 Now that the European Union's (EU) program for registration, evaluation and authorisation of chemicals (Reach) has become law, companies will have a 6 month period from June to December in 2008 to pre-register existing chemicals so that the substances will be eligible for evaluation and not be banned from the European market. U.S. trade with Europe will be affected, according to many in the industry.
Each chemical will be registered only once, even if there are multiple producers. As a result, chemical manufacturers are forming "substance information exchange forums (SIEFs)" as required by the legislation so that they can work together to compile existing data, determine what information is needed, and establish appropriate classifications for specific substances.
The need to work cooperatively will pose anti-trust concerns for US (and European) firms. U.S. antitrust law prohibits the exchange of information or the making of agreements that are designed to or have the effect of preventing, restricting or distorting competition. Companies must be very careful not to share information on pricing and customer policies, production (including planned changes), market and distribution plans or production costs, capacities and sales. In addition, the groups must be very careful not to discriminate or exclude other companies. It is recommended that firms retain trained consortia managers.
Many also expect that product consolidation in the U.S. will occur because of the burdens associated with Reach registration. The requirements for product testing and assessment will be costly, and it is likely that many companies, particularly smaller ones, will find it more economical to reduce their product offerings in order to reduce their registration costs. Companies using eliminated products will be forced to find substitutes, which will carry additional costs.
In addition to product consolidation, Reach is expected to result in changes in market strategies and investment in R&D. It is likely that the banning of substances in Europe will affect production of those products in the U.S. and other countries as well. "Blacklisted" compounds under Reach rules will probably be the first products to be eliminated, and companies should already be preparing to find substitutes for these chemicals.
In addition, the U.S. Congress is considering legislation similar to Reach. U.S. chemical producers must take immediate action to prepare for the EU requirements and maintain awareness of the actions of legislators in Washington. |
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