1940: Cosmetic Industry

During 1940 sales of products of the cosmetic industry reached a new, all-time high. Although this is written too early for any absolutely accurate return, the general opinion is that total retail sales for 1940 will be some ten per cent higher than those for the preceding year and amount to about $450,000,000.

This sales figure was attained despite the fact that some of the larger perfume companies did not go 'all out' in their sales efforts for the Christmas season while others were forced to curtail sales because of failing stocks. For even in perfumes the war made its far-reaching influence felt. So much so that in this field, as in so many others, the important question became one of production and not of sales. With imports from France completely cut off without much previous warning, stocks of finished French perfumes in this country were dangerously low in a great many cases. What was even more important, both from the number of manufacturers involved as well as from the point of view of dollar volume, supplies of raw materials in the form of essential perfume oils from France were also cut off. As the year ends the supply of raw materials has been temporarily eased somewhat, but 1941 promises a struggle for survival by some and a struggle for supremacy by others who were either more fortunate or more far-sighted in securing stocks or materials or both. Naturally, such perfume products as are wholly manufactured from products available outside the British blockade will also be in a strong position competitively while American perfumes have been presented with an unusual opportunity. The American position on synthetic aromatic chemicals, already good, will be further improved while a domestic or perhaps hemispheric flower-growing and essential oil distilling industry may easily result from a continuing scarcity of natural perfume materials.

In the face of these developments other factors which affect manufacturing and marketing in this industry did not loom particularly large. By this time labeling and manufacturing under the regulations of the Food, Drug and Cosmetic Act are proceeding smoothly in routine fashion. Thanks to cooperative efforts taken by and within the industry, the Federal Trade Commission has had little or nothing to complain of from reputable companies in the way of exaggerated claims in advertising. On the other hand, this Commission's cases against several of the larger companies marketing 'treatment lines' through demonstrators still drag along after more than four years so that there is still no final decision as to the legality of this type of cosmetic merchandising.

With respect to price maintenance under the Fair Trade Acts, the so-called Bathasweet decision handed down by a New Jersey Court on September 30, poses a problem to manufacturers operating under these acts. Briefly it held that 'when a producer, operating under the Fair Trade Act, combines two trademarked articles at a price less than the aggregate price of these articles if sold separately and independent of the combination, he has abandoned his price structure under the statute as to those items which have been combined.' As it is generally believed that this opinion would be upheld, this means that the fairly widespread merchandising device of using combinations of this type for stimulating or bolstering sales may only be engaged in with special, and not standard, packages.