INDUSTRY
How have restrictions on parallel imports worked to protect the Australian book industry?
Bridget Mahy, Holly McPherson and Melissa Taylor
In 2009 and as recently as 2016, parallel import restrictions (PIRs) have been reviewed by the Australian Government’s Productivity Commission with the view that they increase book prices for consumers. There has been significant debate about this issue with Australian booksellers, publishers and even authors weighing in about whether PIRs should be removed in favour of a freer market.
PIRs are tied to copyright law and are territory-specific, existing to protect the rights of the publishing industry to legally reproduce books from overseas for domestic sale, and to prevent their work from being published elsewhere without permission or compensation. This also allows Australian authors to sell the rights to their work for distribution overseas without that version being imported back into Australia and sold at a cheaper price, which can result in the author, their agent and their publisher receiving no revenue for their own work. In Australia, the rights to reproduce a book are bought by local publishers from the copyright holder, which gives them the license to produce an Australian edition.
Since the introduction of PIRs, republishing foreign works as Australian editions has provided a major source of revenue for publishers in Australia, particularly for larger multinational publishers who have the connections and resources to buy these rights. According to the Australian Society of Authors in their 2008 submission to Parliament House, 60% of the titles sold domestically were Australian-produced editions of foreign titles.
The market was first closed with a wholesale ban on parallel imports (PIs) in the Copyright Act 1968, and since then there has been a gradual loosening of the laws in order to improve the availability of books and decrease costs for consumers. A flashpoint in the law’s development was the introduction of the 30/90-day rule in 1991 which dictate the service requirements publishers have to follow. For a publisher’s title to be protected by PIRs, it must be available in Australia within 30 days of the title being published overseas, and if a bookseller requests the title, the order must be fulfilled by the publisher within 90 days. In 2001, the proposition to deregulate further was brought to Parliament. This led only to the exclusion of electronic material from PI law, enshrined in the Copyright (Parallel Importation) Act 2003, which codified an existing, unenforceable dynamic in the world market.
While Australia’s history with PIRs has been heavily documented by both academics and government institutions, we found a lack of direct comparison between Australian legislation and that of overseas markets. With the possibility of Australia’s PIR laws being scrapped entirely in the near future, it is more important than ever to understand the benefits and consequences of PIRs on a nation’s publishing industry.
Why did we choose these case studies?
Canada, New Zealand (NZ) and the United Kingdom (UK) contain English-language markets most relevant to Australia’s context. As it stands, English-language books form the largest product pool in the international publishing industry. There are other points of comparison too. For example, Canada’s bookselling market is a similar size to Australia’s and (in addition to having a shared history of being a settler colony) established its book market largely through importation. While the UK possesses a substantially larger market than Australia, it still has a clause protecting its PIRs that is worth discussing, especially in the wake of Brexit and the debate surrounding its current implementation. NZ, meanwhile, provides a point of comparison to Australia through having a similar cultural context and being geographically isolated from the rest of the world. It also provides an example for the consequences of an open market.
Foreign imports and Canada’s book market: a history
Unlike Australia, which was largely dependent on British books, Canada’s proximity to the US meant it could undermine Commonwealth copyright law and access both UK and US publications. As a result, Canada is the most flooded book market worldwide. This has established Canada’s publishing trade as what MacLaren and Vincent describe as a ‘culture and economy of importation,’ making PI law an important aspect of making Canada’s existing book trade economical.
In the 1920s, 85% of English-language books in Canada were direct imports, a condition which prevailed until a boom in domestic publishing in the 1960s spurred by government funding initiatives. This increased Canada’s share of locally produced books to 35% in 1969. Despite this, foreign imports still took up the majority with a 65% share of the market that year.
This history of importation in establishing Canada’s market for books demonstrates the need for PIRs. This has allowed Canada, like Australia, to leverage existing relationships and protect local industry with the aim to encourage domestic book production. On 28 January 1992, the Canadian Government announced a new policy to ban PIs which was done to reduce the competition faced by Canadian publishers. In 1997, the Canadian Copyright Act was rewritten to include the distribution right, which requires that all books go through a Canadian distribution company (like Raincoast Books) before release. These laws came into effect in 1999 and were last revised in 2008. As recently as 2024, exclusively distributed titles made up 46.7% of total sales for Canadian publishers, suggesting that it is an important source of revenue for the industry.
Canada’s PI laws: explained
Unlike Australia’s 30/90-day rule, Canada has a blanket PI law requiring all books sold domestically, except copies for individual use, to go through Canadian rights holders. There are two different types of rights holders this law protects: the copyright holder and the exclusive distributor. As in Australia, the copyright holder is the author, and the exclusive publisher within the domestic market. The exclusive distributor imports the book produced by the foreign publisher directly, warehousing the stock, fulfilling orders, managing returns and maintaining sales relationships with booksellers.
There are provisions distributors must follow in order to keep costs down and services running smoothly for local consumers to be eligible for PIRs. For a US book, markups cannot exceed 10% of the US listed price, and the copy must be shipped to the customer within three days if the title is in stock, or within 12 days if it is not. For all other legally imported foreign books, their markups cannot exceed 15% of their listed international price, and they must be shipped within five days of purchase if the title is in stock, or 60 days if it is not. Canadian editions have no service or pricing requirements to meet.
The impact of Canada’s PI laws: general findings
The Department of Canadian Heritage released a study in 2012 which surveyed the impact of the late 1990s legislation. They found that regulations have not constrained consumer choice and that imported books take a 75–80% share of the English–Canadian trade market, with 70% of all titles coming under the exclusive distribution clause and thus subject to pricing and service provisions. Canadian editions of foreign books make up approximately 7% of this market and original Canadian titles make up 14%. With the high degree of imported titles in Canada, nationally produced literature seems to play a reduced part of the market compared to the 60s and 80s. This suggests that while the local publishing industry benefits from protection, to support national literature, further government intervention is required.
A drawback to Canada’s PI law is that the complexity of the rules makes them hard to follow and enforce. Canadian Heritage mentioned that exchange rate fluctuations made it difficult for exclusive distributors to price stock correctly. Another issue with Canada’s PIRs is that it is difficult to enforce across the board, and Canadian Heritage found that parts of the industry with a larger footprint were more likely to comply with pricing and service provisions (i.e. bigger publishers, frontlist titles and high-volume titles).
Additionally, the introduction of Amazon.ca to Canada’s market, over which they were shown to hold a 10–15% share in 2011, problematises the role of PI laws. The clause allowing the purchase of one or two PI copies for personal use means that Amazon isn’t required to go through an exclusive distributor in Canada when selling small volumes directly to the consumer. While Amazon.ca and other online retailers operating in Canada are supposed to acquire books from the exclusive distributor where relevant, the complexity of their supply chain ‘makes it difficult to track or assess PI orders for compliance with the Regulations’.
The impact of Canada’s PI laws: distribution
A key finding from the Canadian Heritage study was that the economy of scale provided by giving rights to exclusive distributors led to ‘an expanded field of distribution options for Canadian publishers, more effective sales and marketing in the Canadian marketplace, and increased domestic title production’. This is supported by Lorimer’s assessment of the distribution infrastructure as ‘absolutely crucial for the domestic book industry’ and serving ‘both imported titles and Canadian-originated titles’. Local third-party distribution is important for mid-sized and smaller publishers which benefit from an economy of scale. If there were no clause protecting local distribution, it is likely books would have to go through the US wholesaler, Ingram, to service Canadian publishers, which would mean receiving stock from publishers only to ship it back to Canada, also posing an issue for returns which tend to be ‘returned to exclusive distributors in Canada’. The importance of local distribution is particularly pertinent for Canada today in light of the trade war with the US.
Takeaways for the Australian publishing industry
As mentioned by the Australian Publishers Association in their submission to Parliament, the simplicity of Australia’s ‘use-it-or-lose-it’ laws is favourable compared to the complexity of Canada’s laws. This is echoed by Canadian Heritage’s finding that the restrictions are not followed uniformly by all publishers across titles.
While Canada’s blanket importation laws were shown not to reduce options for consumers, it is hard to extend this conclusion to Australia’s market. Canada benefits from its proximity to the US and its distribution clause requires that foreign titles are brought in quickly. Australia’s geographic isolation makes it hard to say whether a similarly strict import law would not limit the titles available to Australian consumers.
New Zealand
Canada
Findings
When it comes to the removal of PIRs in Australia, the debate tends to be framed in this way: should we prioritise lower book prices for the consumer or better conditions for the Australian publishing industry? The research in NZ has shown us that it remains to be seen whether PIRs really do reduce the prices of books for consumers. However, Australia’s PIR history and recent advice from the Productivity Commission show it’s a direction that the Australian Government has consistently been moving towards.
If the publishing industry is the priority, PIRs allow publishing houses to generate more revenue through releasing international bestsellers in Australia. The hope is that they’ll invest in riskier titles by writers who are emerging and/or established writers. NZ’s removal of PIRs shows that their local title growth rate is far lower than Australia’s, and that major multinational publishing houses have largely moved out of NZ towards cheaper locations such as Australia. Canada’s PIRs are much more complex than Australia’s, thus being harder to enforce, but they’ve created a local distribution industry which has benefitted smaller publishers. While Australia’s PIR model helps larger publishers, smaller organisations get the shorter end of the stick. If there were more distributors and printers, as well as support for smaller publishers, it would help Australian books flourish. Originally, when the UK was a part of the EU, books could be imported freely between member states of the EEA. However, five and a half years after the UK left the EU, the UK decided to allow for imports from the EEA but prevent exports from the UK.
Thus, to allow Australia’s publishing industry and local writers to thrive, we find that PIRs should not be removed. Additional legislation should be put in place to support smaller publishers, as PIRs fail to do this. We recommend further research to explore possible legislation and government interventions that would be most effective to support smaller publishers, distributors and writers, as well as an investigation into the potential impact that online distributors, such as Amazon, may have on the relevance of PIs in the future.
Context
Up until 1998, NZ had heavy restrictions on parallel importing of all copyrighted goods (including books). The prohibition was legislated via the Copyright Act, which was revised in 1994 but kept the prohibition of PIs in place. In the early 1990s, the major publishers supplying to the NZ market were UK publishers. Due to PIRs, the major UK publishers had local agencies in NZ which held the exclusive copyright and licence to distribute the publishers’ books. This right to exclusivity bolstered local publishers, allowing them to generate a large part of their revenue from international works, which improved their ability to publish more risky and less lucrative local works due to the revenue brought in from big overseas titles.
Then, in 1998, the Copyright Act was amended to allow PIs in New Zealand. The amendment was informed by a report from the New Zealand Institute of Economic Research (NZIER), as commissioned by the Ministry of Commerce. This report compared book prices in NZ and other countries, concluding that retail prices were higher in nations with PIRs in place than those without, thus recommending the removal of PIRs in NZ. The Amendment Act’s justification for the removal of the restrictions was ‘to ensure that New Zealanders are paying internationally competitive prices for goods’.
Parallel importing in New Zealand: a success story?
Since the ban on PI was lifted in 1998, there have been a number of studies conducted investigating the impact and consequences of this decision.
In the wake of the Copyright Act amendment, Coull posited that removing the ban was likely the right approach due to the ability of PIs to reduce prices and improve availability for consumers, and that this outweighs the potential negative effects of PIs, such as products being less suitable to the local market. Coull also believed that PIs wouldn’t reduce profits for the copyright holders or disincentivise publishers to take risks. He did, however, acknowledge that the Amendment Act wasn’t subject to outside scrutiny before it was passed and more should have been done to investigate the adequacy of the pre-existing legislation. Ultimately, in enacting the amendment, the NZ government prioritised reducing prices for consumers. If availability of books was the main concern, NZ’s copyright reforms could have echoed Australia’s 30/90-day rule.
In 2004, the Ministry of Economic Development commissioned a report from the Network Economics Consulting Group (NECG) to investigate the effects of PI since the 1998 reform on certain creative industries, including the book industry. The report compared the prices of NZ’s ‘Top 100’ books of all time with book prices in Australia and the US and found that NZ’s price gap had reduced from 33% to 22% since the legalisation of PIs. Since this report’s publication, its findings have been cited as evidence of the success of PIs, including by a joint submission of the Australian Digital Alliance and others to the Productivity Commission advocating for the removal of PIRs in Australia.
In a 2020 research paper, Victoria University of Wellington law graduate Toby Major collated evidence from other reports to argue that NZ is ultimately better off without PIRs because it’s a small country from which most of its producers are international, so any negative impacts the legalisation creates for local producers are outweighed by the increase in market competition and cheaper prices for consumers. The most recent study Major cited is a report commissioned by the NZ Ministry of Economic Development in 2012. The ministry’s report aligned itself with earlier studies, finding that consumer prices have trended downwards and that there hasn’t appeared to be a negative impact on creative industries.
Beneath the cover
While there’s been a general perception of success regarding PIs in NZ, several studies have questioned this notion. A 2009 report to the Australian Publishers Association undertook its own book price comparison investigation and compared its results to the NZIER (1998) and NECG (2004) studies’ findings. The 2009 report adjusted for different exchange rates and applied similar ‘plausible historical exchange rates’ to the NZIER and NECG rates, finding that there had not been a statistically significant reduction in the price gap between NZ and the US from 1998 to 2009.
Additionally, this report argued that NZ’s domestic publishing industry had suffered since the removal of PIRs. It found a growth rate of less than 1% per year of NZ titles published compared to Australia’s rate of 2.47%, and that two of the five major publishers (Hachette and Penguin) had ceased distributing out of NZ since 1998. Since the release of this study, two more of the big five publishers (Random House and HarperCollins) have also ceased NZ distribution operations. The authors of this report argued that PIs have negatively impacted domestic publishing because they result in publishers making less profit from international bestsellers, so they’re less likely to invest in riskier local titles.
A 2015 study by Frankel et al. also analysed previous reports that had found positive benefits of PIs in NZ, including the NZIER and NECG studies as well as the 2009 Australian Productivity Commission report. They similarly came to the conclusion that these findings should be treated with caution due to the difficulties of extrapolating the influence of PI legalisation from other factors, such as the exchange rate and new technologies. Frankel et al. argued that the ever-increasing importance of technology and the internet resulted in the declining relevance of PIs.
Findings
The studies that have painted a positive picture of the impact of PIs on NZ’s publishing industry have been used as evidence that Australia should follow suit. However, further analysis suggests that the publishing industry in NZ may have been more negatively impacted by PIs than initially believed, and thus it is unwise to use NZ as a model for Australia to follow without deeper interrogation. Additionally, Australia is a bigger country with a larger local publishing industry, therefore more is at stake if PIRs were to be removed.
United Kingdom
Pre-Brexit
Historically, the UK didn’t have any laws surrounding PIs. This was because most laws surrounding intellectual property (IP) were ‘focused almost exclusively on preventing the sale of counterfeit products, rather than on controlling the distribution of genuine goods’. However, once the UK joined the European Union (EU) in 1973, there followed a ‘harmonisation of EU trademark rules’ between EU member states so that they would block any importation of non-counterfeited items from outside the EU.
The UK was a member state of the European Economic Area (EEA), which applied a regional exhaustion regime. Essentially, if a product was sold in the UK or elsewhere within the EEA, the license for that product would be transferred to the purchaser.
This changed on 31 January 2020, when the UK voted to leave the EU following the result of its 2016 referendum. Due to their withdrawal, a lot of the laws the UK had based upon EU laws needed to be abolished.
Post-Brexit
Since Brexit, there has been a lot of discussion within the UK’s economic and political communities around the implementation of PIs. In 2021, the UK’s Intellectual Property Office (IPO) consulted with a large pool of relevant stakeholders and corporations about the future of the UK’s PI laws. One major concern that the UK book industry had is that by allowing PIs, it ‘could lead to domestic revenue losses for many businesses’. An article from the UK’s Publishers Association states that if the government had removed its IP framework, it’d have ‘wide-ranging impacts for UK authors, publishers and the wider book sector’.
An argument made by those who work in the publishing industry is how UK publishers rely heavily on the global exports of their books, specifically hardbacks and trade paperbacks. If the UK’s Labour government (through the consultation launched in 2021, when the Conservative Party was in power) were to implement an international exhaustion regime (IER), it could ‘undermine existing contracts or jeopardise the value of licences in certain territories and disrupt publisher release strategies’. If an IER came into play, it would mean that the creatives behind the books would lose out on royalties and their agents would incur ‘significant losses to earnings’ for their commissions.
After receiving this valuable information, Feryal Clark MP, serving as then Parliamentary Under-Secretary of State for AI and Digital Government, announced that the UK will keep an exhaustion regime known as UK+. UK+ allows companies and individuals to import products into the UK that are from the EEA, however, the opposite can’t be done for those living in Europe, preventing PIs from occurring.
Australia and the United Kingdom
Australia and the UK have a shared history concerning PI laws. Australia created its PI laws in 1991 due to the enormous hold that the UK and the US have over the English-language book market. Thus, the Australian rights ‘were often assigned with UK rights [... meaning] that many US books did not become available in Australia until the UK publishers produced their edition, for which they also usually held Commonwealth rights’. Essentially, Australians would have to wait six months or more for UK editions. The UK’s early influence on Australia’s publishing industry was wide-reaching and it wasn’t until the Copyright Act 1968 came into effect that Australia finally had a sense of self.
Kathleen Ann McLean mentions in her 2002 thesis that due to the UK’s persistent legislation, it made Australians perceive books as ‘a cultural product inextricably linked with Britain,’ and it didn’t help that ‘the federal government made no move to separate Australian cultural and commercial interests from those of the British.’
Australia’s PI laws have worked out better in the long run for its authors and publishing industry. While many who argue that removing PIs can help consumers out financially, both the UK and Australia allow personal importation anyway.
Findings
While Brexit did play a role in amending the UK’s PI laws, ultimately the changes made to them were not drastic.
The UK publishing industry wouldn’t take a hit, so to speak, because of the connection that most of the ‘big five’ have. It’s understandable on their concerns surrounding the publishing industry, especially when it comes to American imperialism.
But as Howe and Lesh mention in their research article for the Institute of Economic Affairs, those against the removal of PIs say that it could diminish ‘the UK’s soft power [...] leading to lower UK content sales overseas’. Admittedly, however, this idea feels unbelievable, especially considering the kind of soft power the UK has; because according to the Publishers Association Annual Report 2025, the UK is the ‘biggest exporter of books in the world’.