Some Advice on Breaking into the Chinese Nutrition Market (Part 1)

As a China-based nutrition business consultant, I receive many inquiries from US dietary supplement manufacturers and marketers each year. Most of these inquiries are about the changing Chinese nutrition regulatory environments and whether they can find opportunities for their products in China.

First I’d like to talk about the regulatory change in China. In June this year, China Food Safety Law was put into effect once the China Food Sanitary Law had completed its intended mission. Meanwhile, as an important segment of food industry, the nutrition regulations would change as well. Almost at the same time, a draft version regulation, which was called Health Food Supervision and Administration Regulation and was worked out by the State Food and Drug Administration of China (SFDA), was publicized by China State Council for public comments.

In China, the people call dietary supplements “Health Food,” which include two categories: 1) vitamin and mineral based nutritional supplements, and 2) functional foods for special health purposes and special consumer groups. The Chinese nutrition industry and market is governed by the SFDA.

The SFDA had not done a good job over the past five years (2003-2008.) In order to tackle problems like exaggerated health functions, problems with drugs being added into health food products and dealing with ingredient dosage shortages, the SFDA made a very rigid function evaluation and product registration system. This system is also costly and time-consuming. If one company wants to get its product approved before marketing, it could pay roughly $40,000-50,000 for testing and evaluation. Additionally the processing time could last for one to three years. Public criticism on this system is increasing currently in China. The focus of the debate is the regulatory system.

An increasing number of companies think that the SFDA should learn from U.S. Food and Drug Administration (FDA), by doing away the current rigid registration system and adopting a thorough record-keeping system. The companies commented that this big expenditure had inhibited new product innovation and set a barrier for small and middle-sized enterprise (SME) nutrition companies. This system is bad to the overall development of China in the nutrition market and few companies can benefit from this system. The testing and function evaluation areas have already been monopolized by particular consulting firms and SFDA-appointed laboratories. If this system is stopped, the consulting firms and SFDA-appointed laboratories' mentioned above would not make as much money as currently. After any possible system reform, many new nutrition products could be rushed into the market and may lower the current prices, meaning consumers could benefit from this reform. The record-keeping system would require the government to administrate the market entry, products delivery, products sale and advertising all at the same time. In my opinion, Chinese consumers don’t like a lazy government that only focuses on market entry.

To read the second half of this article, follow the link below.

Andrew Liu is the chief consultant of CNutrInfo, a China-based consulting firm specializing in nutrition products Chinese label layout, China regulatory compliance and China nutrition market research. Email: [email protected]

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