A Brave New World for Cosmetics

By Laura Klepacki, special to GMDC

The world cosmetics market is coming under scrutiny. Concern over environmental issues and product safety – namely the use of toxic chemicals – has been rising.

In the matter of product formulations, historically, the U.S. cosmetics business has been nearly self-regulating. Government oversight, for the most part, has focused on labeling and advertising claims. Manufacturers are responsible to test for product safety.

But with a raft of new regulations on the horizon, that could be changing. And because the business has become so global, adherence could be a challenge.

For one, the California Safe Cosmetics Act goes into effect this month. While details have yet to be finalized, a key component calls for ingredients disclosure to the state.

But that is only the tip of the iceberg in the Golden State. A recent study by the California Policy Research Center at U.C. Berkeley, commissioned by the state legislature, has recommended that California step in to set new standards in chemical policy that would impact cosmetics and beyond.

As the report states: “A comprehensive approach is needed that corrects long-standing federal chemicals policy weakness and builds the foundation for new productive capacity in green chemistry – the design, manufacture, and use of chemicals that are safer for biological and ecological systems.”

Additionally, New York and Massachusetts are each working on phthalates regulations.

Outside the U.S., the European Union is expected to adopt the REACH program next year. The proposed Registration, Evaluation, Authorization and Restriction of Chemicals regulation will replace 40 existing EU directives.

Already some beauty manufacturers have been printing multiple ingredients labels to adhere to various market requirements. Meanwhile, growing consumer awareness and concern has prodded some to voluntarily remove questionable ingredients such as parabens, a class of preservatives, and dibutyl phthalate which is used to make nail polish pliable, even though the world’s regulatory bodies are not in agreement on whether they are safe or not. The list of companies tweaking their product lines is long. Examples of large players making adjustments include Avon and Sally Hansen. Both have removed dibutyl phthalate from their nail polish. Avalon Organics meanwhile has removed parabens.

Things may change on the shelf as more – and different – product information is offered to consumers. New promotional opportunities may open up as products are changed in compliance with regulations. Retailers will be faced with a new promotional issue – and opportunity – in the cosmetics department.

There is even more to drive these possible outcomes. Manufacturers are now monitoring regulations coming from Health Canada, as well as the Pharmaceutical Affairs Law (PAL) governing products in Japan and other Asian nations.

In response, the U.S.-based industry trade group CTFA (Cosmetic, Toiletry and Fragrance Association) launched a campaign earlier this year dedicated to coordinating global cosmetics regulations. For the public, it is building a web site to provide information on cosmetics products and ingredients. It is planned to go live in 2007.

Discussion Questions: Will impending regulation of cosmetics impact retail sales? If so, how? Can it be an opportunity for astute manufacturers and retailers to promote cosmetics in a new, different and supportive way?