Cosmetics and toiletries to Spain

(Last updated: 29 Apr 2010)

Trends and opportunities

The market

Spain is the fifth largest market for cosmetics and toiletries in the European Union and is valued at €7.5 billion. With a population of 46 million, the Spanish market is double that of the Australian market. In addition, Spain is the third most visited country worldwide, attracting more than 52 million tourists in 2009.

According to the European Cosmetic Trade Association, the Spanish cosmetics industry can be divided into five major categories:

• Perfumes
• Fragrances
• Decorative cosmetics
• Skin and hair products
• Various other toiletries

Skincare products lead this market with 26.3 per cent of total sales, followed by hair care (22.03 per cent), perfumes/fragrances (22.2 per cent) and toiletries (20.6 per cent). Decorative is the last category with 8.6 per cent of total sales. 

While imports account for 51 per cent of total sales within the Spanish cosmetics and toiletries sector, the Spanish beauty market in Spain is a mature market with well-established, well-marketed brands that have a loyal clientele.

Opportunities

Spanish consumers are becoming more health conscious. As such, the Spanish cosmetics and toiletries industry has seen strong growth of products that are positioned as natural or organic creating a strong opportunity for Australian producers to supply more high-quality, beauty products into Spain.

Emerging sub-sectors in the cosmetic sector include:

• All natural skin, body and hair products
• Aromatherapy products and natural oils
• New bath and spa products
• 'Cosmeceuticals' such as anti-ageing cremes, protection from UV rays, or anti-cellulite cremes
• Men’s health and beauty lines
• Innovative sun care products
• Innovative natural products for children

Competitive environment

Key suppliers of health and beauty products to the market include France, Germany, Italy, the UK and USA.

The Spanish companies Puig, Puig Beauty and Fashion, and Myrurgia (bought by Puig), hold a substantial share of the cosmetics market and also distribute products. Brands include Calvin Klein, Christian Dior and Armani.  

Major European companies selling in Spain are: L'Oreal, Sephora and Guerlain from France; Elizabeth Arden (Unilever) Dutch-British; Lancaster from the UK and Nivea, Henkel and Benkshire from Germany.

US companies including Estee Lauder, Avon and Revlon also have a stronghold within the import market. Japan's Shiseido has also entered the Spanish market, but in a more selective way.

Best known ‘natural’ brands in the market are Kiehls, Body Shop and Korres, which all have own shop presences.

New brands wanting to enter the Spanish beauty market often find it difficult to compete with these companies. As such, new companies often have to invest much time and resources into raising their brand-awareness within the market.

Tariffs, regulations and customs

As a member of the European Union (EU), Spain is regulated by European Directives. Information about European directives in this area can be found in the EU website. Latest reports and information on the directives can be obtained (for a fee) from the European Cosmetic, Toiletry and Perfumery Association.

Spain is part of the harmonised trade system of the EU. Common Customs Tariff (CCT) is applicable to goods from non-EU countries, including Australia. 

Companies wanting to enter the Spanish market must also comply with Spanish importing and selling regulations, and have their products and ingredients certified under Spanish law. This is in addition to regulations enforced by the European Union. For more information about Spanish import regulations and legislation visit the TARIC database.

Most duties are ad valorem (%), based on the GATT Valuation Code (approximate CIF value). Customs duties on cosmetics preparations from Australia vary according to product type, determined by a 'TARIC code'. For more information, visit the TARIC database.

If you are shipping any goods to Europe, you should obtain a written customs duty ruling, known as Binding Tariff Information (BTI). Getting a BTI is free and will prevent any conflict over customs or excise duty. A BTI is valid for six years.

Spain’s Value Added Tax (in Spanish IVA, Impuesto sobre el Valor Añadido) is a consumer tax equivalent to Australia’s GST. The Spanish VAT is 16 per cent and is requested by Customs on the entry of goods into Spain. Most cosmetics and toiletries attract 16 per cent IVA, however, some pharmaceutical products have a lower rate and medicines four per cent only.

Labelling requirements for Spain and the EU are similar to those of Australia and companies should inform themselves on the specific labelling requirements for each product, through the Spanish importer/distributor, prior to sending the products to Spain, to avoid problems with Spanish customs.

Industry standards

The EU has passed a Cosmetic Directive which all companies, including those in the EU, must adhere to. 

A summary of the labelling requirements is as follows:

• Must indicate name and address of the manufacturer or importer or distributor of production within the EU.
• Content in weight or volume at the time of packaging.
• Date of expiration if the shelf life is less than 30 months.
• Precautions to be observed in use.
• Reference for identifying goods (batch number).
• Function of product if unclear from presentation.
• List of ingredients in descending order of weight at time they were added according to International Nomenclature for Cosmetic Ingredients (INCI).

Spain also has its own set of laws surrounding the cosmetic industry that is referred to as the Royal Decree of 1997. These laws include specifications on imported cosmetics as follows:

• The importer must have approval from the Spanish Directorate General for Pharmaceutical and Health Products – Ministry of Health ('Direccion General de Farmacia y Productos Sanitarios' – DGFPS). This approval occurs when the quality of the product itself and manufacture can be proven.
  
  
• Must include an approval of the activities of the importer, and this approval can be obtained by a procedure outlined in a document named La Circular 2/99 from the DGFPS.
  
  
• To commercialise the goods, two requirements must be met – information about possible medical effects; and a contact within Spain, either a head office or a corporation in which products are imported and the ways in which to contact them.
  
  
• Labelling and advertising regulations are in strict conformance with that of the Cosmetics Directive of the EU, and include the following, which are specified again in the Spanish cosmetic Royal Decree:
  • If animal experimentation was used, the experiments and the medical effects must be clearly indicated
  • The item cannot be placed in an area where it could possibly be confused with medical treatment or foodstuffs.

Information concerning these laws and regulations can be obtained by contacting the Spanish Ministry of Health and Consumption, (Ministerio de Sanidad y Consumo).

More information

Spanish Directorate General for Pharmaceutical and Health Products - Ministry of Health
Direccion General de Farmacia y Productos Sanitarios
Del Ministerio de Sanidad y Consumo
Paseo del Prado, 18-20
28014, Madrid
Spain
Tel: +34 91 596 1089
Fax: +34 91 596 4480

Additional detailed information on customs duties may be obtained from Taric S.A.

Marketing your products and services

Market entry

Like many other Western European markets, it is essential to deal with a local distributor or agent who is familiar with European Union (EU) and Spanish import regulations and marketing practices.

Distribution networks are highly segmented and therefore it is common to have several distributors to cover the mainland territory and islands. Given the strength and maturity of the cosmetics industry, manufacturing under licence or joint ventures with local companies are other viable options for Australian suppliers looking to enter the Spanish market.

The Spanish franchising market is currently the second largest franchise market in Europe and there could be room for innovative beauty concepts.

The mass distribution channel dominate cosmetics and toiletries sales in Spain:

• El Corte Ingles, is Spain's largest department store and dominates the market with over 300+ stores throughout Spain and Portugal.
• Hypermarkets – Carrefour and Alcampo
• Supermarkets – Eroski, Mercadona, Dia and Caprabo

Despite the large volumes sold via the mass distribution channel, many Spanish consumers still use traditional channels to purchase their cosmetic and toiletry products such as perfumery stores (perfumeries), pharmacies, and beauty and hairdressing salons, where they receive more personal attention and advice from trained staff.

Spanish pharmacies (either franchise chains or privately owned) tend to specialise in European brands sold exclusively through pharmacies, such as Vichy, Isdin and RoC, but many also sell homeopathic and natural/organic cosmetics. It should be noted that Spanish pharmacies tend to sell pharmaceutical and medical products only, and do not usually have large varieties of cosmetics or toiletries as do Australian pharmacies.

Thermal spas and health resorts are another promising outlet for the right products. Popular spas are located throughout Spain, especially in the areas of Galicia, Aragón, Castilla y Leon & Castilla – La Mancha, and all also offer beauty treatments.

Patrons are generally willing to pay higher prices for innovative and unique products. (Source: Spanish Thermal Springs & Spa Association – Spanish only)

Distribution channels

Cosmetic and toiletry products are distributed through five main channels in Spain:

• Mass distribution – 49%
• Specialised distribution – 28%
• Pharmacies – 9%
• Hairdressers - 8%
• Direct sales via catalogue or the Internet – 6%

The mass distribution channel in Spain accounts for almost 50 per cent of total sales via El Corte Ingles, and hypermarkets Carrefour and Al Campo.

The specialised stores called perfumerías, such as Body Bell, Gilgo, Marionnaud, Juteco and Sephora, account for a considerable portion of the market share in sales.

A new culture of spa and health/fitness centres is currently emerging in Spain and high quality/natural beauty products are now being commercialised through this more specialised and personalised distribution channel.

Links and industry contacts

Cosmetics and toiletry-related resources 

Spanish Agency for Medicines and Health Products (Agencia Espanola de Medicamentos y Productos Sanitarios – www.aemps.es
The European Cosmetics, Toiletry and Perfumery Association – www.colipa.com
Regulatory Association for the Advertising Industry – www.autocontrol.es
The Spanish Cosmetics & Toiletries Association – www.stanpa.com
Spanish Ministry of Health and Consumption (Ministerio de Sanidad y Consumo) – www.msc.es/en/home.htm

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au