Investment lobby group tackles EU cosmetics laws
Union legislation and existing US regulations for the cosmetic
industry, and what the differences mean for companies, consumers
and shareholders.
In 2003 the EU adopted a directive, which bans the use of substances identified as carcinogens, mutagens or reproductive toxins (CMR's) in cosmetic products. EU Member States legalised the directive in 2004 and it entered into force in 2005.
Since then global personal care players, and in particular US-based companies, have been working towards ways to reconcile their formulations according to EU regulations in an effort to ensure their products can be sold in the EU and to comply with the global standards the regulations are encouraging.
Authored by Citizens' social research analyst Dr. Vesela Veleva, the report and analysis found the EU legislation, with the goal of protecting human health and the environment, will have far reaching consequences for the global cosmetics industry.
Over 1,000 substances are currently banned for use in cosmetic products in the EU. For comparison, less than two-dozen chemicals are restricted or banned for use in cosmetics products in the US. The FDA does not require manufacturers to conduct toxicological and other safety tests prior to bringing cosmetic products to the market.
For many the gap between EU and US regulations points to short falls that have become a focus of attention for many in the industry. Indeed, regulations have just been passed in California that aim to bridge some of these shortcomings and could well lead to further amendments on a national level.
In May 2005 Citizens Advisers co-filed a shareholder resolution at Avon Products, requesting the company to reformulate all of its products sold worldwide to EU standards. Other global cosmetics manufacturers, such as Revlon, L'Oreal and Estee Lauder, have already committed to global reformulation.
The group says it believes reformulation will not only protect human health and the environment, but also shareholder value by avoiding potential market exclusion, fines, liabilities and damaged reputation.
In turn the group also points out that because of Avon's action the company could be a leader in phasing out all carcinogens, mutagens and CMR's from its products sold worldwide. Proving the popularity of this move, the resolution received 5 per cent of the votes at the 2005 annual meeting.
To obtain a free copy of the report please go to the Citizens Advisers website.
