New Zealand Natural Health Exporters Hamstrung By Outdated Regulations
New Zealand’s outdated regulations for natural health products have struck again, leaving local manufacturers unable to export millions of dollars of New Zealand-made products to key markets.
Medsafe’s strict enforcement of outdated rules means New Zealand exporters of natural health products and supplements will be unable to fulfil export sales.
The industry body Natural Health Products New Zealand is calling on Associate Health Minister Ayesha Verrall to step in to help find a pragmatic solution so the industry can continue exporting and fulfil its contractual obligations to its customers.
“No actual rules or regulations have changed, just the enforcement of them, and it puts our exporters in an impossible position. It places their existing customer relationships at risk of long-term damage due to an inability to meet contracts for supply, and it will stifle their international expansion plans. The logical next step would be considering offshore manufacturing,” says Natural Health Products New Zealand’s Government Affairs Director Samantha Gray
For local manufacturer Vitaco this means risking the loss of at least $5 million in export sales (per year) and could result in job cuts if not addressed.
“Our business has been blindsided by Medsafe’s decision in November last year to apply stricter enforcement of an existing regulation in a way that is unworkable” says Craig Kearney, CEO of Vitaco Health Group. “It means that we will be unable to export some of our products to key markets because of this decision and outdated regulations.”
“We understand Medsafe is in a hard position but given how outdated the regulations are and the impact of this decision on Kiwi exporters we think there’s room to apply some common sense.”
There are two issues preventing export of products to international markets. Firstly, the wording on Free Sale Certificates is not accepted by many export health authorities. Secondly, last year, Medsafe changed the Free Sale Certificate Application process so that New Zealand exporters need to sign a declaration that products comply with New Zealand labelling requirements, even for products that will not be sold in New Zealand and were never intended to be.
New Zealand exporters must declare that they are complying with the New Zealand regulations, while simultaneously complying with the regulations of the export markets, even when these regulations are in conflict. For example, Saudi Arabia’s regulatory body requires the removal of the term “Dietary Supplement” from labels, whereas New Zealand requires that term to be on the label. This puts exporters in an impossible position.
This is in contrast to other countries like Australia who compete with New Zealand in the global marketplace and who are able to obtain an “export only” classification for these products from their own governments.
If exporters were to reword their export labels to comply with New Zealand regulations, this would trigger variation or new registration applications in the importing country. These applications can take from six months to five years to process. During this period New Zealand firms would not be able to export those products to these markets. This would be a heavy financial blow, and therefore leaves local manufacturers considering overseas manufacturing options.
PharmaNZ Managing Director Peter Lehrke said the issue needed to be resolved to unlock global growth for exporters.
“It is totally ridiculous that we can’t get an export certificate that attests to product quality or allows an ‘export only’ product that doesn’t have to comply with our own hopelessly out-of-date regulations.“
Dr Bo Hendgen, founder of Absolute Essential, says that “clear regulations which are aligned with global regulations across the Natural Health sector would be a real asset to our company and allow us to present offers to global distributors and grow our export business with confidence.”
Natural Health Products New Zealand’s Government Affairs Director Samantha Gray says this is yet another example of New Zealand’s outdated regulations stifling the growth of a multi-billion dollar industry.
“New Zealand’s regulations for natural health products are decades out of date, and are stifling export opportunities that could aid the economic recovery from COVID19. As a $2.3 billion dollar industry, we could be making a much larger contribution to the economy, but outdated regulations prohibit us from properly promoting the health benefits of our products. This puts us at a major disadvantage to competitor countries whose modern regulations allow this. These rules force us to compete with one hand tied behind our back.
“Now, with Medsafe issuing a new interpretation of these outdated rules, the problem has got even worse.
“The Government has been taking far too long to modernise these regulations. Now they urgently need to step in and get Medsafe to come up with a pragmatic solution that will allow companies like Vitaco to get back to business and export its products again,” says Samantha Gray. “It goes without saying that we also need urgent action by the Government to implement modern and fit-for-purpose regulations. The content of Natural Health and Supplementary Products Bill, which was pulled after its second reading for solely political reasons, is a pragmatic solution. Nothing has happened since, and we have been asking why a new Bill can’t be re-introduced to parliament now that NZ First are out of the picture.