At China’s annual Lianghui (Two Sessions), Feihe Dairy’s Chairman Leng Youbin suggested adding a third category of functional foods to the regulatory system. Currently, China classifies supplementary foods into two categories: ‘Special medical foods’ and ‘health foods’. Leng feels that the current categorisation has shortcomings that could be addressed with the introduction of the functional foods label.
Problems with the current food regulatory system
‘Special medical foods’ are processed and formulated to meet specific nutritional needs for those with dietary restrictions due to diseases and health conditions. Foods in this category generally do not taste good and are not easily available.
‘Health foods’ refers to consumables that have specific health claims. These are supplements that are available in formats such as capsules, tablets, and powders, which contain nutritional benefits such as vitamins and minerals.
“Manufacturers of these two types of foods are faced with problems such as costly production and long registration periods associated with regulatory compliance. Furthermore, they are expensive and thus do not effectively meet consumers' needs for nutritious foods that are affordable and easy to obtain,” said Leng.
Jeff Crowther, executive director of Health Products Association of China, similarly highlighted the restrictive and intricate nature of China’s regulatory system, and the financial hurdles are considerable. Approval for a dietary supplement or a health food product can take anywhere from 6 months to five years, with costs exceeding $150,000 USD.
To address these issues, Leng proposed a third category of ‘functional label foods’, which he feels will also be beneficial in the current context of an ageing population and fast paced lifestyles that have made health problems increasingly prominent.
Drawing inspiration from the Chinese concept that food and medicine come from the same source, the original form and flavour of functional label foods will be retained, which will make healthy foods taste more appealing.
Leng also quoted Japan’s introduction of the ‘Functional Food Labeling System’ in 2015, which he deems a successful example for China to emulate. He envisions that functional foods will be conveniently available via all retail channels, which will lead to better nutritional support for daily life.
In Japan, this category of foods does not require government approval, but manufacturers are required to declare information such as health claims and risks. Leng observed that this has led to increased innovation and revitalised the food industry in Japan.
Will this encourage innovation for the benefit of consumers?
Doris Huang, food regulatory consultant at Chemical Inspection and Regulation Service (CIRS) China, applauds this move. If less regulatory compliance is required to make health claims on pack, it can save companies a lot of time and money. This will encourage flexibility and creativity in developing new products.
However, she cautioned that this is a double-edged sword for consumers.
“Consumers could have more options. And since food companies would have saved on regulatory compliance costs, the price point for such products would be lower. But consumers would need to be more careful since it’ll be easier for companies to make health claims that would not be as strictly scrutinised by the authorities.”
But Jane Li, principal consultant at Li, Page & Co, feels that there are no benefits for consumers.
“Brands will monetise this opportunity by increasing prices without any innovation or new product development. One of the weaknesses of Chinese companies is the absence of innovation. This is not due to the lack of ability, rather, it’s a mindset. If this were to be adopted by the government, brands will only see it as a new way to market products that already exist.”
Leng acknowledges the need for functionally labelled foods to be effectively supervised to ensure adherence to national standards, but this might not be easy to implement. However, he is optimistic about the wider implications of having a functional foods category.
“The introduction of ‘functional label foods’ can drive the cultivation of food and medicinal ingredients, which could revitalise rural areas. This could also increase exports of such produce, which aligns with China’s Belt and Road initiative,” said Leng.
How will this benefit food manufacturers and facilitate industry growth?
David Ettinger, a partner in Keller and Heckman’s Shanghai office, anticipates that the introduction of functional label foods may initially only benefit certain categories, such as manufacturers of products that are traditionally considered both food and drug in China.
“China has already established a catalogue of substances traditionally considered as both food and Chinese medicine, which may serve as a foundation for potential inclusion of functional ingredients in foods. It is possible that the door for functional label foods may not be wide open in the beginning for all food and food ingredient manufacturers. Instead, China may start with foods containing ingredients with established functional properties that have already undergone government review and approval. The authorities could ensure a measured introduction of functional label foods into the market, minimising potential risks,” said Ettinger, who provides regulatory council for global brands.
Will there really be a third category of functional label foods?
Ettinger observed that the government could be considering such a move. In a draft version of GB 7718 General Rules for the Labeling of Pre-Packaged Foods, China introduced the concept of “claims concerning the health effects of food ingredients”, indicating the possibility of manufacturers making health claims based on the functional attributes of food ingredients. This could take a long time with multiple processes such as proposal review, consideration of industry and public feedback, and subsequent revisions and finalisation. It is therefore advisable for food enterprises to closely monitor the situation and actively engage with regulatory authorities to provide input.
Huang also feels that there is still a long way to go.
“Currently, only 24 health claims are allowed by Chinese authorities. For additional health claims, companies are required to do many tests for approval. If a third category were to be introduced, clear definitions and directions will be needed. It might be difficult for different parties – including authorities, the food industry, and consumers – to reach an agreement.”
Furthermore, the recent Kobayashi red yeast rice scandal in Japan is likely to have an impact on this issue. When asked about this, Li and Ettinger feel that this could be an obstacle.
“While Japan’s existing framework, particularly the Foods with Function Claims (FCC) category, may serve as a reference for China, the authorities will likely be more cautious about loosening up their regulations. The China Consumer Association had promptly alerted Chinese consumers to the potential dangers posed by the Kobayashi red yeast rice products, which signals that this could affect rule-making discussions on related topics in the future,” said Ettinger.
How will this impact the stakeholders involved?
Expanding opportunities for healthier food choices through the creation of a new category may seem beneficial. However, the suggestion to integrate it within the current framework raises concerns for Crowther, who sees China's regulations for health food products as burdensome for the industry and perplexing for consumers. Introducing another regulatory category will not only strain regulators and manufacturers but also exacerbate consumer confusion.
“Further complicating an already intricate system is not the solution. This issue involves three primary stakeholders. Firstly, there are the companies producing these products, striving to meet consumer demands while navigating regulatory complexities without impeding market access. Secondly, there are the consumers who expect safe, effective products, access to educational information, and protection from misleading advertising. Lastly, the government that is tasked with crafting regulations ensuring product safety, efficacy, truthful marketing, and providing clear market pathways for manufacturers and marketers of health food products.
“Simplifying and streamlining regulations would alleviate burdens for all parties involved. For instance, the United States boasts a successful regulatory system for dietary supplements, encompassing various ingredients and product forms, all manufactured under FDA cGMP standards. This system employs a ‘structure-function’ regulatory framework, categorising products based on their functions and their effects. This approach facilitates consumer understanding and informed decision-making. The structure-function regulatory model strikes a balance between safety, industry access, and consumer education. Consolidating industry regulations, rather than expanding them, would greatly benefit China's health food product industry and consumers alike,” said Crowther.
