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Complex Approval Process Restrains Phytosterol as Functional Food Ingredient

London, UK - 1st April, 2004 --In 2003, the European phytosterol market experienced a healthy growth. Nearly 3,000 tonnes of plant sterols and plant stanols were used in food, pharmaceuticals, health supplements and cosmetics. Despite this robust performance, European legislation on novel foods has hovered as a significant threat to overall market development.

Complex EU regulations are hampering the growth of the emerging market for phytosterol as a functional food ingredient. Dr. Raju Adhikari, Research Analyst from Frost & Sullivan ( explains, "Any company wishing to market novel foods in the European Union must first undergo a lengthy and complex formal approval process, typically taking five to ten years. The costs involved are also considerable, ranging between USD 125,000 and USD 400,000."

Of the 46 applications made to the European Food Safety Agency (EFSA) between May 1997 and February 2004, less than 10 novel foods were granted marketing authorisation. The anticipated approval of several novel foods containing phytosterols by food regulatory agencies in 2004 is, however, expected to boost market expansion.

Applications seeking to include phytosterols in yoghurt-type products, milk-type drinks, sausages, cold cuts, bakery products, beverages and spicy sauces are pending approval. The incorporation of phytosterols in these new food categories is set to reinforce the existing success of phytosterol-fortified margarines and spreads in the United Kingdom and Scandinavia.

"If these newly approved food products were to follow the consumer market success of Unilever's Flora Pro-active and Raisio's Benecol, overall growth of the phytosterol market can be expected to be even higher than 30 per cent," says Dr. Adhikari.

At the same time, heightened consumer interest in the cholesterol-lowering properties of phytosterols is projected to boost uptake levels. European consumers are recognising the role phytosterols play in promoting well-being and are turning to them as a preventive measure against cholesterol.

Nevertheless, knowledge about the considerable health benefits of phytosterol-containing products still remains relatively low. Phytosterols play a role not only in preventing heart disease by lowering LDL cholesterol, but also have anti-inflammatory effects for patients with auto-immune disease, can be used to treat benign prostate hypertrophy, stimulate insulin production for diabetes management and provide skin benefits with anti-ageing effects.

"Not only phytosterol manufacturers, but also food processors, supermarkets and retailers need to work together at promoting customer awareness of the benefits of eating phytosterol-containing products. Further, engagement with government agencies and working with schools to educate youngsters is likely to be an effective way of raising awareness of the health benefits of phytosterols," advises Dr. Adhikari.

Currently, European phytosterol manufacturers are strongly positioned in the market and are generating profits. Competition amongst the phytosterol manufacturers is, however, intensifying. While Cognis still dominates, the additional capacity added by DRT is likely to position it as a direct challenger to market leader.

At the same time, smaller companies such as Vitae-Caps of Spain are expected to proliferate and are forecast to have high growth potential.

Title: Opportunities in the European Phytosterol Markets

Code: B287


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