Those of you in the dietary supplement industry who have attempted to do business in China know it is not an easy affair. In fact, I would compare the experience to attending a Formula 1 race, but when you get there it turns out to be a demolition derby.
The reason I use the above analogy is because many foreign companies that come to the China market expect to find a set of rules and regulations they can follow and industry people who can answer their questions definitively. However, the reality is some follow the rules, some don’t and others seem to make up their own. If you ask 10 people to answer a regulatory question, you’ll get 20 different answers. The industry is a real mess and is in need of reform.
Currently, there are two ways to enter the market with dietary supplements. First is as food and the second is as “health food” after gaining a registration from China’s Food and Drug Administration (CFDA). Many foreign companies like to enter as “food” because it is faster and less expensive and is not supervised by CFDA. It is supervised by the Administration of Quality Supervision Inspection and Quarantine (AQSIQ). However, there are many restrictions that come along with this entering as a food, which I won’t go into here. Those that choose the CFDA registration route will be set back about $50,000 in registration fees and invest approximately two to three years to complete the process. That is per product (SKU).
The U.S.-China Health Products Association has been working together with the U.S. Department of Commerce to encourage CFDA to work towards a more transparent structure that is based on notification similar to that of the United States’ Dietary Supplement Health and Education Act (DSHEA 1994).
However, CFDA has made it clear in recently published draft documents that it is planning on steering the industry toward a more restrictive environment by putting an end to importing dietary supplements as food. This will cause many multinationals to pull out of the market bringing a halt to millions in foreign imports.
We as an industry need to pull together to encourage CFDA to put in place a system that benefits consumers, industry and government in that order. If CFDA goes down the current path, the only entities that will profit will be a hand full of domestic companies and a few select few foreign companies that actually have CFDA registrations and of course the black market. Illegal importers will be quick to fill the void left behind by the exiting foreign companies.
For more details on CFDA’s plans for the dietary supplement industry in 2014, please visit the association’s website: uschinahpa.org/wp-content/uploads/2012/01/2013-09-30-Draft-Regulation.pdf