European makers of beauty products faced supply crisis amid scarcity of Ukraine resources
European perfume and cosmetics makers face shortages of paper, glass, and some key oils and alcohols, as Russia’s invasion of Ukraine has further disrupted supply chains for beauty products, driving prices higher amid robust demand.
Cosmetics producers use alcohol derived from grains and organic beets to make perfumes and sunflower-seed oils to make cosmetics — all key crops from Ukraine.
At the same time, the energy crisis sparked by the war has pushed glass and paper prices through the roof. For example, a doubling in the cost of the paper it uses to make rigid luxury boxes for clients including Dolce & Gabbana, Ferragamo, and Givenchy has led Italy’s Isem Group to hike the price of its products between 10% and 40%.
Consultancy firm Bain & Company has calculated that higher prices for packaging, energy, and raw materials have driven up production costs in the cosmetics industry on average by 25%-30%. It is posing a challenge to mass cosmetics producers and leading to higher prices for consumers of luxury beauty products.