Why do cosmetic businesses voluntarily revoke product declaration forms?

In recent months, Vietnam's cosmetics industry has witnessed a series of cosmetic enterprises voluntarily revoking previously announced cosmetic product declaration forms. This shows that cosmetic businesses in Vietnam are reacting quickly to changes in the legal framework, strict management methods of competent authorities and changes in business strategies.

Source: Tuoi tre Online

1. Strengthening and tightening the management of management agencies

One of the main reasons driving the wave of voluntary recalls is the increasingly strict legal environment for the cosmetics industry in Vietnam. The Government, through the Ministry of Health and the Drug Administration of Vietnam, has implemented many strong measures to improve product safety and transparency in the market. In May 2025, the Prime Minister issued Directive 13/CT-TTg, launching a nationwide campaign to combat smuggling, trade fraud and counterfeit goods, in which cosmetics are identified as a key sector[1]. This directive has led to the establishment of many irregular inspection teams in provinces and cities to supervise cosmetic products circulating on the market.

The inspection results showed a high rate of violations, with more than 40% of the inspected cosmetics and pharmaceutical establishments found to have violations[2]. Common issues include inconsistencies between the actual composition of the product and the published formula, as well as the lack or failure to present a Product Information Record (PIF). In response, the Drug Administration has issued a decision to recall nearly 300 numbers of product declaration receipts in just one day in May 2025, accounting for 2/5 of the total recall in the whole year 2024. Notably, the majority of these recalls are voluntarily requested by businesses, possibly to avoid harsher penalties or protect reputation.

In addition, the Ministry of Health is amending the legal framework on cosmetics management. The draft decree replaces Decree 93/2016/ND-CP to simplify administrative procedures but enhance the efficiency of management and supervision of post-inspection of the market. A notable point in the draft is the shortening of the validity period of the number of receipt of cosmetic declaration certificates from 5 years to 3 years, in line with ASEAN standards, where the validity period usually ranges from 1 to 3 years. While this change ensures more frequent quality updates, it also places an additional compliance burden on the business, requiring periodic re-registrations and increasing operating costs. This change has caused many businesses to re-evaluate their product portfolios and withdraw their declarations for products that are at risk of not meeting the new standards.

In addition, regulations on advertising and labeling are also tightened. The Ministry of Health has proposed a list of prohibited or restricted words in cosmetic advertising to avoid confusion that the product has a curative effect. Violating companies repeatedly face strict sanctions, such as suspending the receipt of published documents for 6 months. This close supervision has motivated businesses to voluntarily recall non-compliant products to minimize the risk of fines and maintain their reputation in the market, which has been severely affected by the recent scandals of Vietnamese cosmetics businesses[3].

2. Mitigate legal and compliance risks

Increased post-market inspections and severe penalties have caused a lot of turmoil for cosmetic companies. Common violations detected include product formulations that do not match the declaration sheet, incomplete PIF records, and false advertising. Administrative penalties can be very severe, with fines of up to tens to hundreds of millions of VND[4] according to Decree 117/2020/ND-CP, along with the risk of product bans and reputational damage.

To avoid these risks, many companies have actively requested the revocation of the announcement slip. In May 2025, the Drug Administration recorded a large number of voluntary recall requests, coinciding with the peak inspection campaign. Observers believe that this is a strategic move to "dodge" potential violations during the inspection. By revoking the declaration slips of problematic products, companies can re-register the improved version later, avoiding disputes or complaints from consumers.

This trend is especially evident in cases where businesses have difficulty meeting technical or profile requirements. Some companies may lack the resources to maintain adequate PIFs or perform periodic quality inspections, leading to the withdrawal of product disclosure tickets that are difficult to maintain under the new regulatory framework. This proactive approach helps businesses manage legal risk and focus resources on more efficient and compliant products.

3. Enterprises change their business strategies in the new situation

In addition to legal pressure, internal factors of businesses also contribute to the wave of voluntary recalls. Some companies withdraw their announcements during the restructuring process or because they have stopped operating. Reports indicate that some cosmetic businesses registered business addresses but in fact did not exist or ceased operations before the recall was requested. These "ghost" companies may be set up only to register products, and when dissolved or withdrawn from the market, they revoke all relevant declarations.

For active businesses, voluntary recalls can reflect strategic decisions to optimize product portfolios. Companies regularly evaluate the profitability and market performance of their products, deciding to stop selling products with low profits or declining sales. The revocation of these product announcement slips helps businesses focus resources on more competitive or innovative products, in line with market trends and consumer preferences.

Template decision on revocation of receipt number of cosmetic product declaration form

4. Market purification and protection of consumer rights

The wave of voluntary recalls also reflects the trend of purifying the cosmetics market in Vietnam. In recent years, Vietnam's cosmetics market has developed rapidly with the emergence of a series of products, from imported goods, domestic cosmetics to "handmade" cosmetics. However, this boom is accompanied by problems of counterfeits, counterfeits, low-quality products, and hype. To protect consumers, the authorities have strengthened market purification, eliminating unsatisfactory products.

A series of recent mistakes by cosmetic companies and the drastic actions of regulators have shown that the cosmetics market is entering a new cycle: the cycle of market purification to protect consumers[5]. In May 2025, the An Giang Department of Health has revoked more than 300 publications of Winlab Ba Xuyen Cosmetics Company, an enterprise that manufactures widely distributed creams, masks and sunscreens. Many of these products were once advertised as "Korean cosmetics" to attract customers, even though they were actually made in Vietnam[6]. False claims of origin and quality have made the authorities strongly handle. Similarly, in the Northern provinces such as Bac Ninh, Nam Dinh, and Thanh Hoa, a series of products such as cleansers, shampoos, and feminine hygiene solutions,...

Controlling false advertising is a big focus. Products that claim to have medical benefits or are "recommended by a doctor" have been found to be infringing, as cosmetics are not allowed to make treatment claims. By voluntarily recalling these products, companies avoid penalties and are in line with the trend of market transparency.

For imported cosmetics, the regulator focuses on verifying the origin and legality of the product. Investigations show that some businesses register foreign-branded products without valid import documents, raising suspicions of smuggling or informal distribution through channels such as "portable". The voluntary recall of these enterprises is often a measure to avoid being detected serious violations of the origin of goods, contributing to cleaning the market and creating a fair business environment for reputable distributors.

5. Other factors

Economic pressure also contributes to the trend of voluntary withdrawal of cosmetic declaration forms. High production and import costs due to inflation and exchange rate fluctuations have reduced the profits of many cosmetic products. For products with high production or import costs but low profits, businesses can consider stopping business and withdrawing the declaration to focus capital on more profitable products. Compliance costs, such as periodic quality testing, also cause low-margin products to be removed from the product portfolio.

Technical factors, such as safety standards, also play an important role. The cosmetics industry is constantly updating safety standards, including a list of prohibited substances and content limits of certain ingredients. Products with formulas containing ingredients that are about to be banned or no longer conform to the new standard may be recalled to avoid being "whistled" by regulatory agencies. Similarly, products with technical problems, such as instability or frequent complaints of irritation, may also be withdrawn to avoid long-term risks to brand reputation.

On the commercial side, fierce competition in the market also affects the decision to maintain or discontinue the product. The Vietnamese cosmetics market is currently fiercely competitive, with the participation of many international brands. If a product is no longer competitive in terms of use, packaging, price and sales decrease, businesses can withdraw that product to reduce maintenance costs. In addition, changing consumer trends, such as the demand for natural and vegan cosmetics, make products that contain more synthetic chemicals less attractive. As a result, businesses can withdraw outdated products to focus on new product lines that are more in line with market trends.

Finally, legal issues and brand reputation also have an impact. When a cosmetic-related incident occurs, such as a product containing a banned substance or being falsely advertised by an influencer, companies can proactively review the product portfolio to avoid similar "weaknesses", in order to maintain customer trust. This is a common chain reaction to reassure consumers that the company only provides products that meet quality and legal standards.

The phenomenon of Vietnamese cosmetic enterprises simultaneously voluntarily withdrawing product declaration forms is the result of many intertwined factors. Objectively, the legal environment is increasingly tightened, with intensified inspections and strict sanctions, forcing businesses to quickly adapt. Subjectively, companies make strategic decisions based on legal risks, business performance, and development strategies, leading to the withdrawal of problematic products. At the same time, the trend of market purification reflects the regulator's commitment to protecting consumers and promoting a transparent, high-quality cosmetics industry.