Tangled Chinese regs cost US supplement firms $8 billion in lost exports, report says

China’s confusing thicket of regulations has some real costs for American dietary supplement companies. A report from an industry association has calculated the costs of those regulations in terms of lost business: $8.37 billion in lost potential exports and about 2,800 lost jobs. The report was conducted by the US-China Health Products Association in conjunction with the US Department of Commerce. The report looked at the convoluted path to market in China, which now has the largest consumer base in the world. Market potential Persistent quality problems afflict Chinese domestic health product manufacture. And reports of the widespread contamination of China’s agricultural lands as a result of its helter-skelter industrial without much in teh way of enviornmental controls lessens confidences in teh quality of domestically-sourced ingredients. All of this lessens consumer confidence in domestic products and raises the profile of foreign (and especially US-made) supplements. If only they could get to market. The report used data supplied by companies that participated in the report. The report compared the sales of those companies in other markets and used those figures as a baseline to calculate and average of sales per potenital consumer. Using a figure of 275 million for the number of potential dietary supplement consumers in China, the report ended up with the $8 billion of what could be expected in sales given a more open market with less confusing regulations. The report also used a baseline of $3 million in additional exports supporting one more job. As it stands, products and ingredients that seek entry to the market must go through registration process that cost $60,000 or more per SKU, said Jeff Crowther, head of USCHPA. But that’s an overly simplistic view of the process, as other reguations apply. One company’s experience “China is one of those places where if you ask ten different people what it takes to get a product registered there, you’ll get ten different responses and time frames,” Mike Bush, vice president of business development for Ganeden Biotech, told NutraIngredients-USA. Ganeden is the supplier of Ganeden BC30, a probiotic ingredient for functional foods. Ganeden is a member of USCHPA and participated in the report. “With an FDA GRAS submission or in dealing with EFSA, it might be a pain, but at least there is a path that everybody agrees upon. With China, there is no clear path to market. We are expanding aggressively internationally and China is part of the plan. We believe we have found a path of regulation for our particular strain but nothing is very clear,” he said. “We have engaged with three or four different experts or consultants and have gotten different opinions in all those cases. We think we have found the right partner, ” Bush said. “It looks like some of the safety work we have done may have to redone within China at a Chinese lab. It’s not a big deal, but there are opportunity costs to redo work we have already done. But we plan on being in China this year and we believe it will be a very nice market for us,” he said. See a link to the full report here .

Tangled Chinese regs cost US supplement firms $8 billion in lost exports, report says

China’s confusing thicket of regulations has some real costs for American dietary supplement companies. A report from an industry association has calculated the costs of those regulations in terms of lost business: $8.37 billion in lost potential exports and about 2,800 lost jobs.

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