Clearing The Hurdles

Brexit, prices, supply chain. How do we navigate restrictions and other hurdles to surge ahead in difficult times?

Our supply chain Reboot 2022 panel

Soo Cieszynska, Business Development Manager, Active Pharma Supplies/Huxley Europe
Simon Bandy, Director, Health Plus
Martin Watson, Country Manager, Au Naturel UK (now Better Being Co)
Cheryl Thallon, MD Viridian Nutrition

Q Have you noticed any freeing up of restrictions on natural health products and ingredients in the UK since Brexit?

Martin Watson: Nothing appears to have changed from our perspective so far since Brexit, but it is still early days when you consider the amount of time that legislation changes take to come through. Add to that a challenging international climate and it's not surprising that we're not yet seeing much movement. I would hope to see restrictions freeing up eventually, but I think realistically this is going to take years rather than months.

Simon Bandy: Currently we have not seen any freeing up of restrictions since Brexit. I assume that this is because as a country we wholesale adopted the majority of the EU laws and regulations that were current at the time. So, until this is reviewed all the red tape and paperwork will remain in place. I feel that our industry is quite a way down the priority list and this review is a long way off!

Soo Cieszynska: We have two perspectives on this. From the Active Pharma Supplies perspective raw ingredients from Europe have a more rigorous paperwork regime to go through which has been seen to increase in rigidity from Jan 2021 to Jan 2022. As Active Pharma Supplies is pharmaceutical licensed there have been less hold ups. But in addition to Brexit, the pandemic has caused delays in products from India and China because of shipping delays and now with the Ukraine/Russia crisis this may well be compounded more. Huxley Europe import finished goods from Europe and again the same rigorous rules have had some impact since Jan 2021.

Cheryl Thallon: Food supplements are heavily regulated – and rightly so. For health store advice to be trusted, the public must have faith that they can safely consume the supplements recommended. The supplement sector is already the Wild West, particularly online, awash with poor quality ingredients and rogue suppliers making spurious claims and unfounded promises. I am not keen to see a freeing-up or relaxation of the regulations around food supplements. Indeed, I would argue for tighter controls on claims and on the supply chain. This is why at Viridian we have a comprehensive checklist of more than 100 checks for every product and full annual audits of suppliers, including renewals of non-animal testing pledges.

Q In what ways can government authorities help move our industry forward in terms of legislation and red tape in 2022 and beyond?

Soo Cieszynska: The government needs to be building our trade deals with European and other countries in a much quicker and efficient manner. Was enough thought given to these implications before Brexit in Jan 2021? A twenty-million-pound question.

Cheryl Thallon: Clearly, Brexit has created an almost overwhelming tidal wave of paperwork, which adds layers of costs, so a streamlining of the borders between the UK and Europe would be greatly appreciated. I would also ask the authorities to maintain a tight grip on claims regulations to avoid further erosion of the expertise found in specialist independent health stores. After all, the more that can be said on a label, the less people may realise they still need specialist advice on what is right for them. Viridian is passionately committed to the specialist sector and investing in further training and education. Staff in independent health food stores ensure that the right product is recommended to the right person for the right reasons.

Simon Bandy: It would be helpful if the Government were to take a stepped-back, more holistic approach to legislation. It seems that they're only reacting to individual aspects, which creates issues for everyone. We've seen the need for Export Health Certificates to be introduced and, just when you think you've got a handle on it, the rules all change again. That would be the biggest benefit to us: having a consistent, clear and defined set of requirements for export which are easy to understand and which don't change every five minutes.

Martin Watson: In the natural health products sector, we don't import a lot from the EU. Look at many of the leading brands and you can see that most of the products are imported from the US. The most significant way government authorities could help our industry move forward is to align our legislation more closely to the US. This would allow us to make claims on our packaging to better explain to consumers what our products are and what they do, highlight the lifestyle benefits and explain the impact of higher potencies and better-quality ingredients, so purchase decisions can be made on efficacy and quality, rather than price. There are so many excellent products available in the US that we cannot sell in the UK because the ingredients are extremely complex and legislation means we can't simplify the offer by highlighting the outcomes they can provide in easy-to-understand lifestyle terms such as 'for bone health' or 'better sleep' – being able to do this would be a huge boost for the whole industry

Q Have supply chain issues improved recently, or got worse?

Simon Bandy: Currently we have seen no improvement in supply chain, ingredients from both inside and outside the EU seeing quite lengthy delays coming into the country, being held at ports for unnecessary amounts of time. In most instances this is not due to the wrong or lack of paperwork etc., but just down to the time these things now seem to take to process. This also seems to be the case in sending products out of the UK, with customs hold ups etc. all leading to a truly unsatisfactory situation. It is also my understanding that come July this situation is likely to get worse as even more stringent checks are due to come into force as further parts of our EU withdrawal come into effect.

Martin Watson: We have seen a small amount of let-up around issues faced during Covid-19 restrictions, such as lack of farming, workers and flights, but getting the raw materials that are needed to make many of our products over in the US and shipping of products continue to be an issue. Like many in the sector, we have struggled to get containers on ships. There is still a backlog at ports following lockdowns and where staff have been working from home or, until recently, facing isolation rules, and we are still feeling the impact of the Suez Canal being blocked for six weeks last year when the Ever Given grounded. As a result, we have been opting to fly products instead, which is a considerable additional cost to our business, but a far better option than being out of stock of products that are in high demand - getting stock to our distributors and retailers is an absolute priority.

Cheryl Thallon: The Covid-Brexit hurricane is not yet over and the Ukraine/Russia conflict will also have an impact on transport costs/delays. There are more than 350 individual ingredients in the Viridian Nutrition range, which are sourced from four continents to select the appropriate plants to maximise the actives and effectiveness. It is a complex network and disturbances are inevitable during global trauma. However, our forward-planning based on 22 years of experience has enabled us to maintain good stock levels thus far.

Q What effect on retail are you witnessing with the rising cost of living and inflation and the resulting pressure on the consumer purse?

Martin Watson: We're not seeing any significant impact of the rising cost of living yet, but retailers are still trading massively down on where they were before the pandemic, despite restrictions being fully lifted, simply because customers have learned to shop online and footfall hasn't recovered. I believe that people who buy premium VMS products will continue to spend on those products as that audience doesn't see supplements as a luxury but a health necessity. I think the impact will be more profound for larger retailers where consumers buy supplements on price and may be more willing to cut them from their weekly shop.

Simon Bandy: As always, rising costs and the squeeze on consumers' ability to spend influence disposable income and it is often the more luxury items that reduce first. Over the past 18-24 months we have seen people turning to more natural alternatives to help keep themselves fit and healthy in the wake of the pandemic, but I do feel as the squeeze continues people are just not going to have the spare cash. To have to decide about heating or eating is a ridiculous situation for many people to be in. But I am optimistic that as the pandemic recedes and the legislation and understanding of Brexit unfolds, we will as a country get on a more even keel, but this will take time.

Soo Cieszynska: Generally the retail side of the business is holding its own although the consumer is becoming more cost-conscious when shopping. We have conscientiously maintained a competitive price for our products, HuxD3 is competitively priced and has been in strong demand during the pandemic in particular. Rising prices are possibly inevitable with the fuel crisis having a knock-on effect to shipping and transport. We will continue to support the consumer and retailer as much as we can.

Cheryl Thallon: I started working in the natural products sector nearly 40 years ago and have witnessed a number of recessions. It is my experience that the higher-end supplements category fares pretty well in tough economic times. When someone knows why they are taking a supplement and gets the results from their daily supplement regimen, they tend to view those supplements as a necessity rather than a frivolous purchase. The 'why' comes from a discussion with a well-trained member of staff at their local independent health food store. More broadly, health food stores offer incredible value for money in the food departments and if inflation really bites, cooking from scratch will become even more economic. Stores offering cookery classes, recipes and so on will become strong in their local community during an economic downturn.