Opinion of the European Economic and Social Committee on ‘Strengthening the European personal care, body hygiene and beauty products industrial sector’ (own-initiative opinion)
Date: 2016-10-20
Institutions: European Economic and Social Committee
Subjects: animal experimentation, chemical product, consumer protection, cosmetics industry, health control, health risk, international cooperation, market supervision, research and development








C_2017034EN.01003101.xml










2.2.2017   


EN


Official Journal of the European Union


C 34/31





Opinion of the European Economic and Social Committee on ‘Strengthening the European personal care, body hygiene and beauty products industrial sector’
(own-initiative opinion)
(2017/C 034/05)






Rapporteur:



Ms Madi SHARMA





Co-rapporteur:



Mr Dirk JARRÉ











Plenary Assembly decision


21/01/2016




Legal basis


Rule 29(2) of the Rules of Procedure




 


Own-initiative opinion




 


 




Section responsible


CCMI




Adopted in section


28/09/2016




Adopted at plenary


20/10/2016




Plenary session No


520




Outcome of vote
(for/against/abstentions)


181/1/1




1.   Conclusions and policy recommendations









1.1.


Europe has always played a key role in the production, innovation and development of personal care, body hygiene and beauty products. More recently, its leading position in this sector has progressively been eroded in the process of global competition and conditions which fail to recognise the innovatory technological pressure and commercial reality of remaining competitive.












1.2.


This opinion considers strengthening the European personal care, body hygiene and beauty products industrial sector, specifically those products covered by the Cosmetics Regulation (EC) No 1223/2009. A ‘cosmetic product’ is any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours; a substance or mixture intended to be ingested, inhaled, injected or implanted into the human body shall not be considered to be a cosmetic product.












1.3.


The hygiene paper, tissue and sanitary wear sectors are outside the scope of the Cosmetics Regulation but can be considered in many of the recommendations due to the added value of this sector in personal hygiene.












1.4.


The opinion does not include pharmaceuticals, tattoos, permanent makeup, beauty care services nor products administered via surgery or instruments, nor skin care products for animals. However, the EESC recommends that all of the above should be considered in a separate document due to rising consumer concerns regarding harmful chemicals.












1.5.


While the innovative capacity of Europe’s specialised enterprises is impressive, innovation itself and thus production and commercialisation of EU inventions, have shifted to other parts of the world, bringing serious economic and social consequences. Creating an enabling environment, to move beyond Industry 4.0 by considering advanced bio-technological progress, through appropriate strategies, will lead to major contributions to industrial reshoring and new product development (NPD).












1.6.


The EESC makes the following sector specific recommendations accepting that the sector is already well regulated to ensure consumer protection and safety; additional legislation is considered unnecessary but increased transparency should be considered:






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Greater technology convergence between life science engineering, development of genomics, pharmaceuticals, medical devices and the beauty and care sector










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Better collaboration between large and small companies and within bio-technical research










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Strategies to minimise the non-revenue generating period for innovative SMEs










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Greater market intelligence and knowledge transfer between stakeholders to enhance cosmetic innovation and promote individualisation










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Improved opportunities for employment in innovation and NPD










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Resource and waste management strategies for environmental sustainability and the circular economy










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High priority for research into alternatives to animal testing together with regulatory acceptance of proven alternative methods










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Widespread application of requirements in connection with protection of biodiversity, respect for the intellectual property of indigenous people and compliance with fair trade principles










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New concepts for the engagement of user groups and consumers from NPD to evaluation










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Review of international cooperation to increase accessibility, harmonisation and the promotion of EU standards worldwide to combat fraud.








2.   Personal Care Sector Overview









2.1.


Cosmetics and personal care products are daily essentials for over 500 million European consumers, across all age segments. Products range from everyday hygiene products such as soap, shampoo, deodorants and toothpaste to luxury beauty items such as perfumes and make-up. The sector itself is worth EUR 77 billion (2015) and was one of the few sectors untouched by the global financial crisis. Europe is established as a world leader in the sector and a dominant exporter of cosmetics. Trade outside Europe amounted to EUR 17,2 billion in 2015.













2.2.


Brand recognition in the cosmetic industry is important due to the high degree of competition. Customer loyalty is based on reliable advertising, quality, safety and new product development (NPD), and can be compared with the fashion industry with seasonal shifting trends.












2.3.


The sector is made up of all sized companies with over 4 600 SMEs in the cosmetics industry in Europe. The SME segment is estimated to be 30 % of the market but in some EU States this can be up to 98 %. The product portfolio ranges from 20 000+ products for large companies to around 160 for smaller companies. A large cosmetic manufacturer has a portfolio of around 2 000 ingredients, 600 for SMEs, with each adding around 4 % of new ingredients annually. These new ingredients have a significant effect on profitability and growth.












2.4.


At least 2 million people are employed throughout the value chain across Europe from manufacturing to retail. Manufacturing itself employed 152 000 workers in 2015 (1) with slightly more female workers (56 %) than males (44 %). Over the past five years, the industry has grown its direct and indirect employment by 2,3 %, more than 39 000 jobs (2).












2.5.


In 2015, the expenditure on R & D is estimated at EUR 1,27 bn. This varies considerably per country. The industry employs over 26 000 scientists researching new areas of science, working with new ingredients, developing formulations and carrying out safety assessments, leading to an impressive number of patents in the EU each year.












2.6.


The European paper industry, in particular the tissue industry, is worth over EUR 10 bn. annually and represents 25 % of the global tissue market. The increased use of quality tissue products such as paper towels, handkerchiefs, toilet paper, etc. is an important element of improved life quality and overall hygiene conditions both, at home and away from home and thus an important contributor to the personal care sector.












2.7.


The European cosmetic sector is credited with taking the lead on a complete ban on animal testing, whilst still promoting innovation and competitiveness. Today’s market is driven by safety and innovation equally, with new colour palettes, skin-specific treatments, anti-ageing products and unique formulas. Consumers constantly demand more choice, better personalisation and even greater efficacy. In order to respond more effectively to user’s preferences and expectations, consumer groups and organisations are regularly engaged at the earliest stages of development




3.   EU Legislation









3.1.


The monitoring of ingredients and testing criteria, including the ban on animal testing, environmental protection and labelling, are all subject to EU legislation and guidelines. The regulatory framework for market access, international trade relations and regulatory convergence are monitored by the European Commission.












3.2.


The Cosmetics Regulation, Regulation (EC) No 1223/2009, has applied since 2013, replacing Directive 76/768/EEC, adopted in 1976. Its goal is to harmonise rules to achieve an internal market for cosmetic products and a high level of protection for human health.












3.3.


Regardless of manufacturing processes or channels of distribution, cosmetic products placed on the EU market must be safe. The Cosmetics Regulation (including its Annexes) and its amendments provide the regulatory requirements and restrictions for all substances used in cosmetics. A cosmetic product’s ‘Responsible Person’ is liable for the safety of the product and must ensure that it undergoes an expert scientific safety assessment before it is sold. A database with information on cosmetic substances and ingredients, CosIng, enables easy access to data on these substances. Ensuring a high-level of protection for human health and consumer safety, also implies that the responsible scientific committees should take particular account of the potential health risks to particular professional groups (e.g. hairdressers and beauticians) who use cosmetic products on a daily basis, in the line of their professional activities, and are therefore subject to higher levels of exposure than the general public.




4.   Strategies for Sector Growth









4.1.


To remain competitive, manufacturers are constantly innovating to discover new ingredients, utilising existing ingredients in new applications and creating more personalised products. However, they cannot work in isolation and thus the EU Commission, national governments and stakeholders, especially consumer and employee representatives, need to work together to create an environment conducive to growth.












4.2.


The EESC recognises that the main challenges for growth in the sector are comparable to those of all industry sectors and makes the following recommendations specifically for the personal care and cosmetic sectors:












4.2.1.



Greater convergence of the life-science engineering sector, including between genome research and the beauty and care sector, would better support product diversification. Skin is the largest organ of the human body but the distinction between the dermal application of cosmetics and treatments by medical products tends to disappear. Certain effects like irritations, allergies and skin cancers need to be taken into account. Initiatives such as EIT Health (3) spanning key areas of healthcare including pharma, MedTech, BioTech, and Digital Health are good examples of collaboration. Cosmetic products bring increased personal hygiene, well-being benefits and/or lifestyle factors (positive effects that are not recognised in regulations such as reducing stress, confidence building or enhancing sleep). Whilst cosmetics are not medicinal products, cosmetics are based on sophisticated science of the skin and its function. Development of cosmetics can therefore benefit from advances in other fields of biological science, in particular in the pharmaceutical industry. Research collaboration should be encouraged to focus on individualisation considering tailored lifestyle and wellbeing products.












4.2.2.



Better collaboration between large and small companies, alongside the development of sector specific incubators (4) or clustering, could increase competitiveness and enhance growth. All cosmetic products undergo an expert scientific safety assessment before they are launched which can be administratively and financially restrictive for smaller companies. Although it is essential the safety assessment remains in place, smaller innovative companies should utilise a range of business support measures that could assist the development period between the innovation and NPD process and the successful commercialisation of the final product, thereby reducing the risk of failure. Such measures would include better intelligence sharing, through technology and knowledge transfer; cooperation for investment opportunities; costs reduction analysis and accessibility to funding streams (5). Additionally, governments should shift their mind-sets on manufacturing towards supporting local production and job creation in Europe.












4.2.3.



Greater market intelligence and data provision from academia, industry and consumers will enhance growth through knowledge transfer. Personal care trends have moved towards organic, natural, sunscreen UVB and UVA, pro-aging and anti-ageing products expanding the scope of innovation. Currently menopause and aging innovation offers an area of development for the beauty segment, targeting a substantial number of people with products that help them to look and feel their best. With scientific and technological advancement in sequencing of the human genome, and progress made in understanding its diverse functions and its absolute individuality, the future of the cosmetics industry lies in extremely advanced personalisation of the products. Research and investment in this approach, in cooperation with the medical professions and academia, constitute a key issue for the sector.












4.2.4.



Encourage greater engagement of employees. Employees are at the forefront of product innovation, as they experience the overview of the sector from the development process to consumer feedback. Hence increased consultation, including the promotion of intrapreneurship, could support company growth. The sector is diverse in its employment opportunities and improved communication to showcase skills and competences required for current and future development will make the sector more attractive. Over 514 000 life sciences students are engaged in Europe (6) creating new research and opportunities for increased collaboration across sectors. Again, greater collaboration between academia and industry would help attract a wider spectrum of employees.












4.2.5.



Research and Development provision, investment, R & D expenditure and safety provisions are needed to sustain growth. Funding mechanisms, public and private, for R & D, patent registrations and NPD in manufacturing within the EU could be considered.












4.2.6.



Patent infringements and counterfeit goods pose a serious risk to profitability for large and small EU companies, as well as to consumer health. In 2006, counterfeit perfumes and cosmetics cost the EU EUR 3.0 bn. in lost revenue. Greater IP protection for brands could be ensured by including the country of manufacture on the product.












4.2.7.



Commitment to ‘risk based’ regulation: Currently substances are not regulated based on their intrinsic properties (e.g. irritant) but on the basis of whether the property of the substance will actually occur under the real use conditions (e.g. used at a concentration below the irritation threshold). This approach is possible because the use of cosmetic products is well defined and full risk assessments are possible. This is different to chemicals legislation (without defined use), where the intrinsic properties ‘hazard’ drive the legislation. It is crucial to the future ability of the industry to innovate and grow, that an appropriate distinction between hazard and risk is maintained in EU legislation and policy.












4.2.8.



Promotion of territory specific ingredients. Facilitating the research and certification of regionally specific natural products through Protected Geographical Indication (7) (i.e.: Corsican Immortelle) would allow for the promotion of EU regional products enhancing a focus on local commodities and artisanal products. Currently the costs of isotope tracing, or laboratory analysis of natural products is prohibitive for entrepreneurs and SMEs.












4.2.9.



Animal testing ban: The Cosmetics Regulation has established testing bans (prohibition on testing finished cosmetic products and cosmetic ingredients on animals) and marketing bans (prohibition on marketing finished cosmetic products and ingredients in the EU which were tested on animals). There is no desire to lift this ban. However, the following challenges are faced by manufacturers in innovation, NPD and exports:






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Regulatory acceptance of validated alternative methods: In a number of areas of safety testing, non-animal strategies have been successfully developed, validated and accepted by OECD. These can accurately predict the complex reactions of a biological system, in particular for the testing of finished cosmetic products as well as for certain toxicity endpoints in relation to ingredient testing. It is also possible to substitute certain missing safety information by read-across to already known, chemically related ingredients or through application of a threshold-of-toxicological concern. It is crucial that these validated methods are accepted by regulators so industry can move toward innovative and an animal testing free world.










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R & D to improve safety assessment of ingredients and products: In the absence of animal testing there is as yet not a full set of in vitro tests for safety assessment of new molecules such as sunscreens. Research to develop safety assessment approaches without the use of animals should be supported both from the private and public sector. R & D to understand skin biology to develop products that prevent/reduce skin cancer are a priority as the incidence of skin melanoma is still increasing.










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Exports: many of the countries to which European cosmetic products are exported require product testing on animals as part of consumer safety. This leads to conflicting regulatory requirements and significant challenges for the industry. Global agreements on this issue should be negotiated.
















4.2.10.



Resource and waste management: Population growth, consumption increase and the depletion of resources, particularly water, are issues for consumers’ and industry alike in respect of sustainable consumption and CSR. Producing environment-friendly products which consider waste and resource management is a sector priority. The Commission’s Circular Economy package and Cosmetics Europe’s ‘Guidelines for Cosmetic Companies, especially SMEs (2012)’ are valuable but much more needs to be done as significant challenges remain. The protection of resources for the sector goes hand in hand with the need to protect biodiversity, which is of shared benefit for current and future generations. The search for new products should not be at the expense of indigenous people and their intellectual property. The widespread application of fair trade principles and environmental codes of conduct among businesses in the sector is both beneficial and much needed. No less important is the attitude of consumers, who should reject products manufactured using methods at odds with sustainable development principles.












4.2.11.



Increased transparency: Market surveillance is key to ensuring consumer protection. Increased collaboration between National Consumer Authorities, Consumer organisations, users and health professionals at a national level would enhance consumer trust and transparency. The consultations with stakeholders should take place throughout the process of product development and innovation. Product notification on the RAPEX system empowers consumers to demand improved safety throughout the supply chain but they insist that notification of serious risk should be at the earliest opportunity. Consumer’s state greater transparency is needed towards:






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Ensuring stronger enforcement of existing legislation and clearer safety assessment, to preserve consumers trust in product safety whilst increasing levels of compliance with the Cosmetics Regulation, this includes more comprehensive and easy-to-read labelling on how to use products and their purpose.










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Advertising transparency is required on editorials ‘advertorials’ and product promotion in order to avoid misleading consumers. Advertising has prohibitively high advertising costs for smaller companies. Paid advertising material should be clearly identified, including comparisons of products which, although branded differently, are sometimes from the same company.










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On organic products the Cosmetics Regulation does not lay down specific rules. There are currently no EU harmonised rules setting criteria for organic cosmetics, leading to products with low levels of organic ingredients being able to claim ‘organic’ credentials. Consumers could be misled and the EU beauty industry risks damaging its trusted reputation without the implementation of specific guidelines.
















4.2.12.



Opportunities in new markets including those geared towards changing consumer shopping habits, such as e-commerce and direct sales, offer new sales models alongside trading cross borders. Initial findings of the e-commerce sector inquiry found that half of companies surveyed in the EU cosmetics and health sector did not sell cross-border. Whilst cosmetics companies embrace the digital era they remain limited by regulatory requirements which are often country-specific: including national language labelling; animal testing laws; cosmétovigilance requirements.












4.2.13.



Trade barriers: The EU has a good trade surplus in cosmetic products however the European Commission should continue to press for convergence in fora such as International Cooperation on Cosmetics Regulation and in trade negotiations where the EU regulation becomes an international standard. The EU Cosmetics Regulation remains the model of inspiration for consumer safety for emerging regions (ASEAN, Russia, Latin America, China). This provides an opportunity for EU regulators and industry to contribute to regulatory systems in the main export markets that are highly compatible with the EU system.






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Support for harmonisation is needed to increase internal market trade. Trade barriers are increased in the EU by the lack of a single customs administration. There is a separate agency responsible for EU customs law in every Member State which is not administered in a uniform manner. EU rules on classification, valuation, origin and customs procedures are often applied differently in each Member State, with varying VAT levels.










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Combating fraud, counterfeiting and adulteration in imports and within the EU is a serious issue. EU countries must cooperate, exchange information and act more quickly on Serious Undesirable Effects (SUEs) attributable to cosmetics use. The increase of fraudulent and adulterated products, partly as a result of rising imports, coupled with limited resources in the Member States to monitor products, means that risks to consumer’s health are increasing.










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Trade Agreements: Cosmetics have been one of the more challenging chapters of the Transatlantic Trade and Investment Partnership (TTIP) debate. EU standards could be more widely used as a result of TTIP and other trade agreements, promoting the credibility and brand trust of products made in the EU allowing market access for EU companies to more consumers.









Brussels, 20 October 2016.


The President of the European Economic and Social Committee

Georges DASSIS




(1)  Eurostat.

(2)  Source Cosmetic Europe.

(3)  www.eithealth.eu

(4)  http://www.biocity.co.uk/medicity/nottingham

(5)  OJ C 13, 15.1.2016, p. 152.

(6)  Euromonitor International.

(7)  http://ec.europa.eu/agriculture/quality/schemes/index_en.htm