L’Oréal urged the European Commission to ease what it described as an “ever-changing” regulatory burden on business, raising particular concern about new European Union rules that will make the cosmetics and pharmaceutical industries pay for water pollution.
In a letter to European economy commissioner Valdis Dombrovskis, the French beauty multinational warned that the bloc’s complex rule book was holding back investment and innovation.
The company said Europe needed a more “predictable and proportionate” framework if it was to remain competitive globally.
In a January 9th letter, Nicolas Hieronimus, chief executive of L’Oréal, said Europe needed to “champion the interests of its industries on the world stage to prevent them falling behind global competition”.
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The French business executive said European Commission president Ursula von der Leyen’s plan to simplify Brussels’ rules was welcome.
“Europe needs a clear, predictable and proportionate regulatory framework, one that enables companies to invest in innovation, and not just ensure continued compliance with ever-changing regulations,” he told Mr Dombrovskis.
The long-time Latvian commissioner has been asked to oversee the “simplification” effort by the EU’s executive arm, which has seen the commission propose to pare back various different regulations.
In his letter, Mr Hieronimus said the cosmetics industry had “particular concern” about the EU’s Urban Waste Water Treatment Directive.
The recent regulation puts new obligations on EU states to remove harmful micropollutants from urban waste water. The law will make two big polluters, the pharmaceutical and cosmetic industries, pick up most of the tab for the increased cost of waste water treatment in cities.
Both sectors have been lobbying against the law, seeking to take advantage of new momentum inside the commission’s Berlaymont headquarters to boost Europe’s economic competitiveness, by cutting back EU red tape.
The pharmaceutical industry has pressed Ms von der Leyen’s commission to water down the legislation, asking for a cap on the financial contributions required of pharma firms. The pharma sector is also challenging the law in the EU courts.
[ Pharma lobbyists cash in on Brussels red tape rampageOpens in new window ]
Cosmetics Europe, an industry body representing Chanel, LVMH, Estée Lauder, L’Oreal, Procter & Gamble and Unilever, said the new waste water law would levy a “disproportionate” financial burden on the sector.
In a 9th January letter, John Chave, director general of Cosmetics Europe, asked Mr Dombrovskis to reassess the regulation, which he said was “raising great concern for the economic stability and competitiveness of our business”.
Mr Chave said estimates of the likely bills companies would have to pay were “extremely high”. It was unfair that the cost of modernising Europe’s urban water treatment plants fell solely on the pharma and cosmetic sectors, he wrote.
The correspondence between industry and Mr Dombrovskis was released to The Irish Times following an access-to-information request.
Cosmetics Europe complained that “incoherence” across the EU’s vast book of regulations meant companies in the beauty industry were being “forced to divert financial and human resources from innovation to compliance”.
That was putting the ability of European businesses to remain economically competitive at risk, Mr Chave wrote.
“Historically, the EU has led the global market for cosmetics, perfumes, and personal care products,” he said. It had since been overtaken by the US and was “in danger” of falling behind China, “at least partly due to the increasing regulatory burden on the sector,” he said.
Separately, documents show German carmaker Volkswagen told Mr Dombrovskis the company supported the EU’s ambitious climate plans, but needed some leeway.
In a January 14th letter, Oliver Blume, Volkswagen chief executive, asked for “flexibility” to be shown to the industry while it made the transition towards electric vehicles over the coming years.
Two months later, under pressure from the automotive industry, the commission agreed to delay fines on carmakers for failing to hit 2025 emissions reduction targets, by two years.
