P&G says that fragrance manufacturing under licensing is currently one of its fastest growing business area and is in line with its move into the luxury and prestige end of the mass consumer market.
There has been considerable movement in the global fragrance market of late, especially after Unilever, P&G's biggest consumer goods rival, sold its fragrance business to Coty, which in turn made it the world's largest fragrance player.
The move, which was valued at €665 million, gave Coty access to key fragrance brands such as Calvin Klein and Chloe, increasing its prominence on the global market.
The deal is P&G biggest move on the fragrance market since its acquisition of Wella last year. That deal gave P&G the rights to the a number of fragrance brands, including Gucci and Dunhill.
Meanwhile, on October 1st, P&G also finalised its merger with Gillette, a $57 billion deal that made the company the world's largest consumer products company. The deal is also likely to increase the company's presence in the male cosmetics and toiletries market.
But at the increasingly competitive fine fragrances end of the market, P&G's move bites back at the competition, which is currently led by L'Oreal. P&G says that the move will help it to muscle in on the global growth in fine cosmetics and fragrances, which is largely being driven by developing markets.
According to market information provider Euromonitor L'Oreal had a 12.9 per cent share of the €15.7 billion global fine fragrances market, while P&G comes in second with a 12.2 per cent share.
The third biggest player is luxury goods group LVMH with an 11.2 per share of the market, while Coty has a 3.9 per cent share.
Dolce & Gabbana, which is fully owned by business partners Domenico Dolce and Stefano Gabbana, confirmed that they would design and develop new beauty products which are mooted for a global launch next summer and will include three new fragrances in the space of the next two years.
Currently Dolce & Gabbana's fragrance brands include Classic Women's Fragrance, Light Blue and Pour Homme.