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European Law - Free Movement of Goods - Essay Example

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Fragrantia is wise to be worried about the new protectionist import taxes on perfume in tax, because essentially the company is going to suffer if it is not able to support the free flow of goods across borders through community provisions and support of free market…
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Download file to see previous pages A book could be written about this subject listing and describing the players over the years and the changes. In terms of France, Guerlain has traditionally been Frances most distinguished competitor for Fragrantia, offering the famous fragrances LEau impériale, Shalimar, LHeure bleue, Vol de Nuit and Mitsouko. “Guerlain was founded by Pierre Francois Pascal and, since opening their first perfumery in Paris in 1828, they have expanded to seven exclusive boutiques in Paris, with equally exclusive shops in Milan, Frankfurt, Tokyo, Singapore and Hong Kong1”. The new protectionist laws are poised to leave Fragrantia behind and give a favored market to Guerlain and Chanel, major competitors of the firm, each with a strong established base of customers who are willing to pay premium prices.
Sales are different for various competitors in the perfume industry, with growth in some areas and losses and others. However, overall sales in France appear to be somewhat stronger than UK sales, based on the slump of UK perfume industry which Fragrantia has to deal with in the first place, when compared to the assertion that Frances perfume and cosmetics industry “recorded its 40th consecutive year of growth in 2006, with sales rising 5.7 percent compared with an average of 5.0 percent in the past 10 years2”. Forty years of constant sales growth is indeed impressive and is something that the UK market is not really achieving, in terms of sales growth comparisons. This is why Fragrantia needs to continue to tap into the strong French market, but unfortunately is being stymied by the new tax.
Fragrantia’s discovering the reasons for this sustained sales growth in France may involve looking at variables such as free market motivation and effectiveness in relation to external and internal rewards, in terms of incentives as well as in terms of comparison with other types of variables such as national pride and ...Download file to see next pagesRead More
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