Industry reaction: What #Brexit means for UK & EU nutrition sectors

By Shane STARLING contact

- Last updated on GMT

'The future for nutrition products within the UK market will depend a lot on how UK authorities like the MHRA and Department of Health respond in the coming months and years' ©iStock
'The future for nutrition products within the UK market will depend a lot on how UK authorities like the MHRA and Department of Health respond in the coming months and years' ©iStock
For the first time the European Union has lost a member after the British people yesterday voted to leave the bloc which began life as the European Economic Community in 1951.

We canvassed opinion about what #Brexit means for the healthy food and nutrition sectors now that the EU28 is about to morph into the EU27. The EU will shrink by about 65 million people and the European Parliament will lose 73 of its existing 751 MEPs.

Preparing for legislative change

Graham Keen, executive director of the UK Health Food Manufacturers’ Association (HFMA)​ said his group was evaluating the vote’s ramifications. "Like most people I am extremely surprised by this result,” ​he said.

“I have said all along that we should not expect to see any immediate changes, whatever the outcome, so this should now be a period of calm reflection and not hasty decisions.

There will of course be some impact on the future development of legislation affecting this industry and the HFMA will as always be there to guide its members in a changing time."

Sector unity & regulatory action

Robert Verkerk, PhD, the founder, executive & scientific director of the Alliance for Natural Health-International (ANH-I)​ said responsibility now passed to regulators.

“The future for nutrition products within the UK market will depend a lot on how UK authorities like the MHRA [Medicines and Healthcare products Regulatory Agency] and Department of Health respond in the coming months and years,”​ said Dr Verkerk.

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“The sector as a whole has to come together to show why liberalisation of the UK market is good for health, good for self-care and good for the economy. We need to be able to show the UK authorities why it’s time to disband legally and scientifically irrational, protectionist restrictions on natural health products and claims that have emanated from Brussels.

“For some companies, especially bigger ones selling into multiple European markets, Brexit creates additional complications. It’s paramount that the right inputs are applied to the political process in an effort to secure the best possible trade negotiatons as the UK navigates itself out of the EU.”

Committed to UK

French dairy, infant formula and probiotic giant Danone ​said the UK “is a key market for Danone – one of our top 10 – and we have one plant there with around 1,200 employees working there. We are committed to our business there.”

Tighter infant formula rules?

Patti Rundall, OBE, from pro-breastfeeding group Baby Milk Action,​ said tighter laws around infant formula may result.

While the UK has been responsible for holding back social protection measures in the EU in many ways – on the specific issue of baby food marketing – it has always claimed that it could not fully implement the World Health Assembly recommendations because they had to follow the weaker EU measures.” 

“Will Brexit leaders - now free of such ‘constraints’ step up and do the right thing: protect parents from the misleading marketing that is doing so much to undermine child health?”  

Change will come slow

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The Proprietary Association of Great Britain (PAGB)​, which represents food supplement, OTC and self-medication firms including large pharma players, said it had supported ‘remain’ but respected British voter’s wishes and would liaise with members to assess the implications this decision will have for our industry.”

“We do not expect anything will happen quickly, it will take time to work out what the impact on regulation will be and it could be several years before the impact of any regulatory changes is felt."

Health claims review?

Ewa Hudson, head of health & wellness research at Euromonitor International,​ saw health claim consequences.

"Brexit potentially gives an opportunity to review the evidence and the legal status of health claims. But this opportunity may not happen any time soon, if at all. First, we are facing a period of uncertainly. The last time we faced a period of uncertainty with regards to the claims regulation, after the shock of the first batch of rejected health claims, manufacturers took a step back, and found safe areas/ingredients to refocus on, used soft claims, whilst the regulatory battlefield was on-going.  

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"It will take at least two years to leave and if there were to be a change it is unlikely it would be a priority of the government to review the health claims legislation in view of all the work they will have on negotiating trade agreements etc."

Euromonitor International said a cautious approach to investment decisions would be wise until the dust settles and we see the likely direction of the negotiations.”

More exits?

Outspoken Netherlands-based author and harsh critic of EU food law Bert Schwitters​ called the result, Great News.”

“What started as a Common Market based on the principle of Mutual Recognition metastized into an uncontrollable bureaucracy that is trying to overrule all aspects of reality and, in terms of nutrition and health, is trying to control consumer behaviour through regulating what food business operators must or must not produce and must or must not say,” ​said Schwitters.

The Dutch author added: “By way of the nutrition and health claims regulation (NHCR), these operators are even being deprived of their fundamental right of speech. So now, when it comes to over-regulating botanical supplements, food for special medical purposes, food information and whatever else is on the agenda of EU's bureaucracy and ‘parliament’, let's think twice before we continue along this ‘roadmap’ and consider that it will eventually lead to more and more Exits.”

Prominent consultant to the industry Nigel Baldwin at Intertek-Cantox​ told us it was business as usual.”

'Black Friday'

Yesterday the value of the pound had begun to rise as City traders were confident of a Remain vote. But as 17.4 million people backed Brexit, the pound plummeted today to its lowest level since 1985 and the FTSE 100 index took a hit falling by more than 8% - the biggest slump since 2008 - when trading began before recovering slightly by mid-morning.'business as usual'

In the Czech republic, Vaclav Bazata, head of the Czech Special Foods Association​ (CSFA) called the result a ‘Black Friday’ but said it may be many years before the full impact is felt.

“It will take seven years to leave totally and by then the UK will just switch to the position of Norway and Switzerland and the European Free Trade Agreement (EFTA) and will grow again,” ​he said. “It looks that direct democracy is more unpredictable than parliament democracy and the common more ignorant people will bear the costs.”

'Getting through the wall will be costly for both sides'

Christopher J Shanahan, global program manager in visionary science at Frost & Sullivan​, said the food sector would not be as badly hit as some others, although supplements may be vulnerable.

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“Food markets tend to be safe havens in bad economic times due to their relative inelasticity compared to other industry sectors like consumer durables,”​ Shanahan observed.

“Thus I think the overall economic impact will be less negative for the nutritional sector, but certain categories like dietary supplements may take a disproportionate hit compared to infant formula and food and beverage because of its perception as being less-essential.”

He said trade would be affected and business costs would rise.

“Basically, there will be a new economic wall between the EU and the UK that blocks the free movement of money, people and products. Getting through the wall will be costly for both sides.”

“Some smaller companies based in the EU that have 1 HQ, warehouse, plant etc which serves the entire EU region may not have the funds to replicate their efforts in the UK.”

“Thus, many companies may be locked out of, or choose to not participate in, the UK market, and vice versa.”

In addition, “Nutritional ingredient companies based in the UK will likely have to expend some capital in adjusting to their new regime's laws and regulations over time.”

The cost of “marketing, labelling, and certifications” ​would increase.

Research impact

Dr Wolfgang Hoffer, managing director at German consultancy and contract research organisation (CRO), analyze&realize​, said nutrition research would likely be affected by the British withdrawal.

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“Which UK company will continue to invest in innovative and safe products?”​ Dr Hoffer wondered. “How will they fund this research? So far, programmes such as Eurostar and HORIZON 2020 have been very beneficial for the UK researchers and will continue to be so for running projects.

"But what will happen in the future? Will the research councils be able to provide similar support in a country where R&D is not a strong national investing target?”

'Both sides…must discuss how to improve the EU'

German MEP and European Parliament​ president Martin Schulz said the institution – which is set to lose 73 British MEPs from the 751-member parliament – was “sad about the decision of the voters in the United Kingdom”.

But it would get on with the business “to adopt a resolution assessing the outcome of the referendum of today and describing the necessary next steps of the European institutions, especially the European Parliament itself. On the basis of article 50 of the treaty the European Parliament is fully involved in the next steps.”

Schulz said it is “a sovereign expression of the will of British voters to leave the European Union. This is a difficult moment for both sides.”

“We have to now, from a legal and a procedural point of view, pursue what are the next steps.”

“Both sides…must discuss how to improve the EU and how to protect…especially the Eurozone countries…in the next coming months. Especially with what is already happening to the pound…in that time we need stability.”

'we need a period of stability and calm'

William Reed​ group managing director Charles Reed expressed surprise at the shock result but remained optimistic for the British and international food and drink sectors.

“The margin may have been narrow but coupled with David Cameron’s resignation we should not under estimate the impact this result will have on business confidence across Europe and indeed the wider global economy,”​ Reed said.

InformingG

“I think generally the food and beverage markets will take a medium term view, and we remain confident in our strong market position and ability to turn this unexpected result into a positive opportunity.”

He added: “First things first, we need a period of stability and calm both in our markets and media, for us it’s business as normal.”

See here​ for an EC Q&A about the technicalities of #Brexit.

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2 comments

UK will fall under new harmonisation scheme.

Posted by Anthony Rees,

The UK is earmarked to fall under an opaque harminisation scheme the MHRA have already agreed to in 2014. This agreement was made between 20 national medicines regulatory bodies operating in chorus under a new global harminozation body called the International Coalition of Medicines Regulatory Authorities (ICMRA). The UK MRA will follow in the domino fall of Canada, South Africa and New Zealand where natural health products have been threatened. Wake up Robert and get with times! ANH is falling behind on this issue.

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Health Claims after Brexit

Posted by Mark,

The most opposition against the Health Claims regulation came from the GB and Netherlands, so it will be interesting to see, how long those will be kept around after the Brexit.

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