Essential luxury? How major brands are repurposing to tackle the pandemic

Posted: 14/04/2020

No more retail therapy

The Government published a list on 23 March 2020 detailing the businesses and venues that must close as part of the COVID-19 measures, see here. The list included “all retail with notable exceptions”, which arguably, by definition, puts the luxury goods and services and cosmetics industries into the ‘non-essential’ category.

However, at the top of the Government guidance is the note that “Online retail is still open and encouraged and postal and delivery service will run as normal.” This could imply that the Government intends the fashion and luxury industry to continue to do business as normal but only through online channels. This line opens the debate as to whether the Government considers the fashion and luxury industries to be essential.

The alcohol industry has also been affected with “restaurants and public houses, wine bars or other food and drink establishments including within hotels and members’ clubs” all being forced to close. Thankfully – and to our great relief - “off-licences and licensed shops selling alcohol, including those within breweries” fall under the exceptions category and so may remain open for business.

In England, environmental health and trading standards officers will be monitoring compliance with these regulations, with police support.

High-end heroes

Notwithstanding the Government’s stance designating the luxury goods and services industry (including the cosmetics industry) as a grey area of essentiality, companies in these industries have admirably turned to providing support to the medical industry by using their facilities to produce hand sanitiser and hospital supplies.

LVMH, L’Oréal, Estée Lauder Companies, Coty Inc. and Clarins have all announced that they will be using their resources and facilities to produce hand sanitiser across the world. In a similar move, Canada Goose, Gap Inc., Nike, Prada and The Kering Group (the parent company of luxury fashion brands Gucci, Saint Laurent, Balenciaga, Bottega Veneta, Brioni and Alexander McQueen) have all announced they will utilise their factories to produce protective face masks and medical overalls for healthcare professionals.

Spirit and beer producers are also pitching in with Pernod Ricard, Diageo and Anheuser-Busch InBev releasing statements that they will be producing and utilising their supply networks to distribute hand sanitiser.

Blending regulation

While this altruism is to be highly commended, companies should bear in mind that all relevant regulatory approvals still need to be met when producing or shipping equipment to help prevent the spread of coronavirus.

The Government released additional guidance on 26 March 2020 on the regulatory status of equipment being used to help prevent coronavirus (COVID-19), see here. Hand sanitiser falls into one of three regulatory groups depending on the product’s intended use, function, composition and how they are described. These groups are:  

• A cosmetic - products primarily used to clean and/or moisturise skin while providing a secondary antimicrobial effect, such as a liquid soap or solid soap bars.
• A biocide - products primarily claiming to kill germs, disinfect or sanitise or using an active antimicrobial ingredient, such as the hand sanitiser used in hospitals.
• A medicine - products specifically used as surgical scrubs for use in operating theatres and products which make claims to treat/prevent infection associated with specifically named pathogens.

Below is a brief overview of the regulations applicable to hand sanitiser, as cosmetics, biocides and medicines.

Cosmetics

The EU Regulation (EC) No 1223/2009 defines a cosmetic product as "any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours" and, as such, hand sanitiser will be captured by this definition.

The regulation relates only to cosmetic products and not to medicinal products, medical devices or biocidal products. The EU Regulation is enforced by Trading Standards in the UK under the Cosmetic Products Enforcement Regulations 2013.

Biocides

In the UK, biocides are regulated by the Health and Safety Executive (HSE) which enforces the EU Biocides Regulation (Regulation 528/2012). The HSE released guidance on the manufacture and supply of biocidal hand sanitiser products during the coronavirus outbreak. This guidance allows biocidal hand sanitiser products containing certain ingredients such as Propan-2-ol (isopropanol or isopropyl alcohol/IPA) to be produced but they do not have to obtain a product authorisation if they meet the relevant WHO-specified formulation II. There is also a WHO-specified formulation for hand sanitiser containing ethanol.

Under the transitional arrangements in the Biocidal Product Regulations, manufacturers do not require product authorisations to place hand sanitiser products containing ethanol onto the UK market.

Medicines

A product is medicinal if it falls under either the presentation limb or functional limb of Article 1 of Directive 2001/83/EC as amended:

“Any substance or combination of substances presented as having properties for treating or preventing disease in human beings” [the first/presentational limb].

“Any substance or combination of substances which may be used in, or administered to, human beings, either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis” [the second/functional limb].

If that product is a medicinal product, then unless an exemption applies, it will be subject to the Human Medicines Regulations 2012 [SI 2012/1916] (the Regulations). Regulation 279 of the Regulations states:

“A person may not publish an advertisement for a medicinal product unless one of the following is in force for the product -

(a) marketing authorisation;

(b) a certificate of registration;

(c) a traditional herbal registration; or

(d) an Article 126a authorisation. This refers to an authorisation granted by the licensing authority under Part 8 of these Regulations”.

This mean that if a product such as hand sanitiser is classed as a medicine it would require a marketing authorisation. Hand sanitiser products are not permitted to name specific pathogens and any claims to treat coronavirus could bring the product under the Regulations above.

Masking up - surgical/medical face masks

If a company is producing a medical face mask it will fall under the definition of a “medical device” in Part 1 of The Medical Devices Regulations 2002 (MDR), see here. This means any mask made for this purpose must meet the design and safety requirements of the Medical Devices Regulations.

There are extensive regulations for producing a medical device which cannot all be covered here but, in short, manufacturers must meet the following requirements:

• Confirm that the products are class I medical devices as described in Annex IX of the Medical Device Directive 93/42 (MDD).
• Check that the products meet the relevant essential requirements of Annex I of the MDD.
• Carry out a clinical evaluation of the medical device as described in Annex X of the MDD.
• Register with and notify the Medicines and Healthcare Products Regulatory Agency (MHRA) of any proposals to carry out a clinical investigation to demonstrate safety and performance and provide relevant documentation if MHRA requests it.
• Prepare technical documentation.
• If the medical device is sterile or has a measuring function, get approval from the notified body.
• Draw up the ‘EC declaration of conformity’.
• Put the CE marking (indicating that the product conforms to the requirements of the directives and is sterile) on the devices as described in Article 17 of the MDD.
• Implement and maintain corrective action and vigilance procedures, including a systematic procedure to review experience gained in the post-production phase.

Summary

• The luxury goods and services industry and cosmetics industry have been placed in the ‘non-essential’ category by the Government and have been forced to close their shops.
• Online retail is still available, so there is debate over whether luxury goods and services fall into a grey area of essentiality.
• High-end fashion brands and companies and producers of alcoholic beverages have pledged to use their facilities and resources to produce hand sanitiser and medical products to aid in combatting the coronavirus pandemic.
• These companies must be commended for using their facilities to help in a time of need but they must also ensure that they meet the relevant regulations.
• Regulations on hand sanitiser have been relaxed but are still very specific and must be met. Regulations surrounding medical devices are extensive and would likely require consultation and tailored legal advice.

This article has been co-written with James Mitchell, a trainee solicitor in the commercial dispute resolution team.

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