We broke the news earlier this year of an impending rise in the cost of supplements such as protein powders, pre-workouts, post-workouts and weight gainers and with the recent vote in parliament approving the imposition of VAT across all classes of supplements which had previously been exempt it is time to thank those who fought with us long and hard to combat this rise. Unfortunately, the vast majority of the industry seemed to take this lying down and showed little appetite to rouse their customer base to fight the plans.
Now that the tax is going ahead what will this mean?
On the surface it makes a 5lb tub of protein retailing now for £40 go up in price to £48 after 20% VAT on protein is added. A £30 pre-workout goes up to £36. In the current economic environment this will come as a blow to consumers who already are facing a drop in disposable income due to the recession.
As a business this is going to present a big challenge as some consumers will feel priced out of the market for particular supplements. At the high end of the market we can envisage a big drop in sales. While manufacturers may potentially lower the margins they operate on, this is likely to have a negative effect on their businesses and with big brands such as Maximuscle and BSN now owned by GSK and Glanbia respectively, the pressure on profits is unlikely to see these owners go for a cut price, low margin business model after the millions they shelled out on these brands and with the competition at the lower end of the market being so intense.
Predator Nutrition will be keeping a very close eye on the situation and, if necessary, will bring out our own range of supplements meeting the highest standards possible while, by eliminating distributors, will result in an ability to keep prices down. In addition, we will be working very hard to secure the very best deals possible from brands we import exclusively where we believe the likes of iForce Nutrition will be able to step into the gap in the market which opens up if the likes of BSN become priced out of the market.
As discussed in our series on underdosed protein (see the final part here) the rise in the cost of protein prices from the dairy manufacturers has led some to go down an unethical route so we definitely recommend people re-read that series to stay aware of any potential degradation in their protein powders.
While some brands may attempt to deceive consumers, Predator Nutrition will continue to stay abreast of this and ensure that we do not stock and remove from sale any which engage in this practice.
We can envisage some manufacturers deciding to water down their products to make them cheaper, by adding cheaper ingredients. Where this happens we will ensure customers are kept apprised via the blog and forum so they can make an informed judgement. We don’t particularly want to see quality brands lower their ingredient quality but accept that for some, a lower quality product will make more financial sense.
It’s an interesting few months ahead of us from October when the new protein tax comes into effect so as we hear of more developments we will keep our readers aware of any news.
© 2012, Reggie Johal. All rights reserved.