Crisis and tax increases reduce sales of toiletries and cosmetics

In 2016, the sales of products in the sector of personal hygiene, per-smoke and cosmetics, known by the acronym HPPC, had real fall 6%, totalling R $45 billion, according to Market data from Brazilian Industry Association for personal hygiene, perfumery and cosmetics (ABIHPEC). Although negative, the result was better than the year before, in which the reduction surpassed 9%. The main causes of the fall in consumption were the economic recession, the political crisis, the currency appreciation and tax increases.
"The industry of HPPC follows engaging efforts to overcome the moment that we are living in Brazil and, despite the fall, we can deliver a better result than in 2015," said the Chief Executive of ABIHPEC, João Carlos Basilio.
The elevation of taxes affected several products in the industry, leading to higher prices to the consumer. This movement started in 2015, when several Governments with imbalance in their accounts decided to collect more taxes from essential products for the health and well-being of the population. "The sector was penalized VAT increase in 22 States and the Federal District, in addition to the strong impact caused by the unfolding of the IPI for the Distributor industry", says the ceo of ABIHPEC.
In some cases, the increases were extremely high. In Pernambuco, the tax rate on 47.1 percent rose deodorants. The Paraná raised in 108.3% the ICMS on sunscreen, fundamental item on the prevention of skin cancer. The largest impact occurred in tribute of toothpaste sold in Minas Gerais: elevation of 125%.
In fact, this was one of the items that most had reduced sales in the Country last year. " Only the toothpaste is essential for oral health care, had 4.6% volume drop. From the point of view of health of Brazil, means that we are taking a step back, "Basilio.
The CT sector is one of the most dynamic economic segments of the brazilian economy. He gathers 2,642 companies registered in the national health surveillance agency (Anvisa), large locking contention by consumer preference. Competitiveness makes the sector is the second more invests in innovation in the country – and the values has been growing. To give you an idea, this investment nearly tripled over a period of 5 years: R $600,000,000 in 2010, came to R $1.7 billion in 2015. The segment is also an important generator of job opportunities. Adding workers of industry, trade and service sector of HPPC, are Brazilian 5,800,000.
Due to the strength and importance of the products in the lives of Brazilians, the segment was one of the more they grew in recent decades. Recorded 23 consecutive years of increased sales, which were only stopped from 2015. The Outlook is for growth. "The Brazil follows as one of the most important world markets and the consumer recognizes the essentiality that articles of personal hygiene, perfumery and cosmetics pose to the maintenance of health and well-being," said Basil. "We will continue working hard to innovate and deliver products that Brazilians need."
Brazil is the world''s 4th largest market
While the brazilian economy as a whole comes between the eighth and the new position in the world rankings, the HPPC segment appears in a better place. In 2016, occupied the fourth place. This shows the importance that the industry''s products have for Brazilians-an essentiality which, unfortunately, has not been taken into account by Governments seeking the tax increases the solution to your fiscal imbalance.
Check out the 10 biggest world markets and Brazil''s position on the main categories of HPPC.