Exploring China's new cosmetics claims legislation

The Guideline Principles for Efficacy Claim Verification of Cosmetic Products regulation will respond to the needs of a rapidly changing market

Authorities in China are developing new regulations for efficacy claims – alongside other regulations covering labelling and ethics – which, when passed, will have a broad-ranging impact for domestic and foreign cosmetics manufacturers. The proposed regulations are aimed at standardising the industry and providing a basis on which prosecutions can be brought in order to reduce safety concerns. They also provide a framework for further alignment with international standards, notably those of the European Union (EU).

These Guideline Principles for Efficacy Claim Verification of Cosmetic Products were announced by the National Institutes for Food and Drug Control in November 2015, launching a public consultation period that closed on 31 March 2016. No date for the introduction of regulations has been announced, though an analyst in China told SPC that she expects it to be this year.

The regulatory update comes as China’s cosmetics market continues to grow fast. Total retail sales of skin care and make-up products reached Chinese yuan renminbi RMB160.8bn (US$24.1bn) and RMB25.1bn ($3.7bn) in 2015, gaining year-on-year growth of 6.7% and 10.9% respectively, according to Euromonitor International.

The market is dominated by foreign multinationals. According to analysis of China Food & Drug Administration (CFDA) statistics for 2015 by HKTDC Research, domestic brands concentrate on the mid to low end of the market, while joint ventures and foreign-invested companies cover the high end, accounting for nearly 60% of total sales and nearly 90% of sales value. Skin care imports to China rose 41.5% to $2.7bn in 2015, according to Global Trade Atlas figures. Sales of domestic cosmetics brands are growing also – but at a lower rate of around 10-15% in 2014.

This growing market has inflated safety concerns. Stories about consumers being injured by substandard products surface regularly in China’s media and cosmetics complaints received by the CFDA are growing rapidly, from 1,570 in 2012 to 18,812 in 2015. The proposed guidelines do not cover marketing, but advertising regulations brought in last year were intended to counter spurious claims. However, a search on online sales platforms (such as Taobao) revealed not only products on sale making such claims (for instance, “look 18 again”) and scans of supposed lab tests, but also sheets of stickers for sale bearing claims in the event that a manufacturer or retailer wanted to augment labelling for existing products.

What to expect

The Guideline Principles for Efficacy Claim Verification of Cosmetic Products sets out verification methods including human trials (right through to rules on how to advertise trials to potential candidates) and in vitro tests. They state what types of tests must carried out in what types of laboratory for claims to be made, and even what courses laboratory staff must take (no fewer than ten covering dermatosis and cosmetics science) and the amount of experience staff need.

Certain verification tests can be performed in third-party laboratories, for instance, the company’s own, whereas others have to be done in listed designated laboratories.

Under the system, efficacy claims will be graded from ‘1’ to ‘5’, with ‘1’ attaining clinical research based on large-scale double-blind, randomised control data, through to ‘5’, with claims based only on related literature. Manufacturers and distributors will be responsible for substantiating efficacy claims.

These regulations are in line with a Technical Safety Standard for Cosmetics which comes into effect on 1 December and states that any ingredients that are new to China and therefore not yet approved cannot be used until approved by the CFDA and that products new to China need to be registered and tested by a CFDA-designated lab to be checked against packaging claims.

Another set of principles going through consultation is Administrative Measures on Cosmetics Labelling, expected to include rules such as an end to the adding of Chinese labels to products for imports, as all imported products should be appropriately packaged for China. Further examples of forbidden wording have been added to the list.

“What’s most important is considering the prevention of safety issues,” the Secretary General of the China Association of Fragrance Flavour and Cosmetics Industries, Zhang Jingyuan, told SPC. “The Chinese cosmetics market is large and varied, so to have several or a dozen or so non-complying products or batches is normal, but they only make up a very small amount of China’s cosmetics market.”

April Guo, Head of Cosmetics Regulatory Affairs at Hangzhou-based advisers Chemical Inspection and Regulation Service (CIRS), expressed a similar belief to SPC.

“It is difficult to control product safety, especially for efficacy claiming. In addition, there is no specific regulation for the management of efficacy claiming. So we suppose that’s the main drive in issuing this regulation,” she said.

According to Zhang, once the claims regulations are finalised, “there will definitely be an impact [on the industry], because China’s cosmetics market is gradually standardizing – these rules are a type of governance. Putting them forward will naturally create some pressure for those companies that previously haven’t really abided by regulations, as up till now, with no standards in place, there has been no way to punish these people. But now there are rules. If you break them, then there’s a basis for punishment.”

According to Guo, enforcement for imports will be through random testing: “For custom clearance of imported cosmetics, the port CIQ [China inspection and quarantine officials] will do random testing of products for heavy metal and microbiology.”

Part of the expected enforcement is from initial product registration according to Zhang, “If you want to manufacture a product, you have to declare this with the government and provide the necessary documentation for registration, meaning we’re gradually standardising and consulting international norms and standards, for example the EU’s new standards. Combining them with China’s current situation, we’re carrying out some revisions…” He said that officials were also discussing harmonisation issues with the Association of Southeast Asian Nations (ASEAN).

The upcoming regulations sit within a wider context of new regulations in China covering product, manufacturing and testing standards in industries such as textiles, clothing and vehicles. Industries that have a direct or indirect (such as via pollution) effect on consumers and workers are being targeted with more regulation and tighter wording within legislation.