Via Investing.com, April 12:
PARIS/MILAN (Reuters) -European perfume- and cosmetics-makers face shortages of paper, glass, and some key oils and alcohols, as Russia's invasion of Ukraine adds further disruptions to the supply chains for beauty products, driving prices higher amid robust demand.
Like the food industry, the $500 billion global cosmetics sector is grappling with fallout from the war because producers use alcohol derived from grains and organic beets to make perfumes, and sunflower-seed oils to make cosmetics - all key crops from Ukraine.
At the same time, the energy crisis sparked by the war has pushed glass and paper prices through the roof, while China's COVID-19 lockdowns have thwarted companies' ability to obtain packaging components for $100-a-bottle scents and $30 lipsticks.
"We're in crisis management mode when it comes to these subjects of sourcing," Emmanuel Guichard, secretary general of French cosmetics association FEBEA, told Reuters in an interview.
Consultancy firm Bain & Company calculates higher prices for packaging, energy and raw materials have driven up production costs in the cosmetics industry on average by 25%-30%, posing a challenge to mass cosmetics producers, though demand for personal care products remains strong, according to partner and EMEA luxury practice leader Federica Levato.
Italian fragrance manufacturer ICR expects sales this year to surpass pre-COVID levels, but the family-owned maker of Bulgari and Salvatore Ferragamo perfumes is wrestling with a yearly 30% spike in the cost of alcohol, on top of a 10% rise in the cost of glass and paper, Vice President Ambra Martone said....
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