further disadvantage relative to domestically produced items in that the U.K. manufacturer in many instances bypasses the wholesaler and distributes direct to the retail outlets. In the case of a considerable volume of the commercial, pro- fessional, and scientific photographic equipment, the manufacturer sells direct to the end user. Importers of photographic equipment are usually also distributors to the retail trade (or end user). The im- porter/distributor' s markup may be as low as 20 or as high as 40 per- cent, but it is normally 30 to 35 percent of the landed duty-paid value (c.i.f. value at U.K. port of entry plus import duty). The value of the product including the markup represents the wholesale price. (If the importer is not a distributor, his markup is less, and a wholesaler is used. The wholesaler's markup is about 25 percent.) U.K. Purchase Tax Certain categories of photographic equipment sold in the United Kingdom are subject to a purchase tax. The tax is applied regardless of the origin of the products and, therefore, does not discriminate against U.S. items. However, the tax is based on the wholesale price, which in the case of imports is the landed duty-paid value plus im- porter/distributor's markup and, if a wholesaler is used, his markup as well. The basic rate, where applicable, is 25 percent plus a special 10-percent surcharge on that rate-making a total levy of 27.5 percent. Retailer's Margin The retailer's markup is generally 50 percent (43 percent for film), based on the wholesale price before purchase tax. Thus, in the case of an item with a wholesale price of $100 (subject to a purchase tax of 13 $27.50), the retailer's markup would be $50, and the retail selling price would be $150 plus $27.50 or $177.50. Information on U.K. import duties on photographic equipment and materials and applicable taxes or surcharges is available from the British Commonwealth Division, Bureau of International Commerce, U.S. Department of Commerce, Washington, D.C., 20230. EXPORT POTENTIAL FOR U.S. PRODUCTS Despite the overall sales decrease in 1962, U.S. photographic equip- ment has a solid foothold in the U.K. market, particularly in the cate- gories of lenses, photographic processing and finishing equipment, photocopying and microfilming apparatus, studio equipment, and other miscellaneous noncamera or nonprojector items. In 1962, these prod- ucts combined accounted for $3.8 million, or two- thirds of U.S. exports of photographic equipment to the United Kingdom, and constituted 30 percent of U.K. foreign purchases of these items. U.K. purchases of cameras and projectors from the United States in 1962 were valued at $2 million and accounted for only 10 percent of total U.K. imports of these items. In view of the competition from Switzerland and more recently Hong Kong in the field of amateur equipment on the basis of lower prices, the best prospects for an expansion in U.S. exports to the U.K. lie in the nonamateur camera and equipment field, with particular emphasis on newly developed items and products not available on the U.K. market. Advanced, high-quality items can obtain a portion of the U.K. commercial and industrial market regardless of price. Greater efforts on the part of U.S. industry toward introducing new products and processes would doubtless be productive over the short as well as long range. With the U.K. economy making an impressive recovery from the slump of 1962, there are good prospects for an increase of U.S. ex- ports to the United Kingdom. The recovery was spurred by a sub- stantial increase in exports which accounted for about half of the rise in industrial production. Imports were also up, reflecting the in- creased industrial activity and the general mood of optimism in the domestic business community. There was a spurt in consumer ex- penditures, particularly for durables, stimulated by reductions in the purchase tax. During the 1962 U.S. Trade Center Exhibition, several importers commented that they knew very little about U.S. products and that what they did know was the result of their own investigations. Thus, U.S. manufacturers would be well advised to distribute information about their products among U.K. importers as one of the best means of obtaining positive results. Also well worth while is participation in the 1965 Industrial Photographic and Television Exhibition (organized by Industrial and Trade Fairs Ltd., Commonwealth House, 1-19 New Ox- ford Street, London, W.C. 1) and the International Photo- Cine Fair scheduled for May 13-19, 1965 (organized by British Organizers Ltd., 52 Grafton Way, London, W. 1), and subsequent events. In addition to the promising market described for industrial, com- mercial, and professional items, the outlook seems good for advanced 14 high-quality equipment, whether nonamateur or amateur, co obtain a share of the U.K. market through an effective promotion campaign. The following program is recommended as a means of promoting the sale of all types of U.S. photographic equipment: 1. U.S. Trade Center Exhibit.—P articipationby U.S. manufacturers in the next exhibit, probably to be held in the Fall of 1965. 2. Participation in U.K. Exhibitions.— The International Photo- Cine Fair emphasizes amateur equipment, and the Industrial Photographic and Television Exhibition is almost exclusively nonamateur. 3. Direct Contact.— U.S. manufacturers of photographic equipment should correspond direct with the members of the Photographic Im- porters' Association providing descriptive literature and price infor- mation on new products. This communication should be maintained on a continuing basis. The U.S. photographic products industry should find it beneficial to send one or two representatives with an intimate knowledge of U.S. products to meet with trade representatives and to make a first-hand study of the market. 15 Part II. — France SUMMARY ANALYSIS The rapidly expanding market for photographic equipment in France offers U.S. manufacturers unprecedented opportunities to sell their products. These opportunities lie in both the amateur and nonamateur areas and include in particular still and motion picture cameras, and reproduction equipment. Expenditures for photographic equipment in France in 1962 were eight times the amount spent in 1950. Spending for these products is expected to increase substan- tially, especially through the efforts of the photographic industry to create a greater interest in photography among the younger genera- tion. The French economy, which is very strong, augurs well for the future of U.S. exports to France. Gross national product is currently increasing at the rate of more than 4 percent a year, and all indica- tions point to a continued high rate of economic growth, with full employment. The French photographic industry is characterized by small or medium size manufacturers, heavily concentrated in the Paris area. The manufacturers meet about 60 percent of the domestic demand for all types of photographic equipment and export between 10 and 20 percent of their output. U.S. subsidiaries or licensees account for a large portion of domestic production and are the unquestioned leaders in the manufacture of reproduction equipment. The value of French production of cameras, projection, and re- production equipment increased from $33.2 million in 1960 to $36.5 million in 1962. Exports of these products totaled $5.2 million in 1962. In France, photographic products are usually distributed direct from the manufacturer to the retailer. Wholesalers are used in some cases, especially by foreign firms selling their products in the French market. Apparent French consumption of the main photographic categories of cameras, projectors, and reproduction equipment increased by 44 percent in 1960-62, to $49.7 million from $34.5 million. Imports accounted for almost all of the increase. The value of French imports of all categories of photographic products increased from $13 million in 1960 to $37 million in 1962 and more than $45 million in 1963. The unusually large growth is attributable to the general removal of import quota restrictions at the end of 1960. West Germany, France's leading supplier of photo- graphic products, accounted for $15 million of imports in 1962. The United States was second with $6 million, or 16 percent of the import market. 17 Equipment represented 66.5 percent and sensitized goods 33.5 percent of the imports in 1963, approximately the same proportion as in 1962. Imports of still cameras totaled $7 million in 1962, of which West Germany, the number one supplier, accounted for 80 percent. In the same year, the United States supplied 37 percent of the $3.4 million imports of movie cameras, and the United Kingdom supplied 33 percent of the $4 million imports of photocopy apparatus. U.S. photographic products manufactured in the United States or in France compare very favorably in quality with products manufac- tured in France or imported from third countries. Furthermore, U.S. types are often more advanced than the domestic or other im- ported items as far as ease of operation and practical innovations are concerned. Credit, delivery terms, and marketing and advertising methods in France are about the same for domestic manufacturers and im- porters. Service and repair facilities also appear to present no problems. French customs duties on photographic products range from 13 to 21 percent ad valorem. There is an added value tax of 25 percent and a stamp tax of 2 percent, neither of which discriminates against the United States. There are no quantitative restrictions on U.S. photographic products, and no import licenses are required. There is every indication that France offers a rapidly expanding market for photographic products and that a concerted effort on the part of U.S. manufacturers would produce significant results. DOMESTIC PRODUCTION The French photographic industry is composed largely of small or medium size specialized manufacturers. Approximately 80 firms with about 6,000 employees acccount for the production of the in- dustry. For the most part the industry is concentrated (about 90 percent), in the Paris area, where the headquarters remain despite a tendency by producers to transfer to or begin operations in other parts of the country. Some firms manufacture their own brands, and others have their brands produced by subcontractors. Most specialize in a single line of products. Domestic production of cameras, and projection and reproduction equipment is shown in table 7. Table 7.— French Production of Selected Photographic Equipment, 1960-62 (In millions of dollars) Type ! 1960 1961 1962 Total 33.2 34.3 36.5 Motion picture cameras 12.5 15.4 3.2 2.1 11.8 17.0 3.5 2.0 11.1 Still picture equipment Projection equipment Reproduction equipment 19.0 4.1 2.3 18 The French Government attributed the decline in production of motion picture equipment in 1960-62 to mounting competition from foreign suppliers, particularly German and Japanese. Total con- sumption continued to rise, however. The French photographic trade association stated that French manufacturers meet about 60 percent of the domestic demand for all types of photographic equipment. They also stated that some 10-20 percent of the photographic equipment manufactured in France is exported. No figures are available on the extent to which domestic produc- tion is accounted for by U.S. subsidiaries or licensees, but it is known that these manufacturing entities furnish a considerable por- tion of what is classified as domestic production. Three prominent U.S. firms are important local producers of photographic equipment for the domestic market. U.S. subsidiaries or licensees contribute to the total output of all categories of photographic goods, but are unquestionably the leaders in the manufacture of reproduction equip- ment. EXPORTS French exports of all photographic products have been increasing during the past several years, but at a very slow pace. Export ship- ments were valued at $31.7 million in 1963, compared with $30.5 million in 1962, $29.3 million in 1961, and $26.2 million in 1960. In 1963 they consisted of 63 percent sensitized goods and 37 percent equipment, compared with 57 and 43 percent, respectively, in 1962. The export leaders among the sensitized goods in 1963 were roll film, color, perforated, $6.5 million; sensitized photographic paper, $4.3 million; roll film, black and white, perforated, $2.4 million; X-ray film, $2.3 million; roll film, black and white, unperforated, $1.8 million; and cut and sheet film, black and white, $1.8 million. This group increased 16.3 percent over 1962 levels. France's leading export item was photographic lenses, which, however, dropped to $3,187,651 from $4,119,473 in 1962. Shipments of 16-mm. motion picture film increased sharply, to $1,378,138 from $864,097 in 1962. Exports of equipment and accessories for motion picture labora- tories totaled $1,450,000 in 1963, down slightly from $1,471,400 in 1962. 19 Table 8.— French Exports of Selected Photographic Products, 1960-62 (Value in thousands of dollars) Type 1960 1961 1962 Photographic lenses Cameras , aerial Cameras, automatic developing Cameras, still, other Motion picture cameras, aerial . Motion picture cameras, 35 mm. and over Motion picture cameras, 16 mm Motion picture cameras, 8 mm Motion picture projectors, 35 mm. and over... Motion picture projectors, 16 mm Motion picture projectors, 8 mm Still projectors, enlargers, and reducers.... Photocopy apparatus 2,042 17 C 1 ) 480 14 587 480 ( 2 ) 144 499 ( 3 ) 496 710 2,819 65 3 666 24 425 204 546 96 468 164 572 968 4,119 24 34 602 20 944 489 551 64 864 162 531 953 x Not reported. 2 Included with 16-mm. motion picture cameras. 3 Included with 16-mm. motion picture projectors. Source: Statistiques du Commerce Exterieur, 1960-62. DISTRIBUTION There are two principal channels of distribution in France for photographic products. The first and most common is direct from manufacturer to retailer through the manufacturer's salesmen. The other important method is from manufacturer to wholesaler to re- tailer. In addition, there are about 50 importer/ wholesalers through whom foreign firms can sell their photographic products in France. Of the 12,000 retail outlets, 5,000 to 6,000 are true specialists and the others are principally portrait studio photographers (about 2,000), book sellers, and druggists. There are in France about 150 commercial photographers and 50 illustrative photographers, plus approximately 300 amateur cam- era clubs. France's foreign trade and wholesale distribution are largely funneled through Paris, where 32 percent of the country's commer- cial establishments are located. The major ports and provincial towns are secondary centers for trade in the products of the respec- tive regions. Marseilles is the chief port for Mediterranean trade and Le Havre for transatlantic goods. In the commercial field, there are numerous small establishments with a very limited turnover. The great majority of retail outlets employ only one or two salaried workers. In the past few years, considerable effort has been made to modernize the distribution sys- tem and improve warehousing facilities. 20 CONSUMPTION Apparent French consumption of cameras, projectors, and repro- duction equipment was $49.7 million in 1962, a substantial increase of 18 percent from 1961 and 44 percent from 1960 (table 9). Table 9.— French Consumption of Cameras, Projectors, and Reproduc- tion Equipment, 1960-62 (In millions of dollars) 1960 1961 1962 Production 33.2 4.7 34.3 12.1 36 5 Imports 18.4 Gross availabilities 37.9 3.4 46.4 4.2 54.9 Export s 5.2 Apparent consumption 34.5 42.2 49.7 Increases in French consumption of these main categories of photographic products for 1961 and 1962 paralleled increases in im- ports in the same years. Not only have imports increased in abso- lute value, but they have increased substantially in relation to total consumption, accounting for 37 percent in 1962 compared to only 14 percent in 1960. IMPORTS French imports of photographic products increased 22.5 percent in 1963 over 1962 levels, from $37.1 million to $45.4 million. Equip- ment made up 66.5 percent of the 1963 total and sensitized goods 33.5 percent, approximating the 1962 proportion. The substantial growth of French imports in recent years is due primarily to the general removal of import quota restrictions at the end of 1960. Still cameras continue to be the leading import item, totaling $7,996,963 in 1963, an increase of 26.4 percent over 1962 totals. The largest gain was recorded by photocopy equipment, which made a sharp gain of 87.3 percent, from $3,960,446 to $7,419,635. Pur- chases of sensitized paper totaled $3,248,988, an increase of 13.6 percent over 1962 levels. Imports of 8- mm. movie cameras and projectors continued their upward trend, the former increasing by 14.3 percent and the latter by more than 50 percent in the year. West Germany, the principal supplier of photographic products to France, accounted for $15.1 million, or 41.0 percent of total imports, in 1962 compared with $11.7 million (46.8 percent) in 1961. The United States is the second largest supplier, followed by Belgium, the United Kingdom, and Italy (table 10). 21 In 1962, the leading French photographic products imports were still picture cameras which (other than aerial and the automatic de- veloping types) totaled $6.3 million, an increase of 26.2 percent over 1961. West Germany supplied 86.5 percent, the United States 3.1 percent, and Japan 2.4 percent. Imports of photocopy apparatus increased from $1.9 million in 1961 to $4.0 million in 1962. Purchases from the United Kingdom in 1962 totaled $1.3 million, a fivefold increase over 1961 levels. Other suppliers were West Germany, the United States, Netherlands, and Switzerland. Table 10.— Principal Suppliers of Photographic Products to France, 1961 and 1962 (Value in millions of dollars) Country 1961 Value Percent of total 1962 Value Percent of total Total West Germany. . . United States. . Belgium United Kingdom. Italy Other countries 25.0 100 37.1 100 11.7 3.5 2.8 1.4 1.3 4.3 47 14 11 6 5 17 15.1 6.0 3.3 2.8 2.6 7.3 41 16 9 8 7 19 Source: Statistiques du Commerce Exterieur, 1961 and 1962. Imports of 8-mm. motion picture cameras increased from $1.5 million in 1961 to $2.5 million in 1962. Purchases from the United States, the leading supplier, almost doubled in the period. Total French imports of 8-mm. motion picture projectors also increased sharply. Austria and West Germany combined accounted for 63 percent of the total dollar volume in 1962. In the sensitized, unexposed, photographic film categories, ex- ceptionally large increases were recorded in the imports of black and white roll film, perforated and unperforated, in black and white cut and sheet film, and in X-ray film. Purchases from other countries of sensitized photographic paper totaled $2.9 million in 1962, an increase of 24 percent over 1961. West Germany remained the leading supplier, despite a 16- percent decrease in imports from that source in 1961-62. Imports from the United States more than tripled in the same period, while Belgium and the Netherlands increased their sales by 23 percent and 90 per- cent, respectively. Table 11 shows the value of French Imports of major photographic products and the value of the U.S. share for each of these items. 22 Table 11.— French Imports of Selected Photographic Products, Total and From the United States , 1960-62 (Value in thousands of dollars) 1960 Total From U.S. 1961 Total From U.S. 1962 Total From U.S. Still picture cameras: Aerial Cameras, automatic develop- ing Other Motion picture cameras: Aerial 35 mm. and over 16 mm 8 mm Photocopy apparatus. Photof lash equipment Photographic laboratory equipment Motion picture projectors: 35 mm. and over 16 mm 8 mm Still projectors, enlargers, reducers Photographic lenses Photographic plates, glass.... Cut and sheet film, black and white Cut and sheet film, color X-ray film, other than roll... Roll film, unexposed: Black and white, unper- forated Color, unperf orated X-ray, unperf orated Black and white, per- forated Color, perforated Sensitized photographic paper 12 148 1,114 51 114 712 C) 950 403 490 284 328 C 1 ) 960 140 92 776 203 654 861 203 11 1,088 521 O) 68 78 36 42 128 C 1 ) 97 387 180 42 23 C 1 ) 338 22 C 1 ) 120 176 C 1 ) 21 23 C 1 ) ( l ) C 1 ) 1,369 O) 35 452 5,011 18 226 198 1,519 1,927 434 820 331 127 929 1,332 805 95 1,380 215 814 1,047 317 58 1,536 967 2,312 C) 126 61 15 181 128 468 336 14 362 13 13 45 368 37 11 194 143 39 66 11 ( 2 ) 30 295 213 148 519 6,325 60 310 515 2,531 3,960 720 1,378 324 280 1,403 1,973 1,282 97 1,788 349 1,321 1,363 301 395 1,942 1,113 2,861 C 1 ) 190 198 43 98 210 904 702 19 576 23 24 60 576 114 ( 2 ) 318 276 65 82 26 ( 2 ) 64 152 763 *Not reported separately. 2 Less than $10,000, if any. Source: Statistiques du Commerce Exterieur. Official U.S. statistics show an increase in the period 1961-62 of 71 percent in U.S. exports of all types of photographic products to France compared with only 5 percent in such exports to all countries. COMPETITIVE MARKET FACTORS U.S. photographic products, including those manufactured in France by U.S. subsidiaries and licensees, compare favorably with merchandise of French origin and that imported fromotjaer countries. About 17 percent of all the photographic equipment imported into France comes from the United States. The United States is second only to Germany among the countries from which France purchases in this field. That U.S. manufacturers are able to hold this market, and especially remain well ahead of the Japanese (now eighth largest supplier) is a good indication that U.S. goods are competitive. U.S. equipment seems to be as good as and in some instances superior to the output of competitors in terms of styling, quality, workmanship, packaging, and labeling. The workmanship and quality of U.S. goods tends to be superior to the Japanese products which, however, can usually be purchased for slightly less. The quality and workmanship of some of the very expensive equipment originating in Germany is excellent, but the United States does not supply to this market a significant portion of the equipment falling in this category, so an actual comparison is difficult to make. With respect to ease of operation and the incorporation of practi- cal innovations, U.S. items are usually far ahead of domestic prod- ucts or imports from other countries. The exact prices on the French market for similar pieces of equipment manufactured in various other countries are not obtain- able. Until recently there was a "prix impose," or minimum price, fixed by the manufacturer, below which the retailer could not sell. It is believed that these price arrangements are no longer in effect. The industry's trade association, as well as wholesale and retail houses, have indicated that the prices for like items are about the same. These sources also stated that they were in a position to modify price schedules to meet the prices charged for competitive items. French manufacturers and U.S. subsidiaries apparently think that they can withstand and overcome any challenge from Japan. At pres- ent an agreement between France and Japan limits the importation of Japanese cameras. Only $200,000 worth can enter France each year. This restriction is not applicable to other categories of photo- graphic equipment manufactured in Japan. SALES OUTLETS AND BUSINESS PRACTICES A current U.S. Department of Commerce "Trade List" identifies and describes the French firms engaged in importing and wholesaling photographic products. The list, "Photographic Supplies Dealers and Photographers -France," can be purchased for $1.00 from any Department of Commerce Field Office or from the Bureau of Inter- national Commerce, U.S. Department of Commerce, Washington, D.C., 20230. 24 Both Government and trade association sources have indicated that similar credit and delivery terms are granted by companies in all of the countries from which France imports as well as by do- mestic producers, and that credit is readily available to reputable firms. The purchaser is influenced largely by special features and personal tastes. The marketing and advertising methods of domestic producers ap- pear to be about the same as those used by U.S. manufacturers. One is less conscious of advertising as a medium in France than in the United States as there are few billboards and no commercial televi- sion. Advertisements on posters, in newspapers, and in the movie theaters are not markedly different for domestic equipment than for U.S. or U.S. -subsidiary or licensee equipment, and these media are not widely used in any case. The most commonly used advertising media in France are trade magazines, technical journals, newspapers, and other periodicals. There are no major problems or factors involved in trading with France. This is a good market for U.S. products, and trade pro- cedures between the countries are well established. U.S. firms sell- ing in the French market do not face currency exchange problems. French importers prefer quotations c.i.f. French ports. They are accustomed to buying U.S. goods for payment against documents, al- though exporters in other countries often quote "free delivered, duty- paid" prices and frequently offer extended credit. Goods can- not be consigned "to order" on French railroads, but must be con- signed direct to a consignee. For a nominal fee, French railways will collect on c.o.d. freight shipments and remit the money to the shipper. The usual French business hours are from 9:00 a.m. to 12 noon and from 2:00 to 6:00 p.m. During August, most establishments close for 3 to 4 weeks to allow for paid vacations. French is preferred as the language of correspondence and is likely to bring a more prompt answer from firms with which U.S. manufacturers have had no previous relations. After contacts have been established, correspondence can in many cases be carried on in English. The metric system of weights and measures is used exclusively. Photographic products and accessories of all types are exhibited at the Salon National Photographique, Cinematographique et Optique. This exposition is the major vertical fair in France and brings to- gether all aspects of the industry. It is national rather than interna- tional, therefore U.S. firms that wish to participate, other than those having French licensees or subsidiaries, must do so through import agents. Horizontal trade fairs usually feature only a few exhibits in the field of photography. The sale of U.S. products is not hampered by a lack of service fa- cilities or because of any difficulty in replacing parts. The U.S. companies that are important in the photographic field in France have set up French subsidiaries or licensees and have a complete line of facilities. Items that are either manufactured or assembled in France can be serviced as easily as in the United States. 25 TARIFFS AND NONTARIFF RESTRICTIONS Customs duties on photographic supplies were lowered in July 1963, and now range from 13.2 to 21 percent ad valorem. In addition, there is an added value tax of 25 percent and a stamp tax of 2 per- cent, neither of which discriminates against the United States. All photographic products can be imported from the United States into France without quantitative restrictions. No import licenses are required. The only existing restriction applies to imports of cameras from Japan. Inasmuch as France is a member of the European Economic Com- munity (EEC), countries within the EEC supplying photographic prod- ucts to France have a decided tariff advantage over the United States and other nonmember countries. Rates of duty on imports from EEC countries now range from zero on some photographic items to 10 percent ad valorem on others. Eventually, all duties within the EEC will be eliminated. EXPORT POTENTIAL FOR U.S. PRODUCTS The market for photographic products in France is rapidly ex- panding, offering U.S. manufacturers significant sales opportunities. In addition to the sales potential in nonamateur equipment, excellent opportunities are available in two other areas. The first is in con- sumer cameras and projection equipment. Keen and growing interest is evident in taking pictures with both still and motion picture cam- eras. At present, only one in six Frenchmen owns a camera, and most of the camera owners are concentrated in the 18-30 year age bracket. If the French market follows the pattern in other countries, interest in photography is sure to increase. Eight times more money was spent for photographic equipment in 1962 than in 1950. Those presently owning such equipment are likely to buy additional items, probably of a more sophisticated level. It is to these buyers that the middle- price range, easy- to- operate U.S. goods will appeal. The second area of opportunity is in reproduction equipment using a photographic process. One U.S. photographic product manufacturer is reportedly doing 5 to 10 percent of his French business in this type of equipment, and two other prominent U.S. firms have recently en- tered the French market. The U.S. firms participating in this rela- tively new sector of the photographic field are doing well, but the saturation point is nowhere within range. Contributing to a viable French market in photographic goods is a strong national economy. Gross national product is increasing at more than 4 percent annually in terms of constant prices, and all in- dications point to a continued high rate of economic growth with full employment. Per capita income in 1962 was $1,230, about half the average in the United States, but high by the standards of the rest of the world. There is a growing demand for consumer goods brought about by a 1963 spring/summer upturn in the economy. U.S. exporters shipped 10 percent more merchandise of all types to France in the first half of 1963 than they did in the comparable period in 1962, maintaining the U.S. position as second largest supplier after West Germany. 26 The increasing interest in still photography and moving picture making in France has been intensified through the use of color film and low-priced equipment. This trend has been largely attributable to the industry's efforts to engage the members of the younger gen- eration. Competitions in photography have been organized by many of the academies throughout France, in which cameras are loaned to young people and their film developed free of charge. The market for all types of photographic equipment, both com- mercial and consumer types, has good growth potential. Strong, well-planned promotion on the part of U.S. manufacturers can be ex- pected to produce favorable results. 27 ■it U. S. GOVERNMENT PRINTING OFFICE : 1964 O - 743-682 PENN STATE UNIVERSITY LIBRARIES ADDQD71EflflDS5