Black market in hair and beauty services has 'prospered' since Covid-19

There is a fear the black market will drive both staff and customers underground
Black market in hair and beauty services has 'prospered' since Covid-19

In 2020, 'the black market in hair and beauty is likely to account for at least 30% of the legitimate sector', according to a report.

The black market in hair and beauty services has prospered since March 2020, while the legitimate industry has been decimated.

That is according to the Hair and Beauty Industry Confederation (HABIC) which has written to the Government to highlight the “devastating impact” of Covid-19 on the sector.

Margaret O’Rourke Doherty, the group’s chief executive, said the sector has been “disproportionality penalised”.

She and the HABIC are calling on the Government to deliver key supports to ensure the future sustainability of the hair and beauty sectors.

A report issued by the HABIC – which has 2,500 members throughout Ireland – found the black market has “prospered” since March last year.

The report’s author, economist Jim Power, estimated in 2020 “that the black market in hair and beauty is likely to account for at least 30% of the legitimate sector.

“This would imply turnover of at least €400m, and lost tax revenues of at least €60m.” 

The report states it is “incumbent on Government to take actions to ensure that the legitimate sector is able to compete against the non-legitimate operators to the greatest extent possible”. 

Margaret O'Rourke Doherty, chief executive of the Hair and Beauty Industry Confederation, said the sector has been 'disproportionality penalised'.
Margaret O'Rourke Doherty, chief executive of the Hair and Beauty Industry Confederation, said the sector has been 'disproportionality penalised'.

Ms O’Rourke Doherty told the Irish Examiner there is a fear that the black market will drive both staff and customers underground.

“We do have a fear that we are losing staff to the black market, to kind of do it [work] on the side, but more so than that we’re very concerned that we’re going to lose customers," she said.

When you look at the black market, you’re looking at lower costs. You’re not dealing with all the business cost, all the overhead costs, all the Vat.” 

She said with consumer spending being affected by Covid, it “becomes very hard to compete” with the black market.

Ms O’Rourke Doherty said one of the things the HABIC want the Government to introduce is a stay and spend type scheme for the sector.

The HABIC say that by giving a tax credit to customers, clients would be enticed back to the salons and it would provide support to struggling businesses seeking to re-build.

Ms O’Rourke Doherty said a lot of salons are anchor tenants for towns and villages in Ireland and there is “a significant amount of money that we do contribute”.

'Not about vanity'

She said she expects salons to be open in May, stressing they are an “extremely controlled environment”, adding they could be open at present.

There has been very low numbers of clusters related to personal grooming and a very high number of services delivered.” 

The HABIC claims that “from a total of 6.8m services, there have only been seven outbreaks identified in the sector” since the outbreak of Covid-19.

Ms O’Rourke Doherty said in some countries, personal services have been classed as essential and that it “is not about vanity”.

“It’s about dignity, it’s about respect. It’s about how you feel internally. It’s about your mental wellbeing.

“And things like a hair cut… it really affects people’s confidence.”

The group is also calling for “a meaningful once-off grant payment” to enable salons to re-open in a sustainable way and for the Employment Wage Subsidy Scheme to remain in place for the hair and beauty sector until at least the end of 2021.

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