Getting the Best from Exiting the EU

Transcription

1 Getting the Best from Exiting the EU 11 April 2017 Cosmetics Industry 3 Key Asks Remain in the Customs Union until a Free Trade Agreement with the EU is reached A tariff-free market for the export / import of products, raw materials and commodities will be vital to safeguard an efficient supply chain. Provide a clear and reasonable phased implementation for changes to UK/EU trade from leaving the EU to signing a full Free Trade Agreement A reasonable phased implementation will minimise impact on business continuity and provide financial stability for companies. Avoid additional administrative trade barriers by securing Administrative Cooperation with EU Competent Authorities for cosmetics after the UK has left the EU A specific agreement for cosmetics will allow UK companies to maintain easy trade with the EU.

2 About the Cosmetic Toiletry and Perfumery Association (CTPA) Representing those who make, supply and sell cosmetic and personal care products, CTPA is the public voice of a vibrant UK industry. It has more than 175 member companies, of diverse sizes, from micro and SMEs through to multinationals, spanning manufacturers, distributors, contract laboratories and own brand retailers; and collectively represents between 80-85% of a UK market that was valued at 9.38 billion in 2016 (at the retail sale price). The Cosmetics Industry is Making an Impact The industry makes a significant positive impact on the economy, and wider society. Covering skincare; personal care; hair care; colour cosmetics; and fragrance, the industry contributes to good health and hygiene, through a diverse array of products, from sunscreen and toothpaste, to shampoo and deodorant. In 2016 the UK s export of cosmetics to the EU 27 was valued at 2.34 billion and 1.20 billion to non-eu countries. It employs 200,000 people in the UK (about the size of the population of Northampton). Behind the bottles and tubes in our bathroom cabinets lies an innovative and science-led industry that plays a vital role in public health, well-being and self-confidence; and makes a significant and growing contribution to the economy. 500 million people in Europe use cosmetic products everyday. Cosmetics help people feel more confident in their appearance, enhance their feeling of well-being and contribute to positive selfesteem. Dr Chris Flower Director-General of CTPA 2/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

3 Getting the Best from Exiting the EU The people of the United Kingdom have decided to leave the European Union and the UK cosmetics industry is working with the Government to ensure that, once the UK leaves the EU, our industry can continue to prosper. Our Main Trading Partner is the EU The UK cosmetics industry is seen as a vibrant exporter with the EU being its largest trading partner. The UK exports into the EU reached 66.2% of UK total exports in Consistent top export markets for the UK are the Irish Republic and Germany. In the same year, 67.1% of the UK imports originated from the EU, with France, Germany and Poland being in the top 5 importers. It is important to note that our second top importer is the USA, as the UK is often the country of choice for US companies to enter the EU market either via UK distributors acting as their chosen EU partners or to set up European head office. The European cosmetics market in 2015 was worth EUR 77 billion maintaining a slender but positive growth over This makes Europe the largest cosmetics and personal care markets in the world. Cosmetics Europe 3/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

4 Cosmetics Industry 3 Key Asks Remain in the Customs Union until a Free Trade Agreement with the EU is reached A tariff-free market for the export / import of products, raw materials and commodities will be vital to safeguard an efficient supply chain. Provide a clear and reasonable phased implementation for changes to UK/EU trade between leaving the EU and signing a full Free Trade Agreement A reasonable phased implementation will minimise impact on business continuity and provide financial stability for companies. Avoid additional administrative trade barriers by securing Administrative Cooperation with EU Competent Authorities for cosmetics after the UK has left the EU A specific agreement for cosmetics will allow UK companies to maintain easy trade with the EU. 4/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

5 Remain in the Customs Union until a Free Trade Agreement with the EU is Reached The success of our business in the UK relies on a tariff-free market, an efficient system with minimal delays and maximum efficiency for imports and exports for UK/EU trade. The supply chain process for the cosmetics industry is complex and for most companies it involves UK/EU cross border exchanges. If the UK were to leave the Customs Union at the same time as possibly leaving the Single Market without sufficient time to prepare, the risks to trade and to the UK and the EU economies would be very significant such as: queues at ports; concern about delays; risks that the UK s IT system for customs would be unable to cope; huge uncertainty around Rules of Origin principles and how these would be applied; and the uncertainty and fear of delays and bureaucracy would stifle investment. Tariffs The UK cannot operate in isolation The EU has bound tariffs at zero per cent in World Trade Organisation commitments for some categories of cosmetic products: perfume, shampoo, make-up etc. but excludes: Pre-shave, shaving or after-shave preparations (6.5%) Personal deodorants and antiperspirants (6.5%) Perfumed bath salts and other bath preparations (6.5%) After the UK has left the EU, although some finished cosmetics may not be affected in terms of tariff increases, there will be an indirect impact on all categories owing to tariff increases for raw materials (6-15%) and other commodities such as packaging materials, gifts, etc. Raw material price rises are already being seen with the lower exchange rate. Dr Chris Flower Director-General of CTPA CTPA and its members would like to see a tariff-free and barrier-free market for exports and imports of cosmetics, raw materials and commodities to continue. We therefore call on the Government to remain in the Customs Union, until the UK has agreed a Free Trade Agreement with the EU. 5/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

6 Provide a Clear and Reasonable Phased Implementation for Changes to UK/EU Trade Between Leaving the EU and Signing a Full Free Trade Agreement CTPA and its members seek clarity on phased implementation arrangements for the period between formally leaving the EU in 2019 and the signature of a UK/EU Free Trade Agreement. Such phased implementation is necessary to provide reassurances for trading relations with the EU already established as well as future exchanges. Product Development The value of UK cosmetics exported to the EU is 2.34 billion pounds. If raw materials become unavailable, product re-development can take over 4 years. Therefore in order to ensure business continuity and certainty for future investments the sooner such a phased implementation can be agreed the better it will be. We want legal certainty that ensures cosmetics placed on the market remain legally compliant after the UK has left the EU until a Free Trade Agreement is signed between the UK and the EU. Due to the time needed to re-develop products and the complexity of the supply chain, CTPA and its members call upon the Government to obtain a phased implementation as soon as possible to minimise impact on business continuity and provide financial stability for companies. A smooth exit from the EU can only be achieved by avoiding a cliff edge. It would be extremely detrimental for UK companies to be forced to recall existing compliant products should they no longer comply as a result of the EU exit. It would be equally disruptive to EU companies which export products to the UK. Dr Chris Flower Director-General of CTPA 6/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

7 Avoid Additional Administrative Trade Barriers by Securing an Administrative Cooperation with EU Competent Authorities for Cosmetics After the UK has Left the EU The industry relies on regulatory certainty in order to operate effectively in the UK and in the EU. For some SMEs, marketing with the EU represents over 60% of their turnover. There is a risk of duplication and unnecessary regulatory complexity unless the UK continues to apply similar regulatory rules to the EU and maintains administrative cooperation with EU Competent Authorities following the EU exit. The UK has always been a key player in developing EU cosmetics legislation. The EU Cosmetics Regulation No 1223/2009 strengthens the safety of cosmetic products and streamlines the framework for all operators in the sector. It is important that the Government continues to play a full part in EU Affairs right up to the moment of leaving the EU. The safety of consumers is the number one priority of the cosmetics industry, with manufacturers recognising their responsibilities and often going beyond their legal obligations. The UK has been following the EU cosmetics legislation for over 40 years. There is a high degree of co-operation between the industry and the regulatory authorities both in the UK and at European level to ensure that consumers are properly protected through legislative controls. Dr Chris Flower Director-General of CTPA Confidence in EU Cosmetics: Human Safety is the Primary Purpose of the EU Cosmetics Regulation The EU Cosmetics Regulation is based on Administrative Cooperation between Member States. This ensures a high level of consumer protection via collaborative in-market control surveillance. Only cosmetics for which a legal or natural person is designated within the EU/EEA Community as Responsible Person (RP) shall be placed on the market. For each cosmetic, the RP shall make available a Product Information File (PIF) to the Competent Authority of the Member State where the RP is located (as indicated on the packaging). A PIF is not required for each Member State where the product is marketed, there is only one PIF needed within the EU/EEA. This file is only available to this particular Member State for inspection. The Competent Authorities of the Member States in question shall cooperate with each other and with the Commission to ensure the proper application and due enforcement of this Regulation and shall transmit to each other all information necessary with a view to applying this Regulation uniformly. The Cosmetics Regulation is seen as a gold standard across the world and products complying with these requirements are highly considered outside the EU. CTPA would call on the Governement to maintain administrative cooperation with EU Competent Authorities after the UK has left the EU as well as implementing similar regulatory rules to the EU as part of any phased implementation deal and any long-term agreement. Such an arrangement would mutually benefit both the UK and 27 EU Member States. We feel that maintaning the high degree of co-operation between the UK Government and the EU Member States after the UK has left the EU is necessary to ensure that consumers will be properly protected through legislative control. 7/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

8 the responsible person based in the community If after leaving the EU the UK is not regarded as being already established in the European Community, UK companies exporting to the European Community Market will no longer be considered as responsible person based in the community and will have to set up arrangements with EU/EEA based companies to act as the RP on their behalf, or to acquire an office in an EU/EEA country. In addition, companies selling cosmetics in both UK and EU markets will potentially have to hold a PIF in the UK as well as in another European country in different languages. The implications of PIF duplication Administrative cooperation with EU Competent Authorities after the UK has left the EU to allow UK companies to act as a recognised RP under the EU Cosmetics Regulation will avoid extra costs, confidentiality risk of sharing the PIF with other stakeholders (in particular for SMEs) and challenges in post-marketing surveillance. 8/9 CTPA Getting the Best from Exiting the EU - 11 April 2017

9 Concluding Remarks CTPA has worked collaboratively with its member companies to assess the business implications of not remaining in the EU. We feel very strongly that the three key elements outlined in this paper will allow UK businesses to continue to compete effectively in this highly competitive and fast growing sector where we have a long proud history of innovation. It will provide confidence and encourage investment and support the two hundred thousand UK workers who depend on this sector for their livelihoods. We stand ready to discuss, elaborate and work with the Government and relevant stakeholders to ensure that this industry can take advantage of the new trading climate after the UK has left the EU. For more information please contact: Dr Chris Flower, Director-General Olivia Santoni, Director, Regulatory & International Services 11 April The Cosmetic Toiletry & Perfumery Association (CTPA) Limited Sackville House, 40 Piccadilly, London W1J 0DR Visit: The Cosmetic, Toiletry and Perfumery Association Limited Sackville House, 40 Piccadilly, London W1J 0DR tel: +44 (0) fax: +44 (0) info@ctpa.org.uk Director-General: Dr Christopher Flower Registered in London No Registered office: as above

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