The majority of opticians in Portugal do not, as yet, practice any form of competitive pricing. You will quickly find that in the majority of cases, prices are very similar, whichever optician you choose. There is also the interesting practice in Portugal of charging per lens. The origin of that practice is hard to establish.

You only have to browse through the many expat residents sites to find how many people complain about the price of glasses in Portugal. What they don’t seem to take into consideration is that if they are from the UK, that they have moved from a highly competitive opticians’ market with many companies vying for their business into a market with little, if any competition.

The lenses in your glasses are almost certainly made by Essilor, a French multinational that controls almost half of the world’s prescription lens business and has acquired more than 250 other companies in the past 20 years. It’s also highly likely that your frames are made by Luxottica, an Italian company with an unparalleled combination of factories, designer labels and retail outlets. In Portugal they are dominant, as far as I could establish, they are the only lens manufacturers established here.

Little or no competition

When did you last see a Portuguese opticians advertising competitive prices, discounts or special offers? This is not a competitive market.

One significant reason that eyeglasses cost so much is because the lens manufacturer EssilorLuxottica is so dominant in this market that they can essentially set its price in Portugal, and elsewhere, without the true forces of free market competition to balance the scales. We all know Ray-Ban, Prada, Oakley, Michael Kors as well as Essilor, the inventors of progressive lenses. But did you know that they are owned by just one company, called EssilorLuxottica? The two companies merged in 2018. Luxottica may not ring a bell immediately, but they are a force to be reckoned with. They had an impressive revenue of €9.4 billion in 2019. How did this eye manufacturer become so large that it owns nearly all of the top luxury eyewear brands and generates millions of dollars in revenue?

Is this a monopoly?

In order to properly place EssilorLuxottica into context, we need to define what a monopoly is. We all know what a monopoly is, but what does it truly stand for? Britannica describes a monopoly as follows, ‘A monopoly implies an exclusive possession of a market by a supplier of a product or a service for which there is no substitute. In this situation, the supplier is able to determine the price of the product without fear of competition from other sources or through substitute products.’

I am aware of one Algarve based optician that by passes the Essilor virtual ‘monopoly’ in Portugal by buying Essilor lenses from another EU country with greater competition. This enabled them to offer substantially more competitive prices while still offering the Essilor Varifocal lenses. As the inventors of this lens, they have what is considered to be the most advanced varifocal lens.

Why not buy from your home country?

Many expats buy their glasses from their home country. If that’s the UK, prices are at least half for the same make and model of lens. It’s a highly competitive market. There are, however, problems. If you need a single focus lens you can get an eye test here (not easy if you don’t plan to buy glasses form the optician, but possible). This can be sent to your chosen optician abroad and they can supply without difficulty (except by post from the UK). There are many online companies that will do this at a fraction of the price you would be charged in Portugal. The problem comes when you need varifocal lenses. These need careful measurement from a skilled optician as they have to measure various points on the lens in order to get the location of the variable prescriptions correct. To buy these online would be very unwise.

Charles Dahan, a former eye industry executive said in an interview with the Los Angeles Times, ““There is no competition in the industry, not anymore,” he said. “Luxottica bought everyone. They set whatever prices they please.” https://www.latimes.com/business/lazarus/la-fi-lazarus-glasses-lenscrafters-luxottica-monopoly-20190305-story.html

One giant company dominates how the world sees

The Guardian recently reported, in an article by Sam Knight: “How one giant company will dominate the way the whole world sees”. “Optical retailers learned the strange fact that for something that costs only a few pounds to make (even top-of-the-range frames and lenses cost, combined, no more than about £30 to produce), we are happy, happier in fact, when paying 10 or 20 times that amount. “The margins,” as one veteran of the sector told me carefully, “are outrageous.” https://www.theguardian.com/news/2018/may/10/the-invisible-power-of-big-glasses-eyewear-industry-essilor-luxottica

It needs to be pointed out that it’s not fair to blame your optician, especially in Portugal, they have little choice but to pay what the manufacturer charges.

Buying power

The UK market leaders, Specsavers, are so large, and with such a large buying power, that they can bypass EssilorLuxottica. Specsavers have worldwide expansion plans and are already open in ten other countries, outside the UK, including Australia, Canada New Zealand, and seven EU countries. In Spain they are already in Benidorm , Calpe , Fuengirola , Guardamar del Segura, Jávea , Mallorca , Marbella , Torrevieja and La Zenia Would they be tempted to expand over the border into Portugal, that’s anyone’s guess, but probably the market would be too small for them. However, Specsavers is a type of franchise, they call it a partnership. Perhaps one of the shops or groups might decide to challenge the market in Portugal, there is little doubt they would attract a lot of clients. It’s working in Spain.

Specsavers resolved the market domination of EssilorLuxottica by establishing their own lens manufacturing laboratories - three of the largest in Europe – they claim, to provide high-tech lenses at very low cost. They also claim to have 1,500 opticians around the world, that’s a buying power that few, if any, could match.

Don’t blame your optician

Meanwhile your optician in Portugal has little, if any, choice of where they source your lenses and frames. They pay a hefty premium in Portugal, but that’s the result of no competition in lens manufacture here. Competition must surely come, but don’t hold your breath, Portugal is probably too small a market to tempt a challenge to EssilorLuxottica.

Author

Resident in Portugal for 50 years, publishing and writing about Portugal since 1977. Privileged to have seen, firsthand, Portugal progress from a dictatorship (1974) into a stable democracy. 

Paul Luckman