Grasse is the centre of the French perfume industry and since the 18th century has been known as the world's perfume capital (la capitale mondiale des parfums). Many "noses" (or, in French, "Les nez") are trained or have spent time in Grasse to distinguish over 2,000 kinds of scents. Grasse produces over two-thirds of France's natural aromas (for perfume and for food flavourings). This industry turns over more than 600 million euros a year.

Grasse's particular microclimate encouraged the flower farming industry. It is warm and sufficiently inland to be sheltered from the sea air. There is an abundance of water, thanks to its situation in the hills and the 1860 construction of the Siagne canal for irrigation purposes. The town is 350 m (1,148.29 ft) above sea level and 20 km (12 mi) from the Coast. Jasmine, a key ingredient of many perfumes, was brought to southern France by the Moors in the 16th century. Twenty-seven tons of jasmine are now harvested in Grasse annually. There are numerous old 'parfumeries' in Grasse, such as Galimard, Molinard and Fragonard, each with tours and a museum.

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