REACH Compliance and Lack of Competition
As many of our customers and fellow distributors and manufacturers know when attempting to distribute certain products into the EU that product on many occasions needs to be REACH registered and follow REACH compliance. To the small distribution firms this eliminates them from being competitive in the open market in certain geographical locations such as the EU due to the relatively high cost and complexity with securing such registrations. In doing so these markets in the EU are now polarized with only large scale primary producers in the marketplace being able to absorb these associated costs. The development of REACH over the past few years and its intended consequence was to allow greater visibility into what materials were coming into the EU, where they were coming from and allowing citizens greater access to substance information. However as quoted recently in Chemical Watch,
“Another issue, says Ueapme, is that the costs of REACH “clearly exceed” the benefits of citizens having access to more substance information, and a stronger focus on how such information can be better used by citizens is needed.
Cefic has yet to publish its comments on the review. But speaking to Chemical Watch at a UN chemicals meeting earlier this month, its director general, Marco Mensink, said the cost of registration for big companies is “already huge”, and for small companies the cost can “significantly affect profits”.
As you can imagine the costs for small scale distributors relative to the bottom line can be significant. In many cases REACH registrations for certain products can cost upwards and over $100,000. This only further causes the EU market into isolation. Hopefully in the future the benefits of REACH can be re-evaluated and a better system for the importation of chemicals into the EU is on the horizon.