Interview: “Fear of divergence of UK REACH from EU REACH
What can you comment on the British paints and coatings market post-pandemic and post-Brexit?
Tom Bowtell: BCF members proved resilient during the pandemic, with most staying open and continuing production. Some sectors fared better than others, though. Decorative paint and woodcare sales soared as people took up DIY during lockdown. However, industrial paint sales dropped as parts of manufacturing, like automotive, shut down. Brexit has added its own challenges, new red tape, and increased costs for members to navigate.
What would you say are the main challenges in the paints and coatings industry currently?
Bowtell: The biggest issue affecting members at the moment is the global raw material shortages, which are starting to impact on production and leading to increased costs. Separately, as a result of Brexit, is the UK duplicating EU REACH regulations. The way this is currently legislated for – requiring full data dossiers as part of the registration process – means huge additional costs and red tape for businesses.
Downstream users of chemicals will be impacted particularly hard, as they have not had to deal with REACH registrations before. And there is a genuine risk that the process will prove so costly and cumbersome that many substances in the EU REACH database will not be registered in the UK as it will simply be uneconomic to do so, putting UK manufacturers at a disadvantage to their EU counterparts. Looking ahead, the number one concern from members about impact on competitiveness – alongside added costs due to customs etc – is fear of divergence of UK REACH from EU REACH, leading to duplication of regulatory processes.
´How have members dealt with the import/export costs as a result of Brexit? Are these causing an issue along the supply chain or have companies found ways to minimise the impact?
Bowtell: A survey we carried out in June showed that our members were being hit by new Rules of Origin, customs procedures, new UK regulations, and having to deal with EU rules as a third country. They have slowly got used to the new administration processes, although it is still causing difficulties. A third of members estimated increased operating costs of between 5-10% due to Brexit, with another one-in-ten estimating more than 10%.
These increased costs work both ways and in some cases are exacerbating the raw material shortage problem: where EU suppliers are struggling to access raw materials themselves, some may be choosing to prioritise their EU customers because shipping to the UK is now more expensive.
Is there anything else you’d like to add?
Bowtell: BCF is continuing to work to support its members during these difficult times. In particular, we are lobbying hard, alongside others, for a change to the UK REACH legislation. We hope there will still be time for this to be changed before it damages UK manufacturing. It is also important to add that the BCF board of directors endorsed the CEPE General Assembly proposal to keep the UK to the CEPE territory, proving that industry works beyond political borders.