CTFA announces a new independent cosmetics export council
The Cosmetic, Toiletry and Fragrance Association (CTFA) of South Africa is dedicated to providing its members with services to help conduct their business in an ethical, self-regulatory and responsible way. It is a widely- respected association with counterparts across the globe, each of which the CTFA has a working relationship with.
Something the CFTA has been involved in over previous years has been assisting its members with exporting products to other countries. ‘The original body that dealt with this was the South African Cosmetics Export Council, or SACEC,’ says Sally Gnodde the executive director of the CTFA from March 2010.
After the death of Carmen Botef who was in charge of this council, things have not worked as well so over the past three years, the CTFA has been working closely with the Department of Trade and Industry (DTI) with regard to establishing a new Cosmetics Export Council and have recently resolved problem areas and formulated a sound foundation with which to proceed,’ comments Gnodde.
The new council is the Cosmetics Exports Council of South Africa (CECOSA) which will be available and geared towards helping companies looking to expand their export business, or even companies who want to start exporting their products and brands to other markets and countries worldwide.
Registration should be final within the next couple of weeks with a selected board of approximately eight members and an appointed chairperson.’
Gnodde mentioned an issue that local companies are experiencing when considering to break into exporting to other countries; ‘One of the internal barriers to trade at the moment for our local manufacturing companies, is the ad valorem tax on luxury goods.
Cosmetics are currently classified as luxury items and therefore, are subject to South Africa’s indirect tax law and locally produced products are taxed as such. Companies are hard hit by ad valorem for products marketed locally. Although exports are exempt from this luxury ad valorem tax, the internal accounting and SARS collections have been problematic. So much so that certain company members have indicated they will contain their growth and not venture into exports on account of the complexity of the ad valorem taxation’.
‘This means that companies wishing to expand and export their products will be taxed on products for the local South African market but not those going to other countries. For most, this effectively means that the company has to run two different accounting processes - one for local goods and one for export markets. Aside from the logistical nightmare this presents companies with, itcan mean additional costs to the company exporting.’
Clarity is required on the ad valorem issues addressed with the DTI, the South African Treasury department as well as the South African Revenue Services, which could be lengthy process.
The CTFA is available to assist the council on a needs basis, the Cosmetics Export Council of South Africa (CECOSA) has been established as a Section 21 Company, it is designed as apublic-private-partnership between South African business and the Department of Trade and Industry, its purpose is to drive exports initiatives for the cosmetic industry in South Africa.’
Companies can approach the CTFA for technical and regulatory guidance and assistance in order to meet the requirements for advertising, labelling composition and safety of cosmetic products in South Africa. Compliance in turn, ensures that products are virtually ‘export-ready’ as regulations differ from country to country. Compliance with South African cosmetic regulations holds products in good stead to meet regulations elsewhere. It is the responsibility of the exporting company to ensure that they meet all regulatory requirements of the country they wish to export to.
The CTFA issues the compliant member company, according to the Compendium (available through the CTFA), with a Certificate of Free Sale (COFS). This document effectively aids exporting companies to gain access and entry to countries subscribing to regulations similar to the EU Cosmetic Directive as well as several other countries that may have their own regulations. The COPS accompanies shipping documents to the destination country for customs clearance purposes.
The CECOSA member, confident in their knowledge of product compliance, will be well placed to take part in international exhibitions and promotions geared to create export opportunities, supported and funded to a greater or lesser extent, by the DTL It is the Council’s objective to develop, support, grow and facilitate exports in the cosmetic industry through co-operation and expansion of the base of exporters for the prosperity and success of its members and South Africa as a whole.
‘This will benefit not only member companies but also the South African economy in general,’ says Gnodde. ‘Making the process of exporting easier and simpler through the CECOSA council, with the aid of the DTI, will undoubtedly result in higher revenues for South Africa in the export sector. Taking away the ad valorem tax will enable South African companies to expand and grow their manufacturing business which will result in job creation, training and upliftment, they will employ more people, especially in the semi-skilled and unskilled sector of the job- seeking communities.’
‘Cosmetics and toiletries are not luxury items. They are necessities that people need in order to maintain good personal hygiene and general well-being. Aside for the basic grooming needs such as brushing one’s teeth and taking a shower, the daily use of cosmetics gives a person confidence, uplifts their self-esteem, and gives them a sense of wellbeing. These are the people who are able to go out into the world and make things happen because they feel good about themselves. Cosmetics and toiletries - a luxury? No - a daily hygiene necessity enjoyed by all consumers across the board.
‘The South African industry of cosmetic brand owners and manufacturers, is already at a point where it is creating and manufacturing safe, innovative and effective products that compete on a global scale. These products and brands are at par, if not better, than many international brands out there and the Export Council will allow them opportunities and access to larger markets. They only have to take advantage of the benefits on offer from the Export Council and should not be afraid to get into the export business.’
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