FEDSA seek reform of EU direct selling directive
attended a meeting with the EC to seek a reform of consumer
protection legislation in Europe, to allow for global cosmetic
companies to more freely retail in these markets.
With direct selling predicted to grow in the run up to 2010, many cosmetic companies such as Swedish based Oriflame and global company Avon make high sales revenue from the European market. In response to this predicted growth, a meeting took place earlier this month between FEDSA chairman Richard Berry and Mrs Kuneva, European commissioner for consumer affairs to educate the EC on 'the role direct selling plays in strengthening the economies of EU member states'. Berry highlighted the opinion that current consumer legislation imposes unreasonable restrictions on the significant sector of European trade, that brings in over €19bn in total annual sales, and called for an early reform of the legislation in a new harmonisation directive. Many direct sales cosmetic companies, such as US business Mary Kay, are beginning to benefit from the recent upsurge in the direct sales trend in China, following the lifting of a ban imposed to halt scam door-to-door sales people. Therefore the uncertain legislation in Europe could cause uncertainty over the future of the market as emerging areas, such as China, benefit from the majority of the growth in this sector. FEDSA claims it is now time to evolve from the 1985 (Doorstep Selling) Directive and bring it up-to-date with the new development. The legislation was originally designed to provide order-cancellation rights to consumers entering into substantial contracts at home. However, it has allegedly evolved and now causes unnecessary red tape for European based agents - resulting in an outright ban on direct sales in Luxembourg. In the lucrative French cosmetics industry the directive denies the direct seller from collecting payment from the consumer before the end of the cooling off period and allegedly has unreasonably low thresholds for regulated contracts in all member states. FEDSA states that the inconsistency in the national legislation causes difficulty for efficient pan-European businesses.