Türkiye's Thriving Cosmetics Industry: Opportunities, Challenges and Regulatory Insights – Healthcare Series 20

I. Introduction

Türkiye's role as a connecting point between leading European cosmetics companies and the high-demand markets of Asia and the Middle East cannot be overstated. With its geographical location, trade relations with neighboring countries, and a population of over 85 million, Türkiye has a competitive edge in cosmetics and huge market potential. In support of this, Türkiye, which is in the top 30 among the World Cosmetics Importers in 2023, also has an average growth rate of 10% annually in the cosmetics market.[1] While cosmetic products are primarily intended for non-medical purposes, their application to the human body necessitates regulatory oversight within the cosmetics industry. This is essential to safeguard human health and maintain ethical standards in commercial marketing and advertising practices.

II. Organization

The principles and procedures for the manufacturing, distribution, clinical experimentation, advertising, market introduction, monitoring, and safety regulations of cosmetic products are established by the Ministry of Health ("MoH") and its competent authority, the Turkish Medicine and Medical Devices Authority ("TMMDA"). The MoH and the TMMDA actively monitor, regulate, and examine the cosmetics available to guarantee their safety and safeguard public health. All products manufactured and sold in Türkiye must adhere to the regulations outlined in the relevant legislation.

III. Regulation

The Cosmetics Law No. 5324, published in the Official Gazette on March 30, 2005 establishes guidelines for the disclosures required to be made to the appropriate authorities before the distribution of cosmetic products. This legislation aims to guarantee that these products are made available to the public in a safe, efficient, and top-notch manner. It also addresses the regulations surrounding market monitoring, audits, and inspections of production facilities.

In accordance with this Law, Cosmetic Products Regulation ("Cosmetics Regulation") which outlines the guidelines and criteria for cosmetic products was published in the Official Gazette on May 8, 2023 replacing the previous regulation which had been in force since May 23, 2005. This new regulation aims to bring the standards in cosmetic products to provide consumers with accurate information, reducing potential misunderstandings and health risks. It will take effect six months after its publication.

In the Cosmetics Regulation, the roles of Responsible Persons and Distributors are established in order to govern the supply chain. The regulation states that only domestic resident natural or legal persons can be assigned as Responsible Persons. Their primary responsibility is ensuring that cosmetic products are available in the market. However, it is essential to note that Responsible Persons have specific obligations to ensure the safety of the products they supply. Distributors play a crucial role in product placement, adhering to labeling rules, and cooperating with regulatory agencies.

Pursuant to the Cosmetics Regulation, the Responsible Person must provide a Product Safety Assessment Report before releasing a product. Those who will prepare this report must meet the education standards set by the European Union ("EU”). Here are some key points regarding the educational standards set by the EU as of 2021:

1. Qualified Person: The individual responsible for the safety assessment of cosmetic products is often referred to as the "Qualified Person." This person should possess the necessary qualifications and expertise to evaluate the safety of cosmetic products.
2. Toxicology and Chemistry Expertise: Typically, the Qualified Person should have a background in toxicology, chemistry, pharmaceutical sciences, or a related field. A relevant university degree or equivalent professional experience is usually required.
3. Regulatory Knowledge: The Qualified Person should have a solid understanding of the EU Cosmetics Regulation and related regulatory frameworks. This knowledge is crucial for ensuring that the cosmetic product complies with all legal requirements.
4. Continuing Education: Staying up-to-date with the latest developments in cosmetic safety assessment and regulatory changes is essential. Continuous professional development and training are often encouraged to maintain expertise.
5. Responsibility of the Responsible Person: The Responsible Person, who is often the manufacturer or the entity placing the product on the EU market, is ultimately responsible for ensuring that the safety assessment is conducted by a qualified individual.
6. Documentation: The qualifications and experience of the Qualified Person should be documented, and this information should be made available to competent authorities upon request.

In addition, the regulation imposes restrictions on certain ingredients, specifically prohibiting substances that pose health risks.

Since regulations can change over time, it's important to consult the official EU website or regulatory authorities for the most current information regarding the educational standards and qualifications required for individuals responsible for cosmetic product safety assessments in the European Union. Legal advice or consultation with regulatory experts is also advisable to ensure compliance with the latest regulations.

Furthermore, labeling and packaging regulations are in place to ensure that consumers have access to essential information and to prevent false or misleading claims. The Cosmetics Regulation empowers consumers to make informed choices and supports domestic manufacturers in international trade.

It is worth noting that the regulation is regularly updated by the EU Commission to align with the EU legislation, thus marking a significant achievement in providing secure cosmetic products while adhering to EU regulations.

To uphold scientific and ethical standards and safeguard the rights of volunteers, the Regulation on the Efficacy and Safety Studies and Clinical Trials of Cosmetic Products or Raw Materials was published in the Official Gazette on September 20, 2015. This regulation outlines the procedures and principles governing efficacy and safety studies or clinical trials for cosmetic products or raw materials conducted on volunteers. 

The TMMDA issues various guidelines to govern a wide array of subjects on cosmetics. These subjects include but are not limited to safety evaluations, analyses, clinical trials, and assertions made about products. Additionally, the guidelines cover reporting adverse effects caused by cosmetics, establishing ethics boards, and conducting voluntary experiments, among other matters.

IV. Declarations, Responsibilities and Inspections

In Turkish cosmetics, there is no prerequisite for obtaining a license or permit for the production or sale of cosmetic products. Instead, the system operates on a self-declaration principle, wherein manufacturers are responsible for declaring the conformity of their products with the Cosmetics Law. Before the initial release of cosmetic products onto the market, a declaration must be submitted to the MoH, and any subsequent modifications must also be reported. The regulation of the cosmetics industry hinges upon the manufacturer's obligation to make these declarations, adhere to pertinent laws and standards, and the MoH's framework for inspection and market control. To guarantee the safety of cosmetic products, the MoH introduces various measures, including on-site inspections during production, market surveillance, and reviews. Manufacturers must ensure that their products meet the criteria of good manufacturing practices, technical and chemical requirements, and standards.

Within the realm of Cosmetics Law and Cosmetics Regulation, the term "manufacturer" encompasses more than just individuals involved in the physical production of a product. It extends to those who affix their name or trademark to the product or assume other roles, such as acting as an agent or importer. Manufacturers are tasked with various responsibilities, including reporting changes, employing qualified personnel, consistently updating product safety information, implementing measures to safeguard human health, adhering to packaging and labeling standards, and furnishing information as needed.

Declarations of cosmetic products are made through the Product Tracking System ("PTS") of TMMDA. Manufacturers must register with the PTS and electronically apply for the declaration of the specific cosmetic product. It is important to note that the MoH does not independently verify the accuracy of these declarations. Therefore, manufacturers have the duty to verify the accuracy of the information stipulated in the regulations and assume any potential liabilities that may arise in cases of non-compliance.

V. Opportunities and Challenges in the Cosmetics Sector in Türkiye

The opportunities that the Turkish cosmetics sector offers form a unique combination of various components such as the demographic landscape, location, production capacity and vegetation specific to the country.

Promising Demographic Landscape

Türkiye offers an intriguing prospect for investors due to its burgeoning and advancing cosmetics market. The sector's growth is fueled by the country's youthful demographic and the rising trend in cosmetics consumption. The escalating demand for cosmetic products favored by the younger population further enhances the sector's potential.

Simultaneously, the emergence of affluent and middle-class consumer segments in Türkiye fuels the desire for high-end and luxurious beauty products. As a result, an enticing market is formed for domestic and international cosmetic brands in the industry.

Convenient Location

The geographical position of Türkiye plays a crucial role in its advantage within the sector. With its convenient access to European markets and the continuously expanding demands of the Middle East, North Africa, and Central Asia, Türkiye holds a strategically beneficial position in terms of logistics. As a result, Turkish cosmetics manufacturers are presented with enhanced export prospects, enabling them to effectively compete in the international arena.

Outstanding Production Capacity

Türkiye has emerged as a prominent corner for cosmetics manufacturing, hosting numerous domestic companies that serve as manufacturers for various international brands.[2] These companies manufacture their own brands and contribute to producing other globally recognized brands as well. The robust production capacity in Türkiye accounts for its significant standing in the cosmetics sector and its role in manufacturing diverse brand offerings.

Distinctive Vegetation and Natural Resources

Türkiye possesses a substantial abundance of native plants exclusive to its territory. These local plant species serve as valuable resources for the cosmetics industry. With roots deeply embedded in history, these plants have been used for culinary and cosmetic purposes for centuries. Consequently, Türkiye harbors the capability to manufacture a diverse range of cosmetic products by harnessing its natural resources.

Briefly Highlighting the Remarkable Potential

When the amalgamation of these various elements is considered, it can be concluded that Türkiye possesses considerable prospects within the realm of the cosmetics industry, thereby presenting an enticing opening for potential investors. The explicit indication of this potential is evidenced by the country's projected export target of 1.6 billion dollars for 2023.[3]

Furthermore, the cosmetics industry in Türkiye is consistently marked by a wide range of inventive and varied products. Investors have the opportunity to capitalize on this extensive and diverse variety of products in the cosmetics sector in Türkiye, which can provide them with a distinct competitive edge. Turkish cosmetics manufacturers are strategically positioned to offer many high-quality products that cater to domestic and global markets.

The Turkish government has gained recognition for its commitment to fostering growth in the cosmetics industry and offering attractive incentives to potential investors. These incentives, specifically crafted to promote the production and export of cosmetic goods, effectively enhance the allure of investing in Türkiye for domestic and international investors. Furthermore, the government's steadfast support for research and development initiatives and innovation projects catalyzes the creation and advancement of cutting-edge products within the sector.

Challenges in Terms of Fierce Competition and Strict Regulations

Along with the exceptional opportunities an investor in the cosmetics sector in Türkiye may face intense competition. This intense competition among companies in the cosmetics industry necessitates new entrepreneurs to acquire market share and distinguish their products from the competition. The recent investigation by the Competition Authority into five companies involved in the cosmetics and personal care products industry regarding alleged instances of competition violation is also a significant indicator of the determination of the Competition Authority to take action upon a claim of violation of competition among the companies in the industry. [4]

Another vital aspect for investors is the regulations and standards associated with cosmetic products. Despite the country's robust security and monitoring mechanisms, ensuring the safety and compliance of products with local legislation is paramount to investors. Therefore, investors should augment their compliance teams and ensure they operate according to the local regulations to release their products to the market properly.

VI. Conclusion

Ultimately, Türkiye's cosmetics industry benefits investors because of its strategic position, growing market, and increasing demand for beauty products. The country's role as a bridge between European and Asian markets and its indigenous flora resources has placed it in a competitive position in the cosmetics industry. The government's support for research, innovation, and export promotions increases the attractiveness of potential investors.

However, consumers should be cognizant of the intense competition in the cosmetics market and the necessity of differentiating their products effectively. Furthermore, adherence to local regulations and safety guidelines not only ensures product compliance but also fosters consumer trust. A competent legal team familiar with the relevant legislation is essential to accomplish this purpose.

With thanks to Berfu Almina Karagöl for her assistance.

References

Ministry Of Trade Cosmetics Sector Report (Available only in Turkish). (2023). Retrieved from https://ticaret.gov.tr/data/5b87000813b8761450e18d7b/Kozmetik%202023.pdf

Palabıyık, D. Ç. (2023, January 18). Competition investigation for 5 companies operating in the cosmetics sector (Available only in Turkish). Retrieved from Anadolu Ajansı: https://www.aa.com.tr/tr/ekonomi/kozmetik-sektorunde-faaliyet-gosteren-5-firmaya-rekabet-sorusturmasi/2790376

Tosun, H. Ö. (2022, December 6). Türkiye has become a production hub in cosmetics (Available only in Turkish). Retrieved from Anadolu Ajansı: https://www.aa.com.tr/tr/ekonomi/turkiye-kozmetikte-uretim-ussu-haline-geldi/2756649#:~:text=T%C3%BCrkiye%27de%20%C3%A7ok%20fazla%20kozmetik,ve%20uygun%20fiyatl%C4%B1%20%C3%BCr%C3%BCnler%20%C3%BCretiliyor.%22

Ünal, E. C. (2022, November 30). The cosmetics sector's export expectation for 2023 is 1.6 billion dollars (Available only in Turkish). Retrieved from Anadolu Ajansı: https://www.aa.com.tr/tr/ekonomi/kozmetik-sektorunun-2023-ihracat-beklentisi-1-6-milyar-dolar/2751653#:~:text=Kozmetik%20%C3%9Creticileri%20ve%20Ara%C5%9Ft%C4%B1rmac%C4%B1lar%C4%B1%20Derne%C4%9Fi,milyar%20dolarl%C4%B1k%20ihracat%20beklediklerini%20bildird