SAN FRANCISCO — Leading beauty companies have been handed a defeat by California Gov. Arnold Schwarzenegger, who signed into law legislation requiring cosmetics and personal care product manufacturers to notify state health officials when using ingredients with potential links to cancer and birth defects.

The governor’s office announced late Monday that he signed the bill, without comment. Cosmetic businesses, such as the Estée Lauder Cos., Avon Products Inc., Merle Norman and Mary Kay Cosmetics, lobbied the GOP governor to veto the measure, sponsored by state Democratic Sen. Carole Migden, from San Francisco.

“The Cosmetic, Toiletry and Fragrance Association is very disappointed that the governor signed the damaging and redundant” legislation, the industry’s Washington-based lobbying arm said in a statement, noting how “cosmetics and personal care products are already completely safe and well regulated under state and federal law.”

At issue is a long-brewing battle in California, as well as other states, in which consumer advocates clamor for more public disclosure of cosmetic and personal product ingredients known to be harmful in large concentrations. These chemicals include phthalates, commonly used in hair sprays and deodorants, and formaldehyde, found in nail polish and nail polish remover. Also under fire are preservatives known as parabens.

Manufacturers — pointing to studies underscoring their products’ safety, as well as federal and state laws making it illegal to knowingly sell harmful cosmetics — reject the need for additional state accountability.

“Literally thousands of scientific studies have been done on cosmetics and their ingredients and we determine that these products — whether used once or over a lifetime — are absolutely safe before they are sold to consumers,” the CTFA said.

Any regulatory changes — like being forced to eliminate an ingredient — would have a big effect on a national consumer products company. Manufacturers would likely have to revamp a product nationally in order to be cost effective in meeting new California rules covering its 36 million residents, industry lobbyists have said. And they warned of the legislation’s potential worst-case consequences: that prices for personal care products in the state would soar and cost thousands of industry jobs.

The bill doesn’t impose restrictions on ingredient use, but creates a new state regulatory arena to explore questions about safety. The legislation calls for companies to register with state health officials, starting Jan. 1, 2007, any product sold in the state containing “any ingredient that is a chemical identified as causing cancer or reproductive toxicity.”

This story first appeared in the October 12, 2005 issue of WWD. Subscribe Today.

The legislation also gives the state new authority to undertake its own tests of an ingredient’s safety and ask manufacturers to provide their scientific data. It’s unclear to what extent state officials might get into the cosmetics testing business, given the high cost of scientific research and the state’s poor fiscal health. Companies with annual sales of $1 million or less are exempt from the legislation.

Migden, the state lawmaker and chair of the powerful Senate Appropriations Committee behind the cosmetics bill, called the legislation a “triumph of grass-roots efforts and the quest for environmental and public health over money and power.”

Migden got support from the Breast Cancer Fund and about 150 companies producing mostly products of natural ingredients. These firms signed a Compact for Safe Cosmetics and included The Body Shop International, Burt’s Bees and Dr. Bonners’ Magical Soap.

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