UK retailers could face huge compliance bill in the wake of EU referendum

Global PLM software leader, Trace One, has warned that UK food retailers and manufacturers must plan for potential regulatory upheaval in the event of a Leave vote in the EU referendum. 

A Leave vote could lead to the majority of related UK law being revisited and possibly re-written. For retailers who may have invested up to £30 million as recently as 2014 to comply with the EU’s ongoing Food Information Regulation (FIR), these changes could end up adding further costs on top of an already significant burden.

Shaun Bossons, Executive VP of Trace One, said: “FIR is a perfect example of how the referendum could force additional costs onto retailers. With allergen information required on product labels from December 2014, and nutritional information required from December 2016, the vast majority of retailers will have already made the relevant changes to packaging, with costs typically running to £3,000 per product.

"Yet if Brexit wins the day on June 23rd, there is no way of knowing if and when UK-only regulations will be introduced, necessitating further changes to packaging and effectively wasting the previous investment in FIR compliance. With the typical large retailer having over 10,000 product lines, the costs of adapting products for any new regulation could once again run into the tens of millions.

“While any changes from the vote are unlikely to be immediate, retailers still need to be ready. A large retailer needs time to prepare changes and change course, especially over a large range of products. The fact is, a Leave vote will have ongoing repercussions, where retailers might have to pay multiple times to alter products in response to regulation changes.

"Being as adaptable as possible will be critical in coping in this environment. If changes do have to be made to products or processes, the more quickly and simply they can be completed, the lower the cost and disruption retailers face. A culture of collaboration between retailers and their manufacturing partners will be an essential part of this; even if the worst never happens, improved processes will still benefit the business.”

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