By Len Monheit
We’ve all heard talk about the impact of globalization. From being able to strategically source from far off regions, to enabling a freer flow of goods for duty and excise purposes, globalization has, like many other terms, become a catch-all phrase used to describe a series of cause and effect issues resulting in, depending on whom you ask, profit, lower raw material costs, cheaper labor, unemployment, more paperwork, less paperwork, lower overhead, fewer suppliers, poorer quality, and whatever other effect or influencer one cares to name.
Obviously, the cost / benefit analysis depends on where you sit. If you’re part of the labor pool offered at a lower rate elsewhere, you’re potentially in trouble. If you’re the one buying the labor or raw materials at reduced rate (all other things being equal), you stand to benefit. If you’re the one charged with completing the paperwork, the jury’s probably out.
Many of the same things hold true for harmonization (regional or global), which is typically driven to achieve either trade or policing benefits (safety and security issues). And depending on your position within the environment being harmonized, and the purposes behind the harmonization, you can be a net winner, or a net loser. (Sometimes you can be both).
Let’s take a quick look at some of the current realities in any business environment.
- Some companies are quite secure nationally, have no wish for international expansion, and what’s more, resent international incursion into domestic markets
- Some (perhaps even those above) are interested in extending their supply chain internationally for sourcing and buying practices
- Many companies are seeking (must seek) international markets in order to grow and meet owner and shareholder expectations
- International interests seek to prevent market penetration by companies from North America
- Some of these international interests (may even be the same as those above) are seeking North American penetration
- Many organizations around the world hunger for an internationally open marketplace with few ‘borders’ and restrictions
- Notionally, seeks to preserve health and safety of population by ensuring where possible, that international regulations are similar in principle, if not in detail, to domestic regulations.
- Seeks to secure a favorable trade environment for domestic companies
- Seeks to ensure competitive advantage for domestic companies operating in the domestic marketplace
- Frequently responds to the effects of regional harmonization elsewhere to ensure effective trading block and strategic trading issues can be managed.
Now let’s take a look at the current global reality:
- Harmonization across numerous categories creating huge trading block, and for non-EU countries, a potential barrier to entry in both food and food supplement areas.
- Accelerated harmonization plan among many categories including health products for the ten countries in the bloc.
- Planned development of harmonized supplement regulations
South and Central America
- Call for some harmonization
- Many countries currently developing regulations for the first time and seeking regional consistency as well as international trade advantage
Into this picture, let’s drop the Canadian and US natural health products, dietary supplement and functional food and beverage business areas:
- Many would have Canada and the US operate as in a vacuum, defying the current business reality.
- Others would have each country enthusiastically export its entire model, despite the fact that each model is unique and representative of only a fraction of the world’s business population.
- Others would examine best practice, principles, intents and try to determine what aspects are exportable, what practices restrict trade and what compromise safety.
While we might have difficulty accepting the parameters under which safety and benefit are determined, the third point above suggests a balanced and measured approach.
Were we to accept all the points noted above, it would presumably be reasonable to establish common practices around the world as they relate to dietary food supplements, natural health products, functional foods and beverages. Furthermore, it would be reasonable to outline the common issues and challenges facing regulatory authorities which would then lead to a list which includes: GMPs and manufacturing controls, health claims (and substantiation) and advertising, allowed or not permitted ingredients or ingredient combinations, and product testing.
In today’s global environment, when a country considers changing or developing regulations, this is exactly the approach they take and we’d be foolish as an industry to not realize this.
- Are there US and Canadian companies seeking to develop or expand business internationally?
- Are domestic agencies interested in preserving international markets for domestic companies?
- Are there new challenges arising in which materials are sourced where quality is a concern or issue?
So is it therefore any wonder that this type of discussion is occurring simultaneously around the world?
It doesn’t necessarily presuppose conspiracy to acknowledge these efforts. One would assume that regulators and legislators, not unlike business, recognize the value of solid international relationships and intelligence.