New US government and the potential impact on the professional beauty industry

By Sam Leyvas, Director of Government Affairs – Professional Beauty Association, USA

With US President-elect Barack Obama set to take office, along with control of the US Congress by one party, the professional beauty industry in America can expect politics to play an increasing role in how the industry conducts business. Whether your firm has current US operations or future plans, it is imperative to stay abreast of the effects potential legislation would have on the US$56 billion plus US beauty market. As the “voice” of the industry, the Professional Beauty Association (PBA) aims to keep its membership of salons, spas, manufacturers and distributors actively engaged in legislative matters that will impact their businesses. Key issues PBA has identified include:

New Beauty & Cosmetic Regulations
Cosmetic manufacturers that export – take note! The Food & Drug Administration (FDA) Globalization Act of 2008 will likely see more intense action in 2009. This proposed act includes mandatory registration of “any facility engaged in manufacturing, processing, packaging or holding cosmetics in the US or for import” into the United States.
Registration is required on an annual basis and facilities will be subject to a US$2,000 registration fee. Other provisions include mandatory adverse-event reporting, mandatory facility inspections and an annual registration fee of US$10,000 for imports. PBA is concerned that the current language is overly ambiguous and a burden on small businesses.

New VOC Regulations
New Volatile Organic Compound (VOC) emission standards for consumer products are expected to be issued in April 2009. New VOC standards would affect products such as cosmetics, hairspray and nail polish remover. These new standards are expected to increase the number of product categories covered and tighten VOC content limits.

Elimination of LIFO Accounting Method
The permanent repeal of the use of “Last-In, First-Out” inventory accounting would translate into massive tax increases for thousands of businesses. Firms that import products and distribute along with manufacturers with US operations would be severely impacted. The restricted use or outright repeal of LIFO would have potentially damaging effects on companies within the US beauty industry that rely on effective inventory management to remain profitable.

For more on PBA and other legislative matters, visit: www.probeauty.org

Sam Leyvas is the director of government affairs for the Professional Beauty Association. Leyvas is responsible for tracking legislation/regulations at the federal and state level, keeping PBA’s membership informed of issues relevant to the beauty industry, and how members can become active in government affairs issues. Email sam@probeauty.org

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