French beauty association supports bill tackling “soaring costs and pressure from distributors”
11 Jan 2023 --- In representation of French manufacturers of hygiene and beauty products, the Federation of Beauty Companies (FEBEA) is supporting Frédéric Descrozaille, a member of the National Assembly, who is proposing a law to limit “super-promotions” that are often applied to personal care products and other non-food items.
The bill aims at “securing the supply of French people with consumer products.” FEBEA is also supporting the amendment of extending the limitation of 34% of promotions – which exists for food – to non-food products.
It flags that hygiene and beauty manufacturers are “caught in the trap of an impossible economic equation” – facing a historic rise in costs paired with the pressure on distributor prices.
Question of survival
The organization calls on parliamentarians to support the bill currently under debate in the National Assembly.
“Without super promotions, the risk is industrial breakage and therefore the future of Made in France, of which cosmetics is one of the flagships,” says Emmanuel Guichard, General Delegate at FEBEA.
“For large companies, the question arises of maintaining production activity in France. For very small enterprises (VSE), small-medium enterprises (SME) and intermediate-sized enterprises (ETI), it’s quite simply a question of survival. Not a single cosmetics SME would launch into the retail market today.”
These fears are mirrored by Eric Jacquemet, president of the FEBEA of the French Syndicate of Cosmetics and Toiletries, which brings together companies that sell to supermarkets.
For the FEBEA, the bill proposed by Descrozaille makes it possible to rebalance commercial relations and correct several dysfunctions.
“SMEs are strangled between soaring costs and pressure from distributors who, by all means, demand low prices to attract the most consumers to their stores.”
“How can we reasonably believe that an SME, which manufactures a shower gel sold for less than one euro, earns a living? It was very difficult before inflation. It is impossible today. The challenge is no longer to increase the margins of our companies – it’s just to prevent French SMEs from disappearing,” he underscores.
Side-effects of Egallim law
For the FEBEA, the bill proposed by Descrozaille makes it possible to rebalance commercial relations and correct several dysfunctions and side effects of the Egalim law in France while preserving the purchasing power of the people.
“By limiting promotions on food products, the Egalim law has caused distributors to postpone their super-promotions on non-food products, particularly products in the hygiene and beauty department,” FEBEA explains.
With aggressive discounts of up to 80% on shower gels or shampoos, cosmetics have become the loss leaders of supermarkets to attract customers, according to FEBEA, and thereby the new variables of system adjustment.
To end this untenable situation, the FEBEA supports the amendments to restrict promotions to non-food products. It points out that the distributors set the price for consumers, not the suppliers.
Edited by Radhika Sikaria
