Cosmetics are not cheaper despite abolishment of excise duty

05-04-2007, 11:23

Warsaw (Puls Biznesu) – Although 10 percent excise duty for color cosmetics was levied, producers have not cut prices.

When the government withdrew the excise duty at the end of last year, producers promised lower prices of lipsticks and other make-up products. Bell from Jozefow near Warsaw was one of the companies.

“With today’s inflation, consumers should be happy that we are not raising prices”, Maria Dera from Bell said.

Inflation in Poland amounts to 1.9 percent annually and is one of the lowest in Europe. Bell used to spend PLN 80,000 (EUR 20,720) monthly for the excise duty.

“We’ll spend these funds for better, nicer packages and new lines”, Maria Dera said.

The other producers acted similarly.

“We have not changed prices. We have invested the funds in the quality of our products. We are improving the packages”, Ewa Wrzesinska, the founder of Vipera Cosmetics added.

Specialists approve of this.

“Sometimes low-price cosmetics deter the clients because of the packages. That’s why producers should care for esthetic outlook to make their products more competitive to more expensive ones”, Blanka Chmurzynska, the general director of the Polish Association of Private Employers of the Cosmetics Branch commented.

Big companies are not cutting prices either.

“In January, we launched a storage house in Bielsko Biala. The center will offer logistic services for 12 Central and Eastern European countries. When we decided to build it, we took into account the government’s promises to levy the excise duty. The project is worth EUR 3m”, Mariusz Grajda from Coty Polska said.

The company employs 100 people in the storage house and is going to employ 170 more people.

Avon invests in marketing.

“The prices of products in the catalogues were not changed but we are able to offer discounts and gifts to our clients”, Monika Golebiowska from Avon said.

(PLN 1 = EUR 0.259)

© ℗

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