Industry consultant Martin Last argues that US companies aren't doing enough to help the European market
Time is running out for companies that want to continue selling products in Europe that do not comply with the new EU Directive. Of most concern is the positive list of ingredients. Few companies, particularly from the US, have shown any inclination to ensure that ingredients currently missing from this list are added before the July 2005 deadline.
Some reports from the US have suggested that much effort is being made to move the position forward. The view from Europe, however, is very different and there is little confidence about the progress to date.
Some 300 safe and popular ingredients available across the EU will become illegal unless dossiers demonstrating their safety are submitted. But it appears that only 15 dossiers are being prepared for submission to the European authorities. Evaluation in the UK suggests that approximately 100 of these ingredients are desirable to retain a significant point of difference for the natural products industry. The 15 known dossiers represent a fraction of what is needed, but not one dossier has yet been formally submitted to the EU.
Why the lack of submissions? The slow progress could be due to the anticipated cost, but in many cases the cost of submission lies not in collating the data but generating the data in the first case. Clear guidelines have been published for dossier submissions. These guidelines have three sections: administrative, technical and biological/toxicological. The first two are relatively straightforward, but for many it is the third section that becomes problematical and potentially costly.
As a result, some manufacturers may seek to reformulate like ingredients already allowed rather than incur the costs associated with submission. However, many of the ingredients not on the list provide a significant point of difference between the specialist natural products sector and the mass market, and could provide important developments in future innovation.
Where The US Is Really Needed
UK and European manufacturers use ingredients that are often sourced from the US and they look to key US suppliers to help provide the data and support they require to help with submissions. Without US involvement, progress may not be possible.
The result will be market and consumer confusion. But it appears that suppliers around the globe are only gradually realising the significance to their business and are only now starting to consider possible submissions. But time is running out.
Many trade associations are trying to communicate the urgency of the situation. In the US, information is being circulated and coordinated by NNFA and CRN and in Europe by EHPM and the UK's HFMA. And yet, there appears to be a lack of interest or investment to ensure the future for our industry. HFMA has developed a Web site to help communicate the key issues (www.hfma.co.uk) and appointed a dedicated technical advisor to help coordinate dossier issues.
One possibility is to encourage joint submissions from companies with common interests. This could allow competing companies to find a way to jointly fund submissions for future benefit. To date, sharing science, particularly in the US, has represented a barrier for companies that believe they should reap all the rewards for any science they supply to support an ingredient. However, without the ingredient on the EU list, no company will benefit at all. Despite the source of the science, an ingredient will become a generic item on the final approved list. Therefore, it is necessary for companies to temporarily put aside their competitive issues to help keep products on the market.
Some might ask if matters. Couldn't those companies wanting to operate in Europe simply reformulate to comply? But then many valuable products would be lost and many companies may choose not to operate in Europe at all. The consumer may be the ultimate loser. And yet, once the EU Directive is in force, it is anticipated that as a harmonised market the value of the total European natural products market will be the equivalent size to that of the US market. There is an opportunity to share in that potential until the submission deadline in July 2005. Once this date has passed, the cost of entry into Europe will significantly increase. The cost of dossier submissions should be considered carefully as an investment in the future before it's too late.
Some may think that this is purely an EU issue, but developing markets may in the future adopt similar systems to the EU and positive lists may well become widespread.
Martin Last is vice-chairman of HFMA, based in the UK.