ATO sticks boot into Australia’s top ugg boots manufacturers

One of Australia’s top ugg boots manufacturers has been battling the tax office, as the local industry complains of cheeky imports and being blocked from using the word “ugg” when selling their sheepskin boots overseas.

Ugg boots have become fashion items overseas and Australian companies are estimated to do hundreds of millions in sales here and abroad.

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Several weeks ago, the Australian Taxation Office applied to wind up Ugg Australia.

There are about a dozen sheepskin footwear manufacturers in Australia, but Ugg Australia is the only one with its own tannery. “We cut, stitch and glue every pair of sheepskin boot here in Melbourne, Australia,” its website states.

Several weeks ago, the Australian Taxation Office applied to wind up Ugg Australia – estimated to be one of the top five Australian-made sheepskin footwear manufacturers – due to a debt. A Federal Court hearing is set for Tuesday, October 11.

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One of Australia’s top ugg boots manufacturers has been battling the tax office.

However, Ugg Australia’s accountants Black & Krantz said on Friday the matter had been settled with the ATO. The ATO declined to confirm that the matter had been settled.

Decades-old Ugg Australia also sells under the Roman & Ludmila (R&L) brand overseas.

Despite the Oxford English dictionary defining cheap ugg as a “kind of soft sheepskin boot”, Australian manufacturers are not able to use the word “ugg” when selling boots overseas. This is because US footwear and clothing brand Deckers trademarked the word “Ugg” after it bought UGG Holdings in 1995.

It’s a long-running debate whether the word “ugg” is a trademark or a generic term.

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Nick Xenophon loves his Uggs.

But Michael Kaper, secretary of the Australian Sheepskin Association, said a more pressing concern for remaining manufacturers was a surge in cheaper, imported sheepskin boots emblazoned with the words “ugg” or ‘Australia’, or the Australian flag.

“In the last 12 months, I’ve seen prices have gone down by up to 30 to 40 per cent, in what we call the classic products: the classic short, the tall boot and the ankle boot,” said Mr Kaper, who is also a director of an Australian manufacturer, Jumbo Ugg Boots.

“When you have a product with the word ‘Ugg outlet‘ on it, and it says ‘100 per cent sheep skin’, and it’s a classic Australian style, the average consumer will think, ‘Wow, I’m getting a really good bargain here for this Australian-made boot.’

“But what they’re actually buying is a product that’s made wholly in China, with an ‘Ugg’ stuck to the back of it.”