Already at the entrance to the perfume shops, you can notice various scents, and if you just get a little closer to the perfume box of Lancome, Chanel, Gucci, Montblanc, Dolce Gabbana, Versace and others, their aroma is impregnated. They are imported from Europe, mainly from France and Italy, but there are also brands from Spain and other countries that are part of the European Union (EU).

The price of perfume ranges from 36 to 246 dollars, it all depends on the brand and size. These prices could change, remain the same for the time being or not increase as much, but with this, calculations are already being made to increase the sales of this product and others related to beauty and cosmetics. This is because they no longer pay customs duties for the trade agreement signed between Ecuador and the EU, which has been in force since January 1, 2017.

Like vehicles, perfumes, shampoos, paints and more than 140 sub-headings already enter the European Union with zero duty

This year 2024 will mark seven years since the signing of the agreement, in which 2,565 tariff items were negotiated, almost 70% entered with zero tariffs from 2017 (3.6% were excluded), and the rest entered the process of gradual reduction which has gone through periods of 3, 5, 7, and there are still 10 and even 15 years left.

The perfumes gradually decreased. They started with a tariff of 18%, then they went to 15%, 13%, 10%, 8%, 5%, 3% and this year 2024 they are at 0%. But there are also more than 140 subtitles, among them:

And the preference for products of European origin is increasing, and the reasons responsible for the stores of these products are explained by the quality and positive reviews on social networks about shampoos and beauty-related products.

Although European products make a place in national stores, those of other origins such as American, Brazilian, Colombian, Peruvian and national also have their customers. “Those who already absorb the benefits of each of the brands reject one or the other,” says one of the sellers.

Currently, the Italian-made shampoo ranges from $15 to $51; colors from various parts of Europe are between $7.90 and $13.38, and domestic colors are between $3.95 and $8.90.

The CEO of Procosmticos, María Fernanda León, indicates that with the reduction, the sector expects an increase of at least 5% in the sales of cosmetic products imported from the EU. “This benefits the cosmetics sector, as the tax burden on these products in Ecuador is extremely high.”

As an example, he states that perfumes have an “unjustified ICE tax of 20%”, in addition to paying VAT and a fee for obtaining an NSO (Mandatory Health Notification) at the National Agency for Health Regulation, Control and Supervision (Arcsa) of USD 904, “which makes the product more expensive in Ecuador.” “Such a tax burden dramatically boosted smuggling. “It is expected that the reduction of the duty will imply a reduction in the value of these products, reducing the proportion of smuggling of cosmetics, which is extremely high in Ecuador.”

According to León, between 10% and 15% of imported products come from Europe – cosmetics are mainly imported from Spain, France, Italy and Germany – the country’s cosmetics market generates an average of $1.3 billion annually, and much of that is imported from Europe corresponds to raw materials, supplies and machinery for the national cosmetics industry, for example, equipment mainly comes from Italy and Germany.

Duty-free entry also implies cost reductions, but indicates that the new values ​​of these products will depend on the planning carried out by importing companies. “The adjustment of values ​​takes time, taking into account the total costs of imports which, despite the reduction of tariffs, remain extremely high in Ecuador.”

He comments that in 2016, most cosmetics had a customs duty of 18 percent and that dramatically increased the price of imported products, and this encouraged the informal and illegal sector that “brought, and still has, to spaces that sell in suitcases”.

Also, it is pointed out that most of the smuggled products are fakes, which, since they are not protected by control organizations like Arcsa, “can harm the health of consumers, resulting in higher health spending”.

Agreement with the EU increased sales of European vehicles by 507% in six years What will happen in 2024 with zero customs?

On the other hand, León points out that although Europe is the cradle of cosmetics and the region that represents the greatest innovations in effective and safe formulations, the national cosmetics industry is now considered global. “Our main added value is European raw materials, supplemented with ingredients from the Andes and the Amazon region. Our products have been presented with great success at international fairs, the most important of which is Cosmoprof in Italy. “Highly specialized products, such as dermocosmetics, still require significant progress in their formulation, as the innovation that Europe has is a unique benchmark in the world.”

He comments that European cosmetics are a reference for the local industry, which tries to copy the big brands of that region, in order to compete with exports in other markets, such as those of Central America. “Healthy competition is positive and improves the quality of local products.”

However, in Ecuador he sees that the competition is not based on cosmetics that are legally imported, but on those that arrive in the country as smuggled, including counterfeits of European brands that threaten not only employment produced by official companies, but also consumers. health. “The quality of cosmetics is closely related to the health of the person who uses it. Legal, formal imports of European cosmetics benefit us all, including national cosmetics manufacturers.”