Are boutique soapmakers doomed?

The past decade has seen an explosion of small, independent soap, fragrance and cosmetics companies emerge from the kitchens and basements of America. Creative entrepreneurs have conjured up a myriad of offerings from bath fizzies to sugar scrubs and spa products to mineral makeup.  All of those products were introduced to the market by small market creators. The vast majority of these businesses are owned and operated by women. But those days of estrogenical innovation and entrepreneurship may be nearing an end.

The Discussion Draft of the Food and Drug Administration Globalization Act of 2008, introduced by US Representatives John Dingell (D-MI), Frank Pallone, Jr. (D-NJ 6th) and Bart Stupak (D-MI) is poised to radically change and possibly destroy the boutique bath and cosmetics industry.

It is important that consumers be protected, however the current proposals don’t do anything to solve problems like the ones I talked about here. They don’t address the thousands of known carcinogens that are in cosmetics produced by large conglomerate corporations . They don’t propose a budget to enforce the regulations that are already on the books.  They, in fact, do almost nothing to protect the consumer.

What they *do* is require is that anyone who wants to make soap or cosmetics pay a “registration fee” between $2,000 and $12,000 dollars annually. Additional registration fees are applied for those that import anything used in manufacturing, such as oils, fragrances or essential oils and hydrosols. The fees are subject to go up, as they’re a discretionary budget item, rather than a fixed cost item.  There is no difference in the fee structure between Palmolive and a hobbyist who sells her products at the church bazaar.

This legislation will require that every manufacturer have access to legal council that specializes in regulation compliance. As those attorneys generally come with $500 an hour price tags, the cost of translating the legislation will be enough to push most small companies out of business.

The legislation will require manufacturing facilities that are out of the reach of any company under a $10 million market cap. Laboratory and archival requirements add significant cost barriers to entry level or small businesses.

For those who practice aromatherapy using essential oils, the barrier is significantly higher because of those products will be classified as  “drugs”, which requires manufacturing facilities like those of the companies that produce insulin or other pharmaceuticals.  Micron level filtration is completely out of the reach of most soapmakers. And frankly, it’s an absurd requirement.  Nobody has ever died from dusty soap.

The legislation is well intended. Consumers do deserve to be protected. But *this* legislation is fails to consider small businesses, is completely unfunded, generates an extraordinary amount of required paperwork, and will dramatically decrease consumer options, as they’ll be left with virtually nothing but the petrochemical options offered by major cosmetic companies.

Fortunately, this bill is still in committee, and can be modified before it’s presented on the floor of Congress.  If you agree that the bill should have some provision to scale fees and requirements to meet business size, please take a few minutes to contact The House Committee on Energy and Commerce.