Is the old system set up by the perfume industry over half a century ago coming apart at the seams?
As most of you know by now, it goes like this: brands don’t own the formulas of their perfumes, unless they have an in-house perfumer. The owners are the labs that develop those formulas: as a consequence, they remain the sole suppliers of the oil (the mix of aromatic ingredients before alcohol is added). Formulas are neither protected by copyright laws nor patented to protect their secrecy -- of course, gas chromatography has rendered secrecy a moot point since products are analysed within days of their launch.
The system has been rolling along for decades, because the brands need the labs and the labs need the brands, in a kind of gentlemen’s agreement. But now, LVMH has decided that it won’t play nice anymore. The industry has known about it for a while. Now it’s out in the French mainstream media, and that’s a first. In a May 28th article in Le Monde entitled “Le groupe LVMH se réapproprie la fabrication de ses parfums” (“The LVMH group re-appropriates the production of its perfumes”), Nicole Vulser exposes the luxury behemoth’s move to cut the oil houses out of the deal.
When LVMH hired François Demachy as head of olfactory development for the group, it was among other things to compose formulas that it would own and could produce directly in its plants: the countless flankers which might eventually dethrone the originals, thus benefitting LVMH, in addition to original creations like the Dior Escales or Collection Privée (formerly the “Couturier Parfumeur” collection). It also introduced different concentrations of classics, such as Diorissimo, whose eau de parfum is not Edmond Roudnitska’s formula but François Demachy’s, the eau de toilette still being the original, albeit adapted to IFRA standards.
But Demachy has also reformulated the originals of some of its best-known products so that the labs where they were originally composed can no longer claim ownership, and will no longer manufacture them. The four perfumes named in the article are Miss Dior Chérie by Christine Nagel for Givaudan, which was shorn of its wild strawberry and buttered popcorn note and will henceforth be known as Miss Dior (the real Miss Dior being labelled “Original”); Dior Homme by Olivier Polge for IFF, critically acclaimed but not as commercially successful as the brand had hoped; Fahrenheit by Jean-Louis Sieuzac for Symrise and Kenzo Flower by Alberto Morillas for Firmenich.
LVMH can do so perfectly legally. Once a formula is altered, it becomes a different product. LVMH owns everything but the original formula and can therefore put whatever it pleases in the bottles under the name and packaging to which it owns the copyright.
The article further states that LVMH is now not only mixing the oils and alcohol in its plants, but producing part of the blends provided by its external suppliers. LVMH has also centralized the purchase of certain raw materials (Dior and Guerlain retain their autonomy).
The reason, obviously, is cost-effectiveness: LVMH will pay less for products it makes itself, and for bulk purchases of raw materials. It is not entirely impossible that certain products may benefit from better materials, or even the readjustment of a formula that was radically mistreated by IFRA standards. It’s still a bully’s move, disrespecting the perfumers who conceived the products, the labs that developed them, and the consumers who love them as they are.
The difference is that the facts are now in the open, though it’s doubtful that this disclosure in Le Monde will alter Mr. Arnault’s policy one single bit. But it will be interesting to find out how – or whether – the big labs like Givaudan, IFF, Symrise or Firmenich react to protect their business, bearing in mind that LVMH remains a major client for several of their products. Will they increase the number of captives in their products, rendering them more difficult to "repatriate" without altering their smell too significantly? And will other luxury groups take the same step as LVMH?
Meanwhile, hang on to that bottle of Dior Homme you bought at the launch. It’s history.
 In June 16th 2006 the final court of appeal in France ruled that “the fragrance of a perfume does not constitute the creation of a form of expression that can benefit from the protection given to works of art.”