How will this election affect the cosmetics industry? We analyze this year's legislative activity—and what we can expect to see in 2013.
It’s Tuesday, Nov. 6, and I’m finally going to give you a break from ubiquitous political banter to talk cosmetics … and politics. Though today marks a time when you can take a deep breath—your vote cast at your local nursing home, your country’s fate left in the hands of controversial proprietary intellectual property that counts your ballots—remember one thing before you shelf your inner politico until deep into 2016: this election will not only affect many aspects of our day-to-day lives but also the ways in which business is done in the natural products industry.
Okay, maybe cosmetics safety hasn't been top on either candidates’ agenda, but the fiery legislative battle emerging from the natural cosmetics industry rages on, and this election will likely have a significant impact.
Advocates have spent much of 2011 and 2012 fighting for stricter regulations of the use of chemicals in cosmetics, publicizing the once silent issue, leading to the first Congressional hearing on cosmetics safety in 30 years, and pressuring many mass-market manufacturers to clean up their acts. Still, updated legislation remains in limbo, leaving many questions unanswered.
How political is cosmetics safety?
Gay Timmons, a founding member of the Natural and Organic Cosmetic Alliance and founder of organic personal care ingredient supplier Oh, Oh Organic, speaks openly about politics and cosmetics. The increased Food and Drug Administration and Federal Trade Commission enforcement under the Obama Administration has helped boost “consumer protection and truth in labeling,” she said. She noted that there’s much more work to do—which wouldn’t happen with a change in administration.
“The Toxic Substances Control Act really needs to be updated and that won't happen if the administration changes as business interests seems to over-shadow safety,” said Timmons. “As long as the chemical producers are not required to give us safe and well tested chemicals, anything made from chemicals such as cosmetics and household cleaners will continue to be an unknown in terms of safety.”
One proposed update to this act is the Safe Chemicals Act, recently endorsed by the Senate Environment and Public Works Committee.
Even under current administration, Timmons sees serious flaws in cosmetics regulations, particularly because they do not assure us of safe chemical supplies. The most detrimental to small natural brands would be the “Republican-backed” Personal Care Products Council (PCPC) bill that would send safety decisions through the PCPC-funded Cosmetics Ingredient Review (CIR). The PCPC represents companies including Estée Lauder and Procter & Gamble, hence this bill would favor large corporations, Timmons said.
What’s the cost of tighter legislation?
But how would stricter Democrat-backed acts affect small natural brands? These include the highly publicized Safe Cosmetics Act, supported by the Campaign for Safe Cosmetics, which would undoubtedly make consumers safer and force a higher level of transparency. But would the Safe Cosmetics Act promote growth of or stifle small business? Are all natural personal care companies in the natural products industry in favor of the stricter safety regulations most aligned with a democratic agenda?
The answer seems to be mainly yes—with a dash of no. Members of the Campaign for Safe Cosmetics’ Compact for Safe Cosmetics, which have lobbied for increase regulations, are in the natural space. Among those vocal advocates, you’d recognize most on the shelves of your go-to natural products store.
However, there’s another sentiment about tighter legislation: that associated fees would stifle small, independent companies, many of which are in or entering the natural space. At the March 27 cosmetics hearing, Debbie May, CEO of soap ingredient supplier Wholesale Suppliesplus, said there are aspects of updated legislation that could have negative effects on small, independent manufacturers.
“We personally inspect each ingredient and have our hands in every part of the manufacturing process. We do not support reporting to FDA individual ingredients because we frequently buy small quantities of ingredients several times a week,” she said. “We want to make sure small businesses have the same opportunities to grow.”
She also said that if regulations vary from state to state there could be confusion and additional barriers for small businesses.
The long-term effects
As always, we have to look at the bigger picture. When it comes to the stricter cosmetic safety legislation more likely to pass under the Obama Administration, yes, there will be an associated cost that could be difficult for some small brands. But what will increased legislation do in the long-term? The fact that natural companies are already following safe and transparent practices—working closely with suppliers, getting independent testing on finished products, and disclosing every ingredient—means that updated legislation wouldn’t have a large impact on their day-to-day business (which means less overall investment needed to meet new standards).
What could be even more significant is that stricter regulations would further put pressure on large corporations to develop green chemistry that can produce safer, more cost-effective alternatives. This would make safe ingredient alternatives much more accessible to small, natural companies. Many natural brands argue that tighter legislation also encourages innovation (as opposed to arguments made about innovation and regulation in the supplements industry).
At the same time, some of the most impactful regulation we have seen over the past few years has been within the natural products industry itself, such as Whole Foods' "organic" policy and the stringent ingredient standards of various natural retailers. So, even in the absence of government action, I believe we can shape this category.
Regardless of the results, these issues are thriving. Long after #election2012 has faded from your social lexicon, it’s our job to keep these important conversations going.
What are your thoughts on cosmetic legislation? Leave your comments here or tweet me at @jessica_rubino.