EghtesadOnline: A total of 13,765 tons of cosmetic products and toiletries worth $10.6 million were exported from Iran to 21 countries during the first five months of the current Iranian year (March 20-Aug. 21), according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“Our main exported products were shampoo; facial, skin and nail cosmetic products; sunscreen creams; fixator, hairstyling products, toothpaste and soap,” Rouhollah Latifi was also quoted as saying by Fars News Agency.
The official noted that Afghanistan, Iraq and Azerbaijan were the top three export destinations.
“The UK, Germany, Canada, Austria, Hong Kong, Kuwait, Oman, the UAE, Russia, Bahrain, Turkey, Armenia and Kazakhstan were other export destinations,” he added.
Contraband Flood Domestic Market
The government has banned the import of cosmetic products and toiletries since May 2019.
Nevertheless, contraband currently account for 70% of the domestic market, according to a member of the board of representatives of Iran Chamber of Commerce, Industries, Mines and Agriculture, Hamid Moqimi.
The official said before the ban, cosmetic imports and domestic production made up 60% and 40% of the market respectively, but after the ban, imports of raw materials for the business were also banned.
“The ban on imports of cosmetics and toiletries has killed 8,000 jobs since last year and is bound to cost the economy thousands more in the future,” said Hamid Moqimi, chairman of the Iranian Association of Cosmetics, Toiletries and Perfumery Importers, earlier this year.
“As of last year, the Iranian Association of Cosmetics, Toiletries and Perfumery Importers included 250 companies, which had 20,000 people on their payrolls and indirectly supported 50,000 jobs,” he said.
“However, the Ministry of Industries, Mines and Trade threw them a curve on May 21, 2019, when it introduced an outright ban on imports of cosmetics and toiletries. Thus far, these companies have laid off 8,000 skilled workers.”
Moqimi noted that before the imposition of the ban, all imports were carried out without the need for government spending subsidized foreign currency.
“Imports were also subject to a 26-36% customs duty; a good part of tax revenues on imports of cosmetics and toiletries were spent on the import of hearing aid. The government has denied itself this revenue now that it has handed in the market to smugglers,” he was quoted as saying by the news outlet of ICCIMA.
“Given the advanced technology employed in the production of cosmetics and toiletries, domestic production is facing serious challenges. However, over the past two years, importers were intent on production by forming partnership with well-known international brands despite sanctions.”
The official said the remaining 12,000 jobs in this sector will disappear down the road, if the government fails to fix current rules and regulation regarding commerce.
This is while insurance companies are not financially capable of supporting the unemployed population.
Trade bans over the past year, as acknowledged by officials, have done little to improve production.
According to the Headquarters to Combat Smuggling of Goods and Foreign Currency, the ban on import has helped increase smuggling by 3.5-fold.
“By unlocking legal cosmetic and toiletry imports, the foreign currency presently absorbed by contraband market would be directed toward legal imports and consequently job creation. In addition, public health will be safeguarded and we won’t be forced to incur the cost of diseases attributed to the consumption of smuggled, fake products,” Moqimi concluded.