LVMH converts three of its perfume manufacturing facilities to make hand sanitiser instead

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The French luxury goods group LVMH is to start producing hand sanitiser at three of its perfume and cosmetics factories for distribution to French hospitals fighting the country’s coronavirus outbreak.

Twelve tonnes will be produced as soon as this week, instead of the usual Christian Dior, Guerlain and Givenchy scents and make-up usually made at the three French sites. The company also owns brands including Louis Vuitton, Christian Dior, Givenchy and Guerlain, Tiffany and Moet & Chandon.

LVMH announced that it is converting three of its perfume manufacturing facilities where it normally makes fragrances to make hand sanitizer instead. The first deliveries will be today and by the end of the first week, LVMH expects to have made 12 tons of the hydroalcoholic gel. The product will be given at no charge to French authorities and the largest hospital system in Europe.

Financial Times reports that a vital ingredient for hand gels and alcohol wipes is in short supply in Europe, with prices for the chemical jumping sharply on the back of a surge in demand because of the coronavirus pandemic. Stocks of isopropyl alcohol are running low, according to several suppliers and buyers on the continent, leading to worries that everyday products important in preventing the spread of Covid-19 will become more expensive and scarce. Healthcare systems, businesses and consumers are already struggling to procure sanitisers in the face of panic buying. Prices have spiked and many stores have begun rationing after the World Health Organization and other public bodies advised people regularly to wash their hands with alcohol-based hand rubs or soap and water to combat the viral outbreak. France has imposed price caps on hydroalcoholic gels.

One of the main disinfectants found in sanitisers, isopropyl alcohol, also known as isopropanol or IPA, is selling at historic highs in Europe, according to ICIS, the market information service. Its data show IPA grades for the cosmetics and pharmaceutical industries more than doubled to €2,250 a tonne in just two weeks. “It’s unprecedented,” said Anne-Sophie Briant-Vaghela at ICIS.

FORBES writes “LVMH is accomplishing several things with this move. It is, of course, responding to a shortage of hand sanitizer. But more than that, it is positioning itself to its consumers and its employees as doing what’s in the public interest. It is also justifying having its factories remain open and keeping its employees coming to work. All of those things make the company more purposeful and less commercial.

What’s so interesting about LVMH’s move is how quickly they are doing it and their understanding of what luxury means right now. Luxury used to be providing the highest quality products—now it means that and more. A true luxury business has to fill consumers’ needs at the highest level and by converting to hand sanitizer manufacturing, LVMH is doing just that. This moment is unique; at any other time, hand sanitizer for a luxury company would make no sense. But in this moment, perhaps even only this week or month, it’s appropriate and commendable to make what would normally be the most un-luxurious product and LVMH gets that. It is a great example of why they continue to be a leader in luxury.

The Guardian reports The city’s hospitals have not yet run out of gel but supplies are “strained,” a spokeswoman for the Paris hospital system said, adding that other companies have also said they are ready to donate supplies. Fears of catching the new coronavirus have sparked a run on hand gel across France, with many pharmacies restricting clients to one small bottle per person.

The government issued a decree limiting prices after reports some retailers were trying to make extra profit from would-be buyers, with a 100ml bottle now costing no more than three euros.

Producers across France say they have been hiring workers to meet the soaring demand, as authorities urge stringent hand cleaning among measures to curtail the outbreak.

Forbes / Financial Times

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