As the European Union moves ever closer to a Directive on Traditional Herbal Medicinal Products, Italy—keeper of some of the most respected herbal traditions in the region—is shoring up a regulatory framework more compatible with DSHEA and the American approach to herbal supplements. Michele Bernelli reports.
Italians have always been particularly adept at manipulating conflicting laws to ensure market freedom. It is no surprise, then, to see Italy bucking European momentum in this area, given a buoyant herbal industry driven by consumer rejection of pharmaceuticals and a grassroots rediscovery of self-care and safe natural remedies.
Italy's herbal industry is built upon specialised health stores called erboristerias (herbal stores), which are in jeopardy from both the EU Directive and a pharmaceutical monopoly on the sale of all medicines—even registered, traditional medicines.
The liberal position adopted by the Italian Health Ministry has been welcomed by the industry. In August 2002, it signed a Circular Letter extending the labelling and notification procedures of the European Food Supplements Directive for purely herbal combinations.
The Ministry Guidelines
This new regulation means herbal products already on the market will continue to be regulated under food law and provide guidelines for the introduction of new products. Herbal supplements cannot make therapeutic claims (no cure or prevention of a given pathology), but a range of health-related claims will be permitted and definitions are being appraised by the Health Ministry. All labels must gain Health Ministry approval and a list of some 900 herbs—created a few years ago for a never-born national law for herbalists—is an unofficial, but accepted, reference guide for safe ingredients. Combinations with other natural non-herbal substances, such as fish oils or beehive products, are accepted. For any new ingredient not included in the list (for example, rhodiola (Rhodiola rosea) or sutherlandia (Sutherlandia frutescens)—a more extended technical dossier must be submitted by the producer or the national distributor.
Manufacturers have an 18-month delay with an April 2004 deadline to comply with a limited number of GMP requirements, mainly concerning factory and standards, qualification of technical directors and batch-to-batch quality controls.
The Health Ministry's Circular was intended as an implementation of the European Directive on Food Supplements (2002/46/EC) that covers only vitamins and minerals, but gives EU member states the option of implementing national regulations for "nutrients other than vitamins and minerals, or other substances with a nutritional or physiological effect, used as ingredients in food supplements."
The circular is the result of coordinated lobbying by the herbal, supplements and food industry associations. Opposition came from some pharmacist associations and also, more unpredictably, from two herbalist associations, FEI and UNERBE, that submitted the rule to the judgment of the Regional Administration Court of Lazio. The Court's verdict, delivered in January, confirmed the proper application of the European Directive and maintained the new regulatory framework.
The Health Ministry declared, however, in response to herbalists' fears, that the law concerns only packed herbal food supplements, but that all extemporary bulk preparations made by the herbalists (customised herbal mixtures made in the shops, or even more complex formulations made by a few herbalists in an annexed laboratory) were not under threat.
Spotlight On The Market
Together with contrasts between different stakeholders, the Circular should expand a market that, after constant double-digit growth during the '90s, suffered a period of stagnation. No better than fifth in the European national ranking for the supplements area, according to Phytopharm Consulting (6.5 per cent share of global sales values), the Italian market possesses peculiarities that are of interest to foreign investors or manufacturers: the most relevant being strong botanical sales and a consumer preference for professional advice.
According to FederSalus, the National Federation of Health Product Manufacturers, the global value of supplements sales amounts to a1.2 billion, with 60 per cent of sales through pharmacies, 27 per cent through herbal stores, only 6.5 per cent through the mass market, and another 6.5 per cent shared by direct mail and Internet orders .
The primacy of pharmacies is due mainly to much stronger sales of VMS and sports supplements, two categories with low sales volumes in herbal stores.
Botanicals sales are shared equally between herbal stores and pharmacies, Italy being the leading European country for a number of non-pharmaceutical outlets of herbal remedies. According to figures by Annuario Italiano di Erboristeria (a reference guide for the Italian industry), there are 4,500 herbal stores, 70 per cent of them concentrated in northern Italy. Almost all of the 17,500 pharmacies have a shelf with natural remedies approximately 20 per cent of which are equipped with an herbal department often attended by a natural products expert. Pharmacies also have a monopoly on sales of homeopathic drugs.
The product mix in herbal stores includes a wide range of raw herbs (up to 400 in some shops), extracts, branded botanicals, food supplements and natural cosmetics. While organic foods reach consumers through other retailers (around 1,000 specialised groceries plus increased interest from the mass market), herbal stores are the kingdom of natural beauty, with consumer purchases rising more than 7 per cent per annum in recent years, a growth rate considerably higher than that of the global cosmetics market, according to Unipro, the beauty industries association.
Although the majority of herbal stores are small businesses, chains and franchise outlets now number nearly 500, a figure that is rising as shopping centre outlets and mega stores become more prevalent. One chain, Bottega Verde, a leading mail order brand of herbal cosmetics since the '80s, has opened 120 franchised shops in the last few years, with plans to open another 30 by the end of the year. The market has also been assisted by a three-year University Diploma created in 1996 that has spawned a new generation of trained herbalists.
On the manufacturing side, market share is fragmented, with no players in a clearly dominant position, with the exception of Indena, the Milan-based ingredients multinational.
If we look at brand products, none of the major Italian companies (Specchiasol, Aboca, and ESI in the health area; L'Erbolario leading the beauty brands) has more than 10 per cent of the national market. According to SISTE, an authoritative consulting herbal association, more than 1,200 companies manufacture or distribute botanicals and supplements in Italy, employing about 25,000 people.
Globalisation and concentration are beginning to affect Italy with multinationals opening branches or acquiring Italian companies. A pioneer in herbal extractions, Turin-based Ulrich (established in 1864) has been enveloped by the German MB group. Italian pharmaceutical companies have also shown interest in acquiring smaller herbal manufacturers, probably foreseeing future developments linked to the European Directive on Traditional Herbal Medicinal Products now under discussion in Brussels. But that is a matter for another, still unwritten, story.
Michele Bernelli is editorial director of Erboristeria Domani, Italy's leading trade magazine for the herbs and supplements industry, published by SoGeCos spa, Milano, Italy.
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