New PwC Study Shows Increased Economic and Social Contributions of the Personal Care Products Industry in China– Study projects annual growth rate of 12% for the industry

The Personal Care Products Council today released a new study by PricewaterhouseCoopers (PwC) on the economic and social impacts of the personal care products industry in China. The study found the industry makes important contributions in the areas of research and development, employment of women, environmental sustainability, charitable contributions, and international trade.

Based on 2008 data, the study found that the industry was directly or indirectly responsible for the employment of more than 2.5 million Chinese workers, accounting for 53 billion RMB in labor income and contributing 164 billion RMB to the Gross Domestic Product (GDP). PwC has projected an annual growth rate of 12.0 percent for the industry through 2020.

Lezlee Westine, President and CEO of the Personal Care Products Council (PCPC), was in Beijing to share the study. “China is an essential marketplace for the global cosmetics industry,” Westine said. “Chinese families use products every day in their beauty and grooming routines, and demand the highest quality. The manufacture and distribution of personal care products is an increasingly important sector of the Chinese economy, and the industry offers new opportunities for women, who represent 80 percent of the industry’s workforce.”

Mr. Zhang Jingyuan, Secretary General of the Chinese Association of Fragrance, Flavors and Cosmetic Industries (CAFFCI), praised the study, saying, “PwC has highlighted the vital role cosmetic companies play in the Chinese economy. The industry is a growing source of employment in China, and is responsible for an increasing share of exports and investment in manufacturing, research and development.”

Personal care products include a wide range of consumer goods dedicated to health, hygiene, grooming and beauty, including perfume, sunscreen, hair and skin care products, cosmetics, and dental care products. These products are consumer staples for Chinese families, especially among the growing middle class. Companies in the industry research, develop, produce, market and distribute personal care products for use at home and in salons and spas. While globalization has led to a rise in imported products, domestically manufactured personal care products represent the majority of the Chinese market, where exports exceed imports.

In addition to the economic growth the personal care products industry supports, the industry makes several important social contributions to China. Women make up 80 percent of the workforce in the industry, compared to an average of 35 percent across the entire Chinese workforce. China’s daily care products industry, which includes personal care products, invests significantly more in R&D than other similarly sized manufacturing sectors. The industry is also a leader in energy efficient manufacturing practices, and many of the industry’s manufacturers are using renewable energy sources and leveraging technology to conserve water use and minimize waste.

The personal care products industry also makes charitable contributions that benefit public welfare in China, with a particular focus on disaster relief, health, education and cultural programs.

The PwC study, titled “Economic and Social Contributions of the Personal Care Products Industry in China,” used 2008 Chinese Economic Census data, PwC research, and the Mudan model of the Chinese economy to project the economic impact. Key findings include:

  • Industry Supports Millions of Jobs: The personal care products industry accounted for approximately 2,554,700 jobs in China, according to 2008 data. Those jobs earned 53 billion RMB in income.
  • Industry Makes a Large Contribution to the GDP of China: In 2008, the industry’s total value-added impact on the GDP of China was 164 billion RMB.  This is projected to reach 502 billion by 2020.
  • Industry is Growing Rapidly: PwC projects the personal care products industry in China to grow at an average annual rate of 12.0 percent between 2008 and 2020. This pace is well ahead of the overall projected growth rate of the Chinese economy.
  • Industry Employment Diversity is Strong: The percentage of female employees in the personal care products industry is approximately 80 percent, significantly higher than the national average of 35 percent female employees.
  • Industry Invests in Increased R&D Spending: The industry spent 887 million RMB on R&D activities in 2008. The number of R&D projects grew by 144 percent between 2004 and 2008.
  • Industry Leads in Environmental Sustainability: The industry is a leader in energy efficiency, pollution abatement and cleaner production, and reducing carbon emissions.
  • Industry Generates Significant Trade Surplus: While industry-wide import and export data is not available, data for shampoo, bath products, and body soap show that the industry is a net exporter. For example, Chinese shampoo exports grew by 29.4 percent in 2010. Together, imports and exports grew for these products, reconfirming both China’s role as a global manufacturing hub, and growing Chinese consumer demand for high-end products.
  • Industry Charitable Contributions Are High: Personal care products companies make significant charitable contributions in China. The Estee Lauder Companies has made significant contributions in China through The Breast Cancer Research Foundation and The Breast Cancer Awareness Campaign.  Perfect China, headquartered in Zhongshan, Guangdong province, has built more than 12,000 water wells and 1,300 small scale water supply systems in northwestern China. Colgate has promoted dental care to 100 million children. Amway has partnered with 18 top universities and donated 9.8 million RMB to encourage students to become volunteer teachers in poor rural areas. Dabao has donated more than 200 million RMB to charity, including more than 5 million RMB to help children from disabled families.

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Statement by Farah Ahmed, Chair Personal Care Products Council Sunscreen Task Force Response to the 2012 EWG False Allegations Regarding Sunscreen

“Consumers can be confident that sunscreen products in stores today – regardless of whether they bear the pre or post FDA sunscreen final rule compliant label – when used as part of an overall safe sun regimen, are safe and help protect against skin cancer, premature skin aging, and other damaging effects of the sun.

“The Environmental Working Group’s (EWG) latest effort to pressure retailers to remove sunscreens from store shelves will create a shortage of products, which would clearly result in putting consumers at risk and undermining public health.  The dangers of the sun and the importance of daily sunscreen use is strongly supported by the American Academy of Dermatology (AAD), the Skin Cancer Foundation, and other recognized health advocates. In fact, even EWG acknowledges that consumers should use sunscreen.   Furthermore, removing safe and effective sunscreens currently on the market would create significant and unnecessary economic and environmental waste.

“In August 2011, the Council requested FDA to extend the compliance date for its final sunscreen rule out of a serious concern for a potential shortage of sunscreens on the market because industry was unable to complete transitioning their product labeling before the deadline.  Echoing the same concern, FDA provided an additional six months for industry to implement the new rule. The final sunscreen rule requires that any product labeled on or after the compliance date meet the requirements of the rule. In other words, older products can remain on the market and when sold-out be replaced by products with the new label.   This further validates that sunscreens with both new and old labels are safe and effective.

“Consumers should know that we are not aware of any companies that are reformulating to meet the new final sunscreen rule.  For example, a product labeled as “SPF 30” and “protects against UVA rays” would be labeled “SPF 30” and “Broad Spectrum” according to the new final rule.

“Regarding claims such as “sunblock” (vs. sunscreen), “sweatproof” (vs. “sweat resistant”), and “waterproof” (vs. “water resistant”), EWG has provided no reliable data or information to support that consumers have been misled by these terms in any way, and they falsely assert that FDA has considered these terms false and misleading since 1990.  In fact, these terms were created by FDA and were part of FDA’s original sunscreen rulemaking. FDA has been reconsidering these terms, allowing companies flexibility and choice regarding use of these terms in the interim. With the final sunscreen rule, we now know which terms the agency has chosen, but the performance of the products remain the same whether they are “sunscreens” or “sunblocks”, or “waterproof” vs. “water resistant 80 minutes”.

“The dangers of the sun are clear and widely recognized by scientists and dermatologists. The World Health Organization and the National Institutes of Health identify solar UV radiation as a carcinogen.  A single bad burn as a child increases the skin’s susceptibility to damage and skin cancer throughout life. Consumers can be confident that sunscreen products when used as part of an overall safe sun regimen are safe and will help protect them from skin cancer, premature skin aging, and other damaging effects of the sun.

“For more information about the safety and efficacy of sunscreens, please visit www.cosmeticsinfo.org or the U.S. Food and Drug Administration’s website at: www.fda.gov.”

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Statement by Farah Ahmed, Chair Personal Care Products Council Sunscreen Task Force Response to the 2012 EWG Suncreen Report May 15, 2012

“Consumers can be confident that sunscreen products, as part of an overall safe sun regimen, are safe and will help protect them from skin cancer, premature skin aging, and other damaging effects of the sun.

“Allegations contained in the Environmental Working Group’s 2012 sunscreen report disregard or distort an extensive body of scientific research on the safety, efficacy and health benefits of sunscreen and could confuse consumers and discourage them from using sunscreen. With skin cancer rates on the rise, this does a great disservice to consumers and undermines the efforts of public health advocates to educate people about the importance of using sunscreen as part of their sun protection regimen.

“By challenging the medical and scientific consensus that sunscreen products are safe and effective, the EWG report defies the scientific assessments of sunscreen products and ingredients by regulatory authorities in the U.S., E.U., and Canada.  In the U.S. sunscreens are regulated as over-the-counter drugs by the FDA and are subject to rigorous safety and efficacy substantiation.

“Experts at the Centers for Disease Control, the American Academy of Dermatology, the Skin Cancer Foundation, and health care professionals throughout the world also emphasize the safety of sunscreens and the importance of their use as part of a safe sun regimen.

“Among the numerous allegations made in the report is the assertion that retinyl palmitate, an ingredient used in some sunscreens to condition and moisturize the skin, is unsafe. Retinyl palmitate, more commonly known as Vitamin A, has been used safely for many years in various personal care products, including sunscreen. It is approved by the FDA for use as a food additive and has been reviewed twice by the Cosmetic Ingredient Review and found to be safe. A large body of evidence suggests that retinoids have anti-cancer effects in humans.

“EWG also questions the safety of an FDA-approved active ingredient in some sunscreens called oxybenzone.  Oxybenzone, also known as Benzophenone-3, protects the skin from harmful UV rays. FDA and regulatory authorities in Canada and the European Union have approved the use of oxybenzone as a safe and effective sunscreen ingredient. While EWG alleges a connection between oxybenzone and hormone or endocrine disruption, current scientific research does not support such a link in humans.

“The 2012 EWG report also claims that many sunscreen ingredients break down significantly when exposed to sunlight and quickly stop working. This is simply not true. Sunscreen formulators take into account the physical and chemical properties of the active ingredients to ensure they perform effectively and meet all established FDA requirements, to ensure they are effective when purchased by consumers.

“Unprotected sun exposure increases cancer risk, and sunscreen has been scientifically proven to reduce that risk.  Nevertheless, EWG’s report cites increasing skin cancer rates and questions sunscreen efficacy in fighting this dangerous disease.  The report fails to consider that higher skin cancer rates are the result of excessive unprotected sun exposure from several previous decades as well as the ability today to better track, monitor, and report the occurrence of the disease.

“The dangers of the sun are clear and widely recognized by scientists and dermatologists. The World Health Organization and the National Institutes of Health identify solar UV radiation as a carcinogen.  A single bad burn as a child increases the skin’s susceptibility to damage and skin cancer throughout life. Consumers can be confident that sunscreen products, when used as directed and as part of an overall safe sun regimen, are safe and will help protect them from skin cancer, premature skin aging, and other damaging effects of the sun.

“For more information about the safety and efficacy of sunscreens please visit http://www.personalcarecouncil.org/sites/default/files/FactsAboutSunscreen.pdf the Personal Care Product Council’s safety website: www.CosmeticsInfo.org or the U.S. Food and Drug Administration’s website at: www.FDA.gov.”

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