EU Food Supplement Directive - Essay Example

The effects of EU food supplement directive on the operation management of Self Heath Enterprise limited Introduction This project is about the effect of the EU Directive on the use of supplement on the operations management of Self Health Enterprise Ltd. The study looks at the effect of this directive on the overall operation of this company in terms of how the effects of the directive have affected its operation. In June 2002, the EU parliament published a food supplement directive which was meant to harmonise the rules that govern the definition, the composition and the labelling of the food supplements in the member countries. The main goal of this directive was meant to offer a high level of proportion and information to the consumers who have been exploited and given the wrong kind of information in the past. The directive which took effect in 2005 was also meant to ensure free movement of these products across national borders since there would be harmonised standards of all the supplements. The directive (2002/46/EC) therefore gives important definition on the limits and ingredient for supplements. (Jungbeck, 2004, p. 1) Among the 25 nations which makes up the EU, the EU has put in place directive regarding Dietary supplements which actually reclassifies vitamin supplements as medical drugs and allows for low dosage level in the usage while at the same time it outlaws many other supplements ingredients which are currently unavailable. The EU has therefore created a positive list which mandates some of the dietary supplements which are supposed to be sold in the region. Among the victims of this list has been vitamin E which is widely used by the population. Although this has been turned to legal battle between the health companies and the EU court ruling from the EU courts has given a go ahead in the implementation of the directive. This has been upheld in the sense that it is meant to protect the pupation from the adverse effects of these supplements. The alliance for Natural Health has been one of the umbrella bodies which have taken various measures which are meant to reverse the effect of the directive. It has been calling for the EU to overturn the directive and allow the sale of the supplements to continue. But in 2005 the EU court in Luxemburg gave a ruling which confirmed that the directives were put in place to stay and protect the health of the EU residents. It has therefore been argued that the EU has given the positive list of ingredient which should be used in the supplements and therefore by banning the use of some ingredients, the EU is acting in the interest of the public health. A dietary supplement which is common known as food supplement in the market is a aimed at supplying the important nutrients to the body like vitamins, mineral fatty acids, amino acids and others. Therefore it is usually intended to supplement the supply of nutrient form food especially for the import nutrients which are not supplied in adequate amount in the body. But scientific research has proved that some of the mineral supplement which are used are actual harmful to the body and this has been the main argument of the EU. It has been calling for the continued sale of supplements which are beneficial to the body and banning of those which are not beneficial to the body. The EU directive has shown that there has to prove that the supplements are safe to use both in their quality and their quantity. This is based on the fact that some of the vitamin supplements are very essential when supplied in small amounts but they can be very harmful when the they are supplied in large amount to the body notably among this being vitamin A which is widely supplemented. Therefore the EU directive asserts that it is only those supplements which are deemed safe for the body that are supposed to be sold. The EU has also established that food supplement must not be labelled with drug claims which are contrary to the health concept but which have been widely practiced in many countries in the EU. However this has differed from one country to the others. This directive has been expected to have various implications on the supplement market. Self Health Enterprise Ltd is one of the companies which have made fortune in the supplement market. The company has been operating in the EU market for along time and it has created a competitive edge in the market. The company has been supplying various types of supplements like vitamins and others. However with the EU directive in place, there have been obvious effects on the supplement business. It must have been affected in a particular way by the directive. Like all other companies in the UK his company has been in the frontline to criticize their directive. It may not yet be understood weather the company has been opposing the directive due to the impact that it will have on its overall business or if it is due to the value that the consumers are going to lose which means that the directive is getting on its way of providing quality services to the consumers. This study will therefore look into the operations of the Self Heath Enterprise Ltd to assess how it has been affected by the changing business landscape. It will look closely at the operations of the company in order to understand how it has been affected by the directive and the likely changes that is it likely to make to its operation in order to understand how it has been operating. Aim(s) & Objectives The aims and objectives of this researched is to get to the bottom of the effects of the directive on the operation of the health companies. By looking into the details about the effects of the this directive on Self Heath Enterprise Ltd, the research will be amending at understating the impact of this directive This aim has been formulation with an understanding that all the companies have not been affected in the same way by the directive. There are those companies which have benefited from the directive while there are those which are likely to have suffered from the provision of the directive. For example multination companies may have benefited from the directive and are suspected of having played a hand in its formulation, while the local companies may have been affected negatively in their operation since they are likely to lose a large segment of their market. Therefore this study will be carried out with two broad aims. First the study will assess the perception of the consumer and the owners of these health companies. This understand of the perception especially by the consumers is likely to give a more insight on the validity of the directive from the consumer point of view and also help to evaluate the possibility of growth of the black market on the banned supplements if they are in high demand from the consumers. These aims will give us an understanding of the effects of this directive on these companies. This in turn will give a wider picture of its effects on the overall supplement industry. The following will be the aims of the study: a) To evaluate the perception of the directive by the consumers and the industrial players in the supplement market b) To assess the effects of the directive on the operation management of the heath companies and the steps they are likely to take in the future In order to understand the subject well, the study will also be carried out based on a number of objectives. In this case there will be important objectives which the study will be expected to meet in order to give an understanding of the whole topic. The following will be the main objectives of the study: To evaluate the perception of the consumer about the directive To evaluate whether consumers are likely to purchase the banned supplement when they are offered To evaluate the perception of the operators of the health companies about the directives To evaluate the changes that they would recommend to be made in the directive To evaluate the effects of the directive on the operation of the company with the changing business landscape To evaluate the steps the businesses are likely to take in the future These objectives will be important in helping this study to understand the view of these stakeholders about the directive. They will also help the study to understand the recommendations that they can make on the directive and the future steps that they are likely to take in light of the court ruling. These objectives will therefore help the stud to evaluate whether there is likely to be compliance from the consumers and the owners of the health companies. This will help the study to asses the possibility of rise of a black market. Scope The supplement industry has been growth rapidly and it is one of the latest and the rapidly growing market in Europe. The industry is still young compared to other industries but it is growing large. Therefore the large scope of this study will be the supplement industry in the EU region and how it has been affected by the EU directive which has banned the use of some ingredients and which has also given important guidelines which are expected to be followed in the course of the study. Although the industry is large the study will concentrated on only one Health Company and its customers. Therefore the scope of the study will be to asses the effect of the EU directives on the management operation of Self Health Enterprise Ltd. Therefore the study will concentrate on the important objective which can help it to understand the effects of the directive on this company and its consumers. The study will include the consumer in the study since they are also major stakeholders in the whole process and they are likely to play a part in the implementation of the directive. Preliminary Literature Review & Sources of Information The supplement market has been growing wide in the UK and in the recent past it has growth to be a multibillion industry which has employed many people and at the same time provided health benefit to majority of the population. The spending in the industry has also been growing rapidly with the increased consumption in the industry owing to the health benefit of the supplements. There has been increased spending on the food supplement and herbal remedies in the UK and in the whole Europe in the recent past. Traditionally in the UK, regulation of the industry has bee provided by The Trade Description Act 1969, Food Safety Act 1990 and The Food Labelling Regulation 1996 which was later amended din 2004. However there has been increasing concerns about the quality and the type of the supplements that are sold by the health companies in the whole of Europe. This prompted the EU to come up with a European Commission Food supplement (2002/446/EC) and herbal remedies (2003/24/EC) which are all available EU directives and which came to force in 2005. There has been a lot of court battle which have been aimed at ensuring that the EU changes these directives. The UK ANH and other bodies have all gone to court to battle this directive but they have all lost with the court asserting that these directives are all meant to protect the health of the consumer. But as Hasslberge (2007) put it the directive can be said to be void of transparency and there seems to be conspiracy in the implementation of the law. There are more and more people in the UK who have joined the supplement market either and consumer or as sellers. Therefore the directive which has been propose to ban more than 75% of all the vitamin and mineral from in the market has definitely been hurting a large segment of the population. The ruling which was delivered at Luxemburg showed the directive as enacted by the EU has been un-proportional with the principle of the community laws like the requirement for protection and others which are important fro the overall growth of the EU community. There the directive has been seen as invalid when enacted under the EU law. However this ruling has been overturned. However the legislative has been found to have an impact on the operation of the supplement business. With a ban on more than 75% of different forms of vitamins in the market, these businesses are therefore likely to suffer from low sales and in effect this will reduce the overall profit from their operation. Mckee (2007) shows that this directive is not meant to help the consumer but it has been centred on creating single market for the supplements. As has been expressed by many people there is a likely hood that there will few major manufactures who will take the advantage and explore the condition which have been provided by the directives and therefore they are going to create a single market. They will be able to roll out their operation in the wide EU market taking advantage of the harmonised supplement standard throughout the EU region. Therefore he shows that this directive has not been putting place with the consumer in mind. It is meant to benefit the multinations who have the ability to invest capital which will conform to the demands of the market. The bitterness which has been expressing the UK companies has been that they are still covered under the UK act and still the EU directive is cutting their throats more. The UK laws cover all the foods and food supplement and therefore there should no be other directives which will try to regulate the industry furthers. (Eberhardie, 2007) Hession (2008) assert that in the current era of freedom and liberty, there has been unending wars between the government and the business world over the effects of the regulation on their operation. He presents it as a case between the authority and the government which have been advocating fro different interest in their directive. Whole the government has acted as a protector of the people; the business has been presented as unmindful of the welfare of the people and perhaps the more the reason why the government has been forced to come up with directives which are meant to protect the citizens. Research Methodology Research methodology is important in any study as it assist the study to collect data and analyse it in order to get the results fro the study. Therefore there has to be an effective research designs for that the research can meet its objectives. In the methods research design, the sampling procedure, data collection procedures and other are very important in helping to carry out the study. (i) Research design This study will use a survey research design. This is because it is a qualitative research and therefore it will use a survey in the data collection process like other social research. A survey research design will help the research to collect data from a number of samples that will be selected without necessarily subjecting them to an experimental process. The study will use a case study of Self Heath Enterprise Ltd which is one of the leading UK Company dealing with supplements. Through the case study, this study will be able to collect concentrated data which can be easily applied to the rest of the companies. (ii) Sampling procedure The scope for the study is the larger supplement industry in the EU. However it will narrow down to specific sector of this industry and therefore the sampling frames will the UK health companies. The study will select Self Heath Enterprise as the main case study whetich will be used in the data collection process. All the samples for the study will be collected from the company and it is assumed that these samples can be applied to the whole population. Therefore the study will select two managers from the company who will be interviewed on the overall performance of the business. The study will also select five consumers from the shop who are going to be interviewed about there perception of the industry. Therefore in the overall the study will have a small sample of 7. Random sample will be used to select the samples fro the study. (iii) Data collection procedure The study will collect both primary and secondary data. Primary data will be collected from the samples of the study. In order to collect qualitative data, the study will specifically select an in-depth interview as the main data collection method. An in-depth interview will be important in order to get all the information which is required from the sample. This method has also been selected because the same size that is been used for the study is small enough to allow for its use. The study will also collect secondary data. Secondary data will be important in order to benchmark the result of the primary data. Secondary data will be collected from various sources and will mainly involve the comparison of the EU directive and the perception of the sample about the directive. The secondary data collection will also involve a review of the companies annual performance report in order to assess whether there has been any change in their performance since the directive was enacted. This will be important in order to benchmark the results of the primary data. (iv) Data analysis Since the research is a qualitative social research, simple data analysis method will be used. This means that the data collection process will include the use of simple percentages, means, standard deviation and others in order to analyse the data effectively. These methods will give the most important data that will be used for the study. Time Plan Month Questionnaire formulation Testing questionnaire Data collection Data analysis September XX XX October XX November XX December XX January XX References Eberhardie, C. 2007, Nutritional supplement and the EU, Proceedings of the Nutrition Society (2007), 66:508-511 Cambridge University Press Hasslberge, S. 2005, Supplement directive lacks transparency. Retrieved from www.alliance-natural-health.org on 9th August 2008 Hession, D 2008, Health Threat from EU and UN, The New American, August 2008 Jungbeck, K. 2004, Food supplement directive set to overhaul Europe, Euro monitor Archive Mckee, J. 2003, Food Supplements: The EU Threat. Sovereignty Organization Quality Guide for Food Suplments, 2008, Guidance for the manufacture of safe and consistent supplement across EU, Available at http://www.ehpm.org/pdfs/8990EHPM%20Report%20for%20web.pdf Read More