In his first Thursday Night Insight post, research executive Russell Clarke assesses the challenges brought about by the new REACH legislation.
In business-to-business market research, we need to have a thorough understanding of the challenges that are faced by our clients and their respective industries. Being profitable, building customer relationships and raising awareness of the brand are regular challenges for all companies. Every so often, however, an industry faces a new challenge that has a major impact on every aspect of its business. The new REACH EU legislation is a perfect example of this.
REACH (or Registration, Evaluation, Authorisation and restriction of Chemicals) is a new system for controlling chemicals within Europe. The legislation aims to provide detailed information on potentially harmful chemicals throughout the supply chain. It potentially affects any company which is importing a substance into the EU on its own, in a mixture, or in a finished manufactured product on or above 1 tonne per year. This simple fact means that a huge proportion of the industrial market is affected.
Under this legislation, companies must provide a revised Safety Data Sheet for each "substance" and register this with the European Chemicals Agency (ECHA). An outline of these costs that was released in December 2007 indicates that registration will cost up to €31,000 for each individual substance. Registration will be phased in over a period of 11 years. Whilst there are discounts available for companies wishing to submit joint applications and for SMEs, it is clear that this will be an expensive exercise for all concerned. When you take into consideration the range of products manufactured or supplied by the large organisations within the chemicals industry, you start to see the kind of resources that will be required to comply with REACH.
Aside from the technical and administrative implications, a great many businesses will also be considering the ramifications this legislation will have on their supply-chain and on their customers.
For further information on the REACH legislation the following websites may be useful: