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Earn 300 and be fined 20,000 yuan, and the foundry will become a brand "scapegoat"!

A few days ago, Guangzhou Skinhoney Biotechnology Co., Ltd. (hereinafter referred to as "Skinhoney Bio") was subject to administrative penalties for the production of cosmetics that did not meet the filing information, specifically, its filling and production of "ZISERENSHENG Posture Life Beauty Skin Lasting Makeup BB Cream" product was detected to contain sunscreen not specified in the filing information, and the Skinhoney Biology as the filing person was fined 20,300 yuan.

"The factory was pitted by the incoming material." The amount is not much, but behind it, it is the epitome of a factory constantly reducing its requirements to grab orders for meager profits. This case has also sounded the alarm again for the majority of cosmetics processing factories, and they can't take orders casually.

The fee was 300 yuan and he was fined 20,000 yuan

The factory was tripped by incoming materials

According to the disclosure of the administrative penalty letter, the product involved in the production and operation of Skinhoney Biology "ZISERENSHENG Zi Sex Life Beauty Skin Lasting Makeup BB Cream (batch number: E310723/GM; Specification: 35ml)", which was found to be unqualified in the 2024 cosmetics national sampling inspection.

Based on this, the Market Supervision and Administration Bureau of Huadu District, Guangzhou City, conducted an investigation on skin honey biology and found that the latter mainly has the following problems:

Earn 300 and be fined 20,000 yuan, and the foundry will become a brand "scapegoat"!

1. Failure to implement the sample retention management system.

An investigation by the Market Supervision and Administration Bureau of Huadu District, Guangzhou City, found that the above-mentioned products involved in the case were produced by Skinhoney Biology on June 8, 2023, with a total of 500 pieces and a commissioned processing fee of 300 yuan. According to the accounting of products of the same type and specifications, the contracted labor and materials are 3.5 yuan/branch, and the value of the above-mentioned products produced and sold by skin honey biology is 1732.5 yuan, and the illegal income is 300 yuan.

No products involved in the case were found at the scene, and because it could not provide information such as retained samples of the products involved in the case and retained sample records, Skinhoney not only violated the provisions of Article 18 of the Good Manufacturing Practice for Cosmetics, which stipulates that "enterprises shall establish and implement a management system for retained samples", but also did not comply with the first paragraph of Article 29 of the Regulations on the Supervision and Administration of Cosmetics, which states that "cosmetics registrants, filing persons, and entrusted production enterprises shall organize the production of cosmetics in accordance with the requirements of the Good Manufacturing Practice for Cosmetics formulated by the drug regulatory department of the State Council. Establish a management system for the inspection and retention of samples of cosmetic products".

2. Detect the components not specified in the filing materials.

According to the filing system of the State Food and Drug Administration, the product involved in the case, "ZISERENSHENG Skin-Friendly Skin Lasting Makeup BB Cream", was filed by Skinhoney Bio on February 27, 2023, and is an ordinary cosmetic product, with only one efficacy claim, namely "beauty modification", and the filing ingredient and label ingredient list are consistent, and does not contain other functional ingredients. However, the State Food and Drug Administration found that the BB cream contained sunscreen.

Earn 300 and be fined 20,000 yuan, and the foundry will become a brand "scapegoat"!

Obviously, the act of producing and operating cosmetics that do not meet the technical requirements specified in the cosmetics registration and filing materials violates the second paragraph of Article 29 of the Regulations on the Supervision and Administration of Cosmetics, which stipulates that "cosmetics registrants, filing persons, and entrusted production enterprises shall produce cosmetics in accordance with the technical requirements specified in the cosmetics registration or filing materials".

However, the administrative penalty letter emphasized that the batch of products involved in the case was unqualified because "the incoming materials already contained sunscreen ingredients, but because the parties were negligent and did not indicate it on the filing information when the products were recorded".

In view of this, the Market Supervision and Administration Bureau of Huadu District, Guangzhou City, imposed a lighter punishment on Muscle Honey Bio: 1. Confiscation of 300 yuan of illegal gains; 2. A fine of 20,000 yuan; The total amount of fines and forfeitures was 20,300 yuan.

Brand "Stealth"

The factory has become a "big injustice"

On the surface, this is a "penalty case caused by lax review of raw materials for product filing", but "Cosmetics Observation" interviewed a number of industry insiders and found that in fact, this may be a typical case of "backing" by the factory.

According to the administrative penalty letter, Muscle Honey Bio "produced a total of 500 sticks and charged a commissioned processing fee of 300 yuan", in other words, the filling fee was 0.6 yuan per piece.

"It is clear that the products involved in the case are staged production, that is, the semi-finished products are produced in one factory and the filling is operated by a second factory, i.e., Skinhoney Bio." Qin Peihua, founder and chief consultant of Huiyi Quality Technical Service (Shanghai) Co., Ltd., said.

In other words, the brand side is Zi Lisheng, entrusts production enterprise A to prepare the material body (i.e., semi-finished products), and then fills and records the skin honey biology of the production enterprise.

Earn 300 and be fined 20,000 yuan, and the foundry will become a brand "scapegoat"!

"The skin honey creature is just being pitted by the incoming material." Mei Haiping, chairman and technical director of Zhexing Biotechnology Co., Ltd., pointed out that the brand found muscle honey biological filling and asked it to complete the filing according to the information provided. However, Skinhoney Biology could not confirm whether the filing information provided by the incoming party was consistent with the semi-finished products provided by it, nor could it review it, "because the semi-finished products were not produced by Skinhoney Biology, and there was no way to verify what ingredients were added to it."

He further explained that there are many prohibited and restricted ingredients stipulated in the "Safety and Technical Standards for Cosmetics (2015 Edition)", and unless it is clear which ingredients may be added, it is blind testing, "which is basically impossible to detect, and the testing cost is also high."

"This [sunscreen] is deliberately added to increase the sunscreen efficacy of the product." An industry veteran speculated that the formula contained sunscreen, and the material processing plant A must have been aware, and the brand may also have known, "perhaps knowing that once it was sampled or reported, it would be impossible to escape, so it found the bottling plant as a scapegoat."

One of the highlights of the new regulations is the establishment of a cosmetics registrant and record-filing system, "as the first responsible person, the registrant and record-filing person are responsible for the safety and efficacy claims of the product". When the "ZISERENSHENG Skin Beauty Lasting Makeup BB Cream" was unqualified in the random inspection, the first person to be held accountable was the skinhoney creature who was the person who filed it.

"The Food and Drug Administration can only punish the parties, that is, the filing person, and this product belongs to muscle honey biology from the perspective of regulations, and the brand has no legal responsibility." Mei Haiping said.

Even, the brand side and the material preparation manufacturer A are "invisible" on the product label. According to Item 3 of Paragraph 1 of Article 10 of the Measures for the Administration of Cosmetics Labeling, the name and address of the manufacturer shall be marked with the name and address of the manufacturer that has completed the last process of contacting the contents. In this case, it was the skinhoney organism that completed the last process of contacting the contents, so the "filing person" and "manufacturer" on the label were all skinhoney organisms, and they were the first responsible persons for the product.

There are fewer orders and the involution is intensified

The factory struggled to get by

In fact, this is not the first factory to be fined for incoming material issues.

As early as August 2022, Guangzhou Bohui Cosmetics Co., Ltd. was punished for the detection of banned substances in the mask produced by the OEM, and the raw materials and packaging materials of the product were provided by the brand.

With the tightening of supervision, many factories are also cautious about processing with incoming materials while improving their raw material testing capabilities. A cosmetics foundry in Hubei told "Cosmetics Observation", "We only do ODM now, not processing with supplied materials."

Mei Haiping also pointed out that "filling with incoming materials and filing for the other party is not acceptable to most processing enterprises." He explained that semi-finished products are not produced in their own factories, and they have no control over what ingredients are added to the product, and if there are banned or restricted ingredients, the legal risk is greater, and the income is also low, and the filling cost of a bottle is only a few cents.

Earn 300 and be fined 20,000 yuan, and the foundry will become a brand "scapegoat"!

The benefits are small, the risks are large, no matter how you calculate it, this is a loss-making business. In order to earn 300 yuan in processing fees, Muscle Honey Biology took a risk, and was finally fined 20,000 yuan, which reflects the dilemma faced by the entire foundry industry - overcapacity, low price involution, and reluctance to compromise in order to grab orders.

In the first half of this year, the performance of Bawei shares and Jiaheng Jahwa was not ideal, and the situation of small and micro production enterprises was even more difficult.

According to the company's data, as of the end of September 2024, 1,465 cosmetics production-related enterprises have been cancelled or revoked (the data caliber includes "cosmetics production" in the enterprise name, business scope, and product name), an increase of 13.9% over the same period last year.

According to the National Bureau of Statistics, from January to August this year, the total retail sales of cosmetics were 273 billion yuan, down 0.5% year-on-year. Among them, cosmetics sales in August were 31.9 billion yuan, down 6.1% year-on-year.

Clearly, there are still challenges to the full recovery of the industry. Weak market demand and cost pressure are still a big mountain in front of Hengdan's factory, "calm down and get through", or the best choice that the majority of small and medium-sized factories can do at the moment.

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