New $2.3b Natural Health Industry’s Power Stifled By Old Rules


Business

Nutraceuticals is the country’s fastest-growing food and beverage sector, but the industry is tired of operating within the constraints of 36-year-old legislation.

The natural health products industry has been growing at a rate on par with infant formula, but exporters are being held back by outdated regulation limiting how they compete on the global stage. 

According to industry body Natural Health Products NZ, which represented 140 businesses, or 85 percent of the sector, nutraceuticals contributed more than $2.3b to annual GDP in 2019.

“But we could be so much bigger if we weren’t held back by old regulations,” its government affairs director Samantha Gray said. 

Gray said strong global growth due to consumers seeking general wellness products since Covid-19 had been a missed opportunity for the sector because nutraceuticals, a category of natural products that mostly fits into Dietary Supplements regulations currently, were unable to explicitly market the health benefits of their products to health conscious consumers.

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Nutraceutical products, which are food products that also have evidence-based health benefits, currently fall under the Dietary Supplements 1985 Act. 

Under this legislation, dietary supplements such as vitamins and mineral tablets are not allowed to be advertised or labelled for having any therapeutic benefits.

This meant a nutraceutical product sold by New Zealand with the same ingredients as an Australian product, could not advertise its health benefits, while the latter could. 

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“Where we get in the tricky area between health and food we’re not quite sure how to define products. We’re aware of this dilemma and we’re trying to move as quickly as we can on this but again, it’s the interface with overseas agencies that often causes the challenges for us.”
– Damien O’Connor, Food Safety Minister

Gray said a lack of specific regulation for nutraceutical products put New Zealand natural health products at a significant disadvantage because the consumers were more likely to choose products that had claims of helping with joint pain, or sleep for example.

She said there was also no exemption for exporters, so companies were selling overseas based on domestic regulation. 

“We’re way out of step with our trading partners,” Gray said.


Natural Health Products NZ government affairs director Samantha Gray says NZ is missing out on potentially millions from regulation stifling marketing, exports and innovation.

She said a lack of a framework also slowed down innovation. 

Australia categorised nutraceuticals as “complementary medicine” and were regulated under the Therapeutic Goods Act 1989. 

Its industry was worth about AU$5.3 billion (NZ$5.5b) according to the industry peak body’s audit report published in 2019, more than double the worth of New Zealand’s natural health products industry. 

What frustrated those in the natural wellness industry such as Gray was that New Zealand came very close to having specific regulation for the industry. But the Natural Health Products Bill, which had more than 800 submissions, was killed after its second reading in 2017 when the government changed.

“It was nothing but politics. The bill was pulled because of NZ First, and since then the Government’s been wasting everyone’s time.”
– Samantha Gray, Natural Health Products NZ

The bill aimed to establish a system for the regulation of low-risk natural health products, a regulatory authority within the Ministry of Health, an advisory committee and an online database of natural health products.

Gray and her industry were desperate to revive this bill. 

“It was nothing but politics,” she said. “The bill was pulled because of NZ First, and since then the Government’s been wasting everyone’s time.”

Gray brought this up again last week at a trade event led by the Ministry of Foreign Affairs and Trade, which was attended by Food Safety Minister Damien O’Connor.

O’Connor said the government was aware of the “dilemma” the sector, which lacked proper authority and an identity, faced. 

“We’re very focused first and foremost on food safety. Everything that goes from New Zealand must be safe and uphold our reputation as reliable certifiers and people overseeing that,” O’Connor said. 

“Where we get in the tricky area between health and food we’re not quite sure how to define products.”

“We’re aware of this dilemma and we’re trying to move as quickly as we can on this but again, it’s the interface with overseas agencies that often causes the challenges for us.”

O’Connor also alluded to the Pan Pharmaceuticals debacle that led to the alternative medicine industry in Australia being forced to pay out hundreds of millions in compensation due to manipulated tests for false results and substandard manufacturing processes.

The Pan Pharmaceuticals recall of 2003 was the world’s biggest medicines recall at the time, the Australian Therapeutic Goods Administration said. It was found substandard processes could have increased consumers risk to severe allergic reactions, including anaphylaxis and severe organ damage.

But Gray’s argument was having regulation could limit the risk of something like this happening in the first place.

“The best way for New Zealand companies in the medicinal cannabis space to survive and thrive would be for volume production. A natural products bill would allow for this, for example the ability to make and sell 20mg capsules and soft gels easily.”
– Shane Le Brun, Medical Cannabis Council

Last year the medicinal cannabis sector was banking on the legalisation of recreational cannabis to potentially reduce the cost of product for patients and develop CBD-infused nutraceutical products. 

While the referendum for recreational cannabis did not pass, medicinal cannabis companies were also seeking a framework similar to the Natural Health Products Bill.  

Medical Cannabis Council founder Shane Le Brun said to allow access off prescription, cannabidiol-infused products had to be out of the medicine’s act, and for that there needed to be some legislation to regulate.

“The best way for New Zealand companies in the medicinal cannabis space to survive and thrive would be for volume production. A natural products bill would allow for this, for example the ability to make and sell 20mg capsules and soft gels easily,” Le Brun said. 

Le Brun said a natural health bill would also bring a degree of control over the nutraceutical sector and products that could have low level health claims and benefits. 

“For example we’ve got melatonin that’s a prescription medicine as a sleep hormone but it’s actually available in trace amounts in cherry juice. At a lot of pharmacies they’ll be selling this fortified, thick, gluggy cherry juice as a sleep supplement but actually the doses are homeopathic.  

“It’s a complete ripoff looking at the cost versus Melatonin content, the prescription medicine always wins. So regulation would allow that melatonin product to exist and perhaps be stronger and more effective while regulating more safe.” 



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