Small to medium businesses have been invited by state governments to “retool” and manufacture medical equipment and hygiene products that are in short supply due to the coronavirus crisis.
However, some are finding that the federal government’s allowance for the import of this exact equipment is in direct opposition to its plea for local manufacturers to “get on board”, leaving Aussie businesses caught between a rock and a hard place.
NSW-based Signature Mouthguards was one of the first businesses to jump on board the state government’s appeal.
Following the unprecedented demand for hand sanitiser in February, the government’s Therapeutic Goods Administration (TGA) relaxed regulations, allowing local companies to produce medical-grade sanitiser without TGA approval or notification.
The managing director of Signature Mouthguards, Ray Gillman, told MyBusiness that like hundreds of others across the country, this Hornsby-based company got in line to do its bit and help the country fight COVID-19.
“As is so happens, we have a sachet-filling machine that we use specifically to fill sachets for one of our mouthguards and we jumped on board the government’s appeal to repurpose to supply materials to combat COVID-19,” Mr Gillman recalled.
“We trialled filling sachets with the World Health Organisation’s sanitiser formulation, hospital grade with 80 per cent alcohol, totally successfully.”
However, the joy was short-lived.
Soon after taking the product to market, Signature Mouthguards found that the market was already saturated by poor-quality imported products.
“We went to the market with the concept and prices. We are big suppliers into the pharmacy market with mouthguards and thought this would be a breeze for us since we have a really switched-on distributor,” Mr Gillman said.
“When we approached our pharmacy distributor, we were informed that he was awaiting a delivery of 12,000 imported purse-size sanitiser bottles, 60–70 per cent alcohol, and passed up on the opportunity.”
Mr Gillman then realised that while local businesses have been asked to follow strict recipes developed by the WHO, resulting in a sanitiser effective against the COVID-19 virus with 80 per cent ethanol or 75 per cent isopropyl alcohol, common hand sanitiser suppliers are not restricted by the same formulations.
As such, Aussie supermarket shelves are mostly flooded with “cosmetic” sanitiser, with alcohol levels between 60 and 70 per cent, intended for domestic use only.
In a bid to sell the product they were made to believe was in short supply, Signature Mouthguards turned to a wholesale retail outlet but drew another blank.
“We have tried numerous operators in the retail pipeline, without success,” Mr Gillman said.
But Signature Mouthguards is not the only business to encounter such barriers.
The company’s supplier of 80 per cent alcohol product followed the same path. The Aussie company spent a fortune on repurposing their equipment, before achieving very limited sales and being forced to switch back to their core production.
As for Signature Mouthguards, Mr Gillman is not going down without a fight.
So far, he has trademarked the new product and is exploring opportunities to sell it overseas.
“We are currently negotiating with a UK buyer for supply into HM Prisons, hospitals and retail,” Mr Gillman said.
Back at home, Signature Mouthguards is also negotiating a deal with a sport equipment and apparel chain, in hopes of finally landing its high-quality product on the shelves.
“We’ve been around in circles in recent weeks and the government’s allowance for the importation of sanitiser products is in direct opposition to its plea for Australian manufacturers to ‘get on board’,” Mr Gillman said.
“It’s funny, but deadly serious, if China wants to protect its manufacturing interests, they just impose a hefty duty on imports or ban the importation, period.”
He added: “At this point we haven’t sold anything.”
His main concern, however, is that customers are being duped.
“We were blissfully believing that when we use sanitiser from our local store, that that is it. But it’s not. There is no evidence anywhere that suggest 60 or 70 per cent alcohol is going to kill COVID-19,” he said.
“Nothing in retail that you see has 80 per cent. It’s totally wrong. The product we buy on the basis of it killing 99.9 per cent of germs, does not kill COVID-19.”