Plain-Language-Labelling Impact on Industry
Deloitte recently carried out a survey with the objective of assessing the influence of Plain-Language-Labelling on the Natural Health Products (NHP) industry in Canada. The study aimed to examine the effects on stakeholders as well as gauge the general attitude regarding the proposed change.
During the stakeholder meeting hosted by CHFA, the survey data involving a total of 310 participants was presented. The findings revealed that the industry, consistent of small businesses (86% of Canadian NHP businesses and 80% of global NHP businesses are categorized as small businesses, employing 50 employees or fewer) will experience a significant impact as a result of the proposed change. Below is a summary of the general findings:
The top industries expected to be affected by the change were identified as follows: Retail, Manufacturing, Distributor, and Importer.
The majority of businesses were opposed to the proposed change in labelling requirements. In fact, a total of 80% expressed strong or moderate opposition.
The majority of businesses also indicated that the proposed changes will have an overall negative impact on profits
The study also took an in-depth look at specific issues, identifying the following:
90% of businesses either are expecting to have limited or no capacity to absorb additional costs associated with the change.
76% of businesses responded they they are likely to remove their products from the market.
45% of businesses responded that they expect their operations to shut down, while 48% are looking towards offshore solutions.
59% of participants agreed that the proposed changes will increase the likelihood of non-compliant products.
45% of retailers are expecting to remove product offerings and most indicated that the changes will impact the products they are offering,
50% of manufacturers expect that the cost will increase by 10% or more.
According to reports, the Natural Health Products (NHP) industry generated sales of 4.4 billion dollars in 2007. This figure significantly grew to 13.2 billion dollars in 2021, with a substantial contribution of 11 billion dollars to the GDP. The NHP industry's contribution is undeniably substantial, and its positive effects extend beyond economic benefits.
For every 1 million dollars spent by the NHP sector, it supports the existence of 7 jobs, and each dollar spent generates $0.21 in government revenue. This flourishing industry plays a crucial role in job creation and contributes to government funds.
However, the anticipated product labelling changes are likely to impede this growth. Based on the collected data, the impact on the industry, and consequently on the GDP, is expected to be significant. It is important to note that these predictions do not account for the recently proposed governmental fees for product licence applications, which are expected to further compound the potential damage.
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