Terror threat presents double whammy for cosmetic industry

Only yesterday cosmetics giant Estee Lauder issued a warning that the current quarter may well be affected by the impact of airport closures and delays that crippled international airports last week.

Estee Lauder pointed out that 7 per cent of its annual $6bn sales are attributable to purchases made at travel retail outlets, primarily in airports.

The company believes that last week's airport disruption may well have a noticeable impact and brought attention to this when it published its quarterly results up to June 30.

The terror threat, which in the UK was downgraded from 'critical' to 'severe', came about after British intelligence intercepted an alleged bomb plot.

According to reports a group of politically-motivated terrorist had plotted to blow up a number of airplanes in mid-flight from the UK to the US using liquid explosives.

Evidently these liquid explosives can be easily concealed in hand luggage and are also difficult to detect as an explosive using standard security measures.

What's more, they can be easily disguised as every day cosmetic items, from a bottle of shampoo, to a fragrance bottle or even toothpaste.

It is for this reason that it is no surprise that all cosmetic products have been banned from hand luggage in an attempt to minimize risk.

Currently the British Airports Authority says that any items that could contain liquids, such as tubes, cans, plastic containers and bottles will not be allowed to be carried on board as hand luggage.

This means that just about every possible cosmetic, toiletry and fragrance item - from Chanel No.5 to hair gel - cannot be taken on board.

Similar measures are in force, both in the US and other major destinations worldwide.

Although the current status for airport security measures is changing by the day, this move spells bad news for the cosmetics industry for as long as these measures remain in place.

Obviously it means that travellers are going to be more conscious of the types of cosmetic and toiletry items they pack in their luggage, which could cause them to travel with less products than normal to avoid trouble.

But perhaps the biggest impact for the industry will be the effect the measures will have on sales of cosmetic, toiletry and fragrance products in airport lounges.

Obviously if no one can take such items on board, far fewer purchases are going to be made in airport retail outlets before embarking on the plane.

And considering the huge growth of the airport retail industry for cosmetics and fragrances in recent years, which has particularly helped to drive sales of luxury cosmetics and fragrances, it will not be surprising to see more companies expressing anxiety over the impact this will have on the industry in coming weeks.