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    Features

    Experts Address International Issues

    Challenges and opportunities to doing business in the global marketplace.

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    06.02.14
    The dietary supplement industry continues to expand globally as consumers around the world are discovering the convergence of good nutrition and better health. Like all industries with a worldwide consumer following, the dietary supplement industry is facing challenges on both the business and regulatory fronts, and stakeholders are seeking solutions to allow companies to market their products responsibly and successfully on an international scale.

    Nutraceuticals World talked with Jim Griffiths, PhD, vice president, scientific and international affairs at the Council for Responsible Nutrition (CRN) and John Venardos, senior vice president, worldwide regulatory, government and industry affairs, Herbalife, Ltd. and chair, CRN-International.

    NW: What are the biggest challenges to doing business internationally in the nutraceuticals industry?

    John Venardos: Herbalife operates in over 90 markets around the globe. The lack of harmonized regulations makes it difficult, if not impossible, to formulate and commercialize the same formulas globally. Thus, our conventional foods and dietary supplement formulas (and claims) vary, dependent on local regulatory requirements. As a direct selling company, some markets restrict the sale of supplements to pharmacies or specialized stores, which represents a non-tariff barrier to trade. Still other countries, owing to protectionist policies, impose high tariffs on imported products or Value Added Tax on imported products not produced locally.

    Jim Griffiths: John’s exactly right. Having different rules in different locales creates a patchwork that necessitates constant anticipation, comprehension and establishment of a local footprint to progress the business. The cost of doing business globally for companies now includes having a scientific/regulatory physical presence that is keenly keyed into what’s happening on a local level.

    NW: How is CRN responding to these issues?

    JG: CRN provides a platform to discuss these issues in a reasoned and constructive fashion and then engages directly with regulators, taking a science-based approach. Dialoguing is key and CRN-International takes the lead in bringing together regulators, academicians, researchers and industry experts through scientific/regulatory conferences that can serve to highlight regulatory discrepancies and foster discourse on available or potential paths forward.

    JV: Through CRN’s International Trade and Market Development Committee, which I chair, the association has identified priorities, which it periodically raises directly with international regulators, as well as through dialogue with the U.S. Department of Commerce country desk officers and with the U.S. Trade Representative.

    JG: Here’s an example. Gaining regulatory approval for novel ingredients presents challenges as to what constitutes a dossier on safety, efficacy and/or recommended/allowable concentrations, and may be so country-specific that dossiers may need to be developed de novo for each national or regional market. At CRN our members work collectively to establish these kinds of recommendations.

    NW: How should companies approach varying regulatory requirements around the world?

    JV: First and foremost, companies should undertake to gain thorough knowledge of regulatory requirements prior to registration and notification to ensure compliance. Additionally, given challenges arising from economic adulteration, manufacturers need to take special care to ensure their supply chain.

    JG: Trade associations like CRN provide a sounding board and guidance in these areas, but not a replacement for a company’s own regulatory and legal personnel and consultants. But we can bring like-minded companies’ concerns, especially those companies facing similar regulatory issues or constraints, to the attention of regulators, and help work through solutions that will benefit business and consumers, and at the same time help regulators streamline their processes. 

    NW: Where do you see opportunities for growth? And what factors are driving this potential?

    JV: One of Herbalife’s core product offerings involves products targeted for weight management. Given the global obesity epidemic, we see this as a key growth opportunity. Additionally, given the aging population (in the U.S. and elsewhere), consumers see the use of supplements as a way to maintain health so as to reduce the risk of future disease states.

    A 2013 economic report from Frost and Sullivan, supported by a grant from the CRN Foundation, showed healthcare cost savings that could occur as the aging U.S. population uses targeted nutrients. This is an important fact-based set of data that should be shared broadly with international markets, and to the extent that CRN’s fellow associations can undertake similar research projects locally, could be influential in shaping national policy reforms to allow greater use of supplementation.

    NW: Let’s talk about some specific markets. What obstacles confront companies looking to enter China’s supplement market? What factors are driving growth in South America? And how can the industry spur growth in more developed markets like Western Europe and Japan?

    JV: As the result of China’s 2005 direct selling regulations, companies wishing to commercialize health foods must go through a time-consuming product registration process with the China Food & Drug Administration that can take upward of two years (inclusive of local testing through an approved China facility). Health foods are limited to using 27 approved health claims, which may not necessarily reflect the intended purpose of similar products sold overseas. Also, manufacturers must ensure compliance with GMP and sourcing requirements.

    South America is one of our fastest-growing markets, driven in part by the desire among consumers for ensuring good health and proper weight management.

    Through engagement with European regulators via existing organizations such as Food Supplements Europe, manufacturers and marketers can collectively work to ensure alignment of regulations, particularly those involving the use of science-based upper limits and the use of botanicals supported by sound science.

    In Japan, CRN is working with the Association of International Food & Nutrition and several other NGOs to collaborate with the Consumer Affairs Agency, which is developing an improved regulatory paradigm allowing for claims on supplements.     
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