Cosmetics Europe Touts ‘Global Flagship’ Industry Amid Trade War Rumbles
This article was originally published in The Rose Sheet
Executive Summary
The group released updated data on the cosmetics industry’s contribution to Europe’s economy in conjunction with its Annual Meeting in Brussels this month. The report also comes at a time of tense trade relations, with measures in the offing that could adversely impact the sector’s health.
Cosmetics Europe highlights the economic importance of the cosmetics industry in Europe as well as its leading position worldwide in an updated report, which comes at a time when cosmetics are being swept up in international trade battles.
The European Union’s cosmetics market is valued at €77.6bn, continuing to weigh in as the largest in the world, according to the trade association’s May report.
“The data re-confirms the significant social and economic contribution of the cosmetics industry to the European economy,” Cosmetics Europe says.
Further, more than €20bn worth of cosmetic products were exported in 2017, up from €17.2bn in 2015, and 50% of all global cosmetics exports originated in Europe.
The figures mark Europe as the “global flagship producer of cosmetic products.”
It’s estimated that the number of small and medium-sized cosmetics businesses in Europe reached 5,500 in 2017, per Euromonitor data.Despite its cosmetics trade surplus, the EU will be levying tariffs on cosmetics imported from the US, starting in July, as part of its retaliation against steel and aluminum duties imposed on EU exports by the Trump Administration.
Cosmetics Europe has questioned the sense of targeting cosmetic imports, given that Europe ships out 50% more cosmetics than it brings in, while the group’s US counterpart continues to voice concern about the direction the US is taking with international trade. (Also see "Cosmetics Caught In International Trade Crossfire" - HBW Insight, 14 Jun, 2018.)
Both organizations have noted that European cosmetics firms, in addition to US industry, are likely to feel the impact of the EU’s import tariffs given the global nature of today’s cosmetics business.
Within the bloc, trade also is robust, with approximately €35bn worth of cosmetics crossing inter-European borders in 2016, Cosmetics Europe says. France was the largest local exporter, accounting for €7.56bn of cosmetics, followed by Germany, with €6.03bn.
According to the trade group, the industry it represents supports an estimated 2m jobs across the continent, with 195,000 people directly employed in manufacturing cosmetic products and 1.64m indirectly employed in the larger value chain.
Additionally, between 366,200 and 549,400 EU citizens have jobs thanks to “induced” effects, i.e. “as a result of employees spending their wages on goods and services.”
The group’s report also highlights the R&D and science that drives the industry, noting that more than 27,900 scientists are at work in the cosmetics sector.
It’s estimated that the number of small and medium-sized cosmetics businesses in Europe reached 5,500 in 2017, per Euromonitor data.
Cosmetics Europe also points out that the EU is home to more than 100 firms that manufacture cosmetic ingredients, as well as a “large number” of companies that manufacture cosmetic packaging and packaging components.
The group’s report was prepared by Risk & Policy Analysts Ltd. and builds on a similar report released in 2016. (Also see "Cosmetics Europe Looks To "Future-Proof" Industry Amid Global Changes" - HBW Insight, 22 Jun, 2016.)
Cosmetics Europe provided the update in conjunction with its Annual Conference held June 13-14 in Brussels.
The Personal Care Products Council has published similar reports on the US cosmetics industry’s economic contributions, using them partly as tools to help fend off oppressive legislation. (Also see "PCPC: New Industry Economic-Impact Study Is Key Legislative Tool" - HBW Insight, 8 Mar, 2016.)