Several Cosmetics Companies was Fined Due to Strict Regulation on Cosmetics in China

With Estee Lauder recently fined $376,300 in China and Avène being punished for illegal advertising in China, cosmetic claims have become a top priority in the regulation of China’s cosmetics industry.

Recently, Estee Lauder was fined $376,300 in China and then Avène was also punished for illegal advertisements in China. According to CHAILEEDO incomplete statistics, a total of 22 cosmetic companies have been punished for improper advertising in China since 2021 with penalties ranging from $47.4 to $376,300, including many internationally renowned companies, such as Estee Lauder, P&G and Coty.

The specific violations of the above companies can be divided into two categories, one belongs to false and exaggerated propaganda, which cannot provide the basis of efficacy; the other is because of the use of prohibited words. Among these 22 companies, Estee Lauder had the highest fine, with a single fine of US$376,300.

According to the penalty decision, Estee Lauder was fined $376,300 for improperly advertising the data of “skin metabolism product type recovery” as “youth index recovery” in the test report, and was eventually fined double the advertising cost. In addition, in June 2021, Estee Lauder was also fined $63,200 for misleading consumers by exaggerating the efficacy of its products, involving brands such as Clinique and Origins.

According to China’s new cosmetic regulations, efficacy claims for cosmetics should be based on adequate scientific evidence, and the supervision and inspection and punishment of violating companies will undoubtedly improve the Chinese cosmetics industry’s attention to efficacy evaluation. At the same time, cosmetic banned words are also the focus of regulation in China’s cosmetic industry.

As early as 2010, National Medical Products Administration issued the “Notice on the issuance of cosmetic naming regulations and naming guidelines”, a document that clearly indicates 11 types of words that are prohibited from being expressed or used in the names of cosmetics. For example, absolute word meanings; false word meanings; and medical terms. In 2019, National Medical Products Administration re-iterated the emphasis on 10 categories of prohibited words through the article “Identifying Illegal Claims and False Propaganda for Cosmetics”.

However, according to the fined cases compiled by CHAILEEDO, there are still companies stepping into the mines, and the three types of prohibited words that appear more frequently are extreme words, medical terms, and stem cell beauty, which were called off by the Chinese State Drug Administration.

It is worth mentioning that more than 20 fines were issued, and more than 80% of the penalties came from the Shanghai District Market Supervision Administration.

The number of cosmetic companies in Shanghai has grown rapidly over the past 10 years, with international companies such as Estee Lauder, L’Oreal, Procter & Gamble, and many up-and-coming Chinese cosmetic brands gathered here.

In response to the phenomenon of a higher proportion of cosmetics companies being punished for improper publicity in Shanghai, a senior cosmetics industry source said that Shanghai is the first local bureau to take the lead in enforcing the regulations in full and in strict accordance with China’s “Regulations on the Supervision and Administration of Cosmetics”. Generally speaking, each local market supervision bureau has a different focus on enforcement, and the Shanghai Bureau of Market Supervision has a tighter and more sensitive focus on product claims, so more companies are punished compared to the other side. Guangdong, another major province where cosmetic companies gather, is a major cosmetic production town, covering mostly cosmetic manufacturers thus the local market supervision bureau inspects mainly the production side of the problem.

Many industries believe that the penalties are not strong enough and the cost of breaking the law is too low, leading many companies to take the risk. However, the above-mentioned fined cosmetic companies are also reminding the industry that the era of cosmetics barbaric growth has passed, and there are laws to follow, and standardization, transparency and high quality have become the trend.



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