European cosmetics sector warns regulation is weakening competitiveness

European producers face a widening competitive test

Europe’s cosmetics industry is warning that excessive regulation is eroding its advantages over manufacturers in the United States and Asia. The concern comes despite continued growth in major European markets and highlights a divide between strong consumer demand and increasingly difficult operating conditions for producers.

The warning matters across a broad value chain that includes brand owners, contract manufacturers, ingredient suppliers, packaging companies and retailers. Regulatory requirements can affect how quickly products reach the market and how manufacturers allocate staff and investment. Large international groups may be able to spread these obligations across extensive portfolios, while smaller producers have fewer resources with which to absorb them.

Poland becomes a €6.4 billion market

Poland provides a prominent example of the industry’s growth potential. The country’s cosmetics market was valued at €6.4 billion in 2025, an increase of 9.3% from the previous year. It accounted for 7% of the European Union market and ranked fifth within the bloc.

Those figures make Poland relevant beyond its domestic consumer base. A market of this size can support local manufacturing, product development and distribution, while offering international brands a substantial sales opportunity. Annual growth of 9.3% also increases competition for shelf space and customers. The central question for European companies is whether expanding demand will translate into stronger production and investment within the EU, or whether overseas competitors will capture a larger share of that growth.

Regulatory costs shape investment decisions

The industry’s complaint is not that the European market lacks demand. Poland’s performance points in the opposite direction. The concern is that the cost and complexity of compliance can weaken the ability of European manufacturers to respond rapidly to changing consumer preferences and competition from US and Asian companies. The available information does not identify individual regulations or quantify their cost, so the scale of the burden cannot be measured from the reported figures alone.

For producers and investors, the distinction between consumer-market growth and manufacturing competitiveness is critical. Sales can rise even as local companies lose market share or direct more resources toward compliance instead of capacity, innovation and commercial expansion. Importers and distributors may benefit from a wider choice of overseas products, but stronger import competition would put pressure on European suppliers. Poland’s €6.4 billion market therefore serves as both an opportunity and a test: it shows that European cosmetics demand remains commercially attractive, while the industry argues that the regulatory environment is making that opportunity harder for EU-based manufacturers to capture.