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News Release from: Chemical Business Association
Edited by the Laboratorytalk Editorial
Team on 23 April 2008
Reach discounts 'are of doubtful value'
Chemical Business Association says that the recently announced discounts on Reach registration fees were of 'doubtful value' in making the new legislation affordable for small and medium-sized firms
When the European Commission announced its proposed Reach fees in December last year, the CBA condemned them as excessive Other industry bodies shared this view
This article was originally published on Laboratorytalk on 24 Feb 2003 at 8.00am (UK)
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Cefic, for example, said the scale of fees would result in a lack of trust in the operation of the Agency and the legitimacy of its fee structure.
The European Commission has now formally confirmed the scale of Reach registration fees and announced a range of discounts for SMEs.
Medium-sized firms qualify for a discount of 30%; small firms 60%; and micro firms qualify for a discount of 90%.
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"The commission claims these discounts are designed to preserve the competitiveness of smaller firms and, at first glance, they appear generous," said Melvyn Whyte, chairman of CBA's Reach task force.
"But on closer examination they are of doubtful value to many smaller businesses because of the way the commission is defining small and micro businesses," he added.
The definition of each size-category is based on thresholds relating to headcount, annual turnover and balance sheet total.
"The thresholds contained in the definitions used by the commission have remained at the level set when they were first announced in May 2003.
"In the intervening five years, chemicals have been subject to a period of significant price inflation.
"For many companies, this has resulted in sharply increasing levels of annual sales.
"It means that - today - only a very few firms will actually qualify for the 60% and 90% discounts because their turnover will exceed the small and micro thresholds," said Melvyn Whyte.
The CBA's own membership illustrates this point.
Only 8% of the member companies currently qualify as micro businesses under the commission's definition, as compared with 34% which would have qualified in 2005.
"It is inconceivable that the commission did not realise that basing discounts on thresholds that are five years old would - from the outset - only serve to exclude many of the businesses it intended to help.
"The commission must also realise that, in future years, the effects of price inflation would only serve to exclude many more businesses," said Melvyn Whyte.
"If this is a genuine error on the part of the commission, it should move quickly to rectify it.
"We suggest that the definitions thresholds are retrospectively adjusted for price inflation over the last five years.
"We also suggest that the commission makes a commitment to further adjustments for inflation throughout the implementation period of Reach - to 2018.
"This is the only way it can give full effect to its original intentions," said Melvyn Whyte.
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