An organisation representing natural health product manufacturers says outdated regulation is costing Kiwi businesses millions of dollars’ worth of export deals.
Natural Health Products NZ is calling for the Government to introduce modern legislation togovern the industry to support trade and economic development.
Current regulation is “so old that New Zealand is now out of step” with its trading partners, and the rules were “stifling R&D”, says Samantha Gray, government affairs director for Natural Health Products NZ.
“Our exporters can’t capitalise on export opportunities,” Gray told the Herald.
Work was underway on sector-specific legislation (the Natural Health and Supplementary Products Bill), which reached its second hearing, to establish a system for the regulation of low-risk natural health products, but this was recently pulled and current governing legislation was rolled over for another five years.
The sale and manufacture of natural health products currently fall under the Dietary Supplement Regulation 1985. There is no specific regulation for “natural health products”.
“It’s a bad situation to roll over such ancient regulations – which continues to constrain our export growth and domestic consumer choice when they could fast track the natural health products bill that had already been peer-reviewed several times,” said Gray.
She said there were multiple issues with current regulation, including that NZ products could not make evidence-based health claims and benefits, making it impossible to compete with identical products in offshore markets, such as China and Southeast Asia.
“New Zealand exporters lose sales because of this issue.
“Of course the consumer is going to choose the product that appears to have the stronger health benefits, when in fact they are exactly the same.”
Other barriers include the inability of exporters to source export certificates from the government, required by a number of markets in Southeast Asia and the Middle East.
Current legislation “stifles regulation”, she added.
“What you’ve got is an industry that focuses on fantastic New Zealand ingredients and there’s a lot of scientific R&D that’s going on, but because of the regulations the research that shows these ingredients and products have health benefits can’t actually be used to support the product in the market, and so it stifles innovation – who would spend the time and money to do that research if you can’t use it? That has a flow-on effect of consumers not being able to be fully informed about what products do, and that flows on to export because you can’t use R&D to differentiate yourself in the marketplace.”
A spokesperson for the Ministry of Health told the Herald that the agency was currently developing a new regulatory scheme for natural health products.
“A lot of work has been done and we are continuing to work with the sector to ensure regulations are proportionate to the risks of these products and ensure compliance costs are fair,” the spokesperson said in response to questions of outdated regulation.
“The Natural Health and Supplementary Products Bill 2011 was not reinstated by Parliament however the Ministry of Health has continued to work to develop options to regulate natural health products. During 2020 this work was impacted by the need to respond to the Covid-19 pandemic.”
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The spokesperson said the regulatory scheme under development would support consumer safety and enable them to make informed choices, and make sure rules were clear and fair to support the industry and exports.
The Herald has sought further information including on when the scheme will be introduced.
A recent survey by Natural Health Products NZ found that 90 per cent of its 145 members cited regulations as the biggest barrier to growth. Of this, 54 per cent of responses identified New Zealand regulations and government issues as the problem.
Natural Health Products NZ members represent 85 per cent of the local sector.
More than 70 per cent of the natural health products sector are exporters. The sector contributes $2.3 billion to the New Zealand economy each year.
“What we’re finding now, even more so than previous years, is we are missing out on significant export opportunities because of our current regulation,” said Gray, reflecting on strong double-digit growth within the sector.
Because issues with the regulation were “multiple”, she said, it affected different countries in different ways: “You’ve got the issue around innovation and not being able to make validated health claims on products, that actually affects the ability to sell into quite a number of markets, while the export certificate effects other markets.”