SHANGHAI: French cosmetics giant L’Oreal has promised to cut the prices of most of its imported products after the Ministry of Finance announced it would slash import tariffs.
Despite increasing operational costs and the limited impact customs duties have on retail prices, L’Oreal said in a statement here the other day that it would lower the prices of imported products.
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The ministry announced Monday that as of June 1, import duties on consumer goods would be reduced by an average of 50 percent. The duty on cosmetics will be reduced to 2 percent from 5 percent.
Economic growth slid to 7 percent in the first quarter this year, down from 7.3 percent the previous quarter, and retail sales in April grew 10 percent from a year ago, slightly lower than the 10.2 percent posted in March, indicating more easing measures may be needed to prop up growth.
L’Oreal China CEO Alexis Perakis-Valat said the company welcomed the tax reduction.
Last year, L’Oreal earned 14.3 billion yuan ($2.3 billion) in China, registering growth of 7.7 percent.
Yu Jian, general manager of consumer knowledge firm Kantar Worldpanel China, said the fast-moving consumer goods (FMCG) market had encountered challenges and looking forward it would probably settle into a period of moderate growth.
