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Why did Numico sell?

The decision by Dutch food and nutrition group Royal Numico to sell its vitamin, minerals and supplements divisions in Europe and the US has come as no surprise to the managing director of its GNC UK retail chain, Margaret Peet.

She said the move reflects the difficulty large companies have in coming to terms with an often fickle and intricate market. "It often happens that large companies just can't handle a diverse, complex and extremely hands-on type of business," she said. "You've got to be wed to it. I believe they thought there were more synergies with their other businesses and found out the hard way that was not the case."

Numico became the United States' largest distributor and manufacturer of nutritional supplements when it bought GNC retail stores in 1999 and supplements maker Rexall-Sundown in 2000.

The uncertain regulatory climate in the Europe as well as a world-wide slowdown in supplement demand were major factors in Numico's decision, Peet said. She singled out the European Directive on Food Supplements as a major obstacle for many of the larger companies.

"The worrying thing is the scientific dossiers. None of these big companies can get the science together for the dossiers, which would lead you to believe that the science being asked for is completely inappropriate for the sector."

Numico's plan to divest in GNC and Rexall follows the sale of Roche's vitamins and minerals division to DSM last year.

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