Russia’s sanctions slowing down cosmetics business
This year seen many a cosmetic brand bear loss in Russia.
In Paris, L'Oreal reported a drop of 1.85% to 124.85 euros as the maker of Maybelline mascara and Lancôme cut its growth outlook for the cosmetics market.
Brand CEO Jean-Paul Agon told France's Le Figaro newspaper that the cosmetics giant is now projecting 3 to 3.5% growth in the second half, compared to an earlier forecast of 3.5% to 4%.
Unilever's chief executive Paul Polman also reported the sanctions to have significantly deteriorated the company's business environment which seen a decline in its revenue in the area from double-digit to singular figures.
Despite being one of the largest players in the Russian cosmetics market to date, Unilever has as a result of this put plans to double its production capacity in Russia on hold.
Meanwhile, another company with big business in the Ukraine and Russia, Swedish cosmetics producer Oriflame has had to put one of its Russian plants, in Krasnogorsk, up for sale to reduce costs.
Ukraine unrest even affecting cosmetic regulation
On a visit to Oriflame’s R&D facility in Dublin back in April, regulatory expert Garrett Moran sat down with Cosmetics Design to discuss how unrest in the Ukraine could see regulatory plans pushed back.
This publication had previously investigated how the unrest in Ukraine was affecting European cosmetic companies. At the time, major players like L’Oreal and Beiersdorf reported no disruption to operations or exports but that they were "keeping a close eye on matters".
Whilst Garrett reports the company to also be ‘ keeping a close on matters’, he reveals that the unrest is likely to affect the industry at a regulatory level.
The director of product safety and technical compliance reports that a round table had been scheduled with the cosmetics industry and the Ministry in Ukraine to discuss it becoming more aligned with Europe in terms of customs, a proposal he reckons will now be taking a back seat.
“With the obvious political crisis, cosmetic regulation is not likely to be top of the ministry’s agenda,” he told CosmeticsDesign-Europe.com at the time.
“We have people on the ground there that have been lobbying with local government, but all has gone quiet of late,” he added.
In regards to Russia, Garrett says he doesn’t expect to see many changes there with regulation, as an updated customs union regulation was implemented there years ago.