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Markets opening to new member states

Supplements companies in the European Union?s 10 new member states are beginning to see the benefits of their countries? newfound status — despite ambiguity that remains about the manner in which some legislation is being implemented.

Although the eight Eastern European nations as well as Cyprus and Malta have increased sales with their new EU counterparts before accession last May, harmonisation is amplifying pan-European trade and liberalising what have typically been restrictive domestic markets.

Analyst Euromonitor?s research into the Eastern European vitamins and minerals market reveals up to 10 per cent annual growth with higher income, greater product availability, and increased interest in health and wellness as the primary drivers.

In Hungary, a system that meant food supplements were often categorised as medicines and restricted at their point of sale has been superseded by the tenets of the Food Supplements Directive, adopted in the national legislature. A greater range of products at higher dosages available in a wider range of outlets is the result — in theory at least.

?Some imported products have appeared on the Hungarian market with high levels of active ingredients that were prohibited before May, so there has been some liberalisation,? said Dr Tamas Horanyi, vice president of the Hungarian Association of Dietary Supplement Manufacturers and Distributors. ?This is a challenge to local supplements manufacturers but is good for the consumer. However, there is still no clear distinction between food supplements and pharmaceuticals and this is somewhat confusing.?

Katarina Wagner, a central and Eastern European nutritional product regulations specialist at Brussels-based European Advisory Services, said that while all new member states have implemented the EU regulations into their legislatures, it would take time for these states to come to grips with the regulatory ramifications of EU membership.

?In the past there were cases where it was unclear whether a food agency or medicines agency should deal with certain products. That ambiguity is being resolved by the Food Supplements Directive coming into force,? she said.

Vaclav Bazata, president of the Czech Association of Special Foods, agreed that time was needed. ?We are still in the transition phase, and our government is wary of opening the market to new products,? he said. ?The best thing is that our future is more predictable.?

Wagner said supplements companies have little to fear because Eastern European manufacturing standards are very high, and harmonisation means these products should more readily be sold in Western markets.

According to Euromonitor, sales of food supplements grew by six per cent in the Czech Republic and were valued at $175 million in 2003. The Hungarian market grew 2.3 per cent ($51 million) while Poland grew nine per cent ($205 million) with new products such as probiotic supplements, royal jelly, co-Q10 and glucosamine growing at about 15 per cent.

Further east, Russian food supplements sales hit $366 million in 2003 — a 20 per cent gain on the previous year. For the first time, vitamins and minerals sales were outstripped by other supplements, which registered 26.6 per cent growth.

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