A survey carried out by the Brazilian Association of the Cosmetic, Toiletry and Fragrance Industry (ABIHPEC) shows that sales fell by 6.7% in real terms between January and September 2015 compared with the same period last year.
The slump, which represents the industry’s first fall in 23 years, is the result of factors such as the political and economic instability that is affecting Brazil, the government decision at the beginning of this year to start levying the Manufactured Products Tax (IPI) on cosmetic distributors, the decline in consumer purchasing power and the water crisis, which has had an impact on sales of personal care products.
The employment rate remained stable in the first five months of the year. However, the fall in revenues caused by the higher tax burden with the IPI move and the increases foreseen in the Tax on Circulation of Goods and Services in 2016 have led to a fall in direct employment from June this year, resulting in a decline of 4.1% in September over the same period of 2014.
ABIHPEC pointed out that there were rises in direct employment in 2011 (8.3%), 2012 (1.6%), 2013 (2.6%) and 2014 (2.2%).