The high cost of looking good

The value of the Polish skin-care and beauty-products market is expected to reach zł.9 billion this year, 3.5 percent more than last year, but lifting the excise duty could give it a much bigger boost, according to a recent PMR report, Non-food retail Poland 2006.

In 2005, Poles spent on average zł.28 monthly on skin-care and beauty products, which is three to four times less than consumers in western European countries. While overall consumption and spending on cosmetics continues to increase with the growing wealth of the population, Poles face much higher prices at the make-up counter. This is largely thanks to a 10-percent excise duty levied on all cosmetic and skin-care products imported in Poland.

This ratchets up prices by 10 to 20 percent more than those in western European markets, where incomes per capita are higher.

"Lifting the excise, announced for January 2007, should cause a decrease in cosmetics prices as well as an increase in the amount and value of sales," says Patrycja Ciosek, a PMR analyst.

Almost half of Poland's skin-care and beauty products are sold through super- and hypermarkets and 30 percent through specialized store chains. The country's biggest beauty-products chain is Drogeria Natura with 242 own and franchised outlets. Rossmann, the second biggest with 205 outlets, is the market leader when it comes to turnover - last year it clocked in at zł.913 million.

The Body Shop will also open its first shop in Warsaw's Złote Tarasy shopping center soon.