L’Oréal CEO Nicolas Hieronimus told AFP on Wednesday that the US announcement of 15% tariffs was “not good news” for the cosmetics sector, a major European industry, but added that the impact would remain “under control” for the company.
“We are going from 0% to 15%, so of course we are not happy,” Hieronymus said during the company’s half-year results presentation. “Ultimately, Europe, where almost 500 million consumers live, will face higher tariffs than the UK ,” he added.
He also noted that the cosmetics industry creates more than 3 million jobs across Europe, contributes 180 billion euros to the continent’s GDP and is the second-largest contributor to France’s national trade balance.
“I still feel disappointed with this agreement,” he said, although “the positive thing is that it provides transparency and therefore removes uncertainty. Now we can plan ahead.”
Hieronymus also said that the Alliance for the Value of Beauty – a coalition of major players in the European beauty market, including Beiersdorf, L’Oréal, Givaudan, IFF, Puig, Ancorotti Cosmetics – will ask European leaders to better protect the European cosmetics and personal care industry.
In particular, he intends to focus on simplifying regulations and avoiding a situation where the industry is faced with “tariffs on one side and regulations on the other.”
The CEO admitted that the 15% US tariffs are “manageable” for L’Oréal.
“At least this year, they will not have a significant impact on our ability to achieve our goals,” he said.
The United States was the “main driver” of the group’s growth in the first half of the year, according to Nicholas Hieronymus.
L’Oréal, which gets 27% of its revenue from North America, makes half of all the products it sells in the region at its four U.S. factories. The company has also built up “luxury inventory” and fragrances and may increase prices slightly to offset the impact of the tariffs.