Contentious Therapeutic Products Bill Threatens Livelihoods of Kiwi Importers

Therapeutic Products Bill – What can you do?
February 2, 2023
Radio Interview with NHA Chair Paddy Fahy
May 2, 2023
Therapeutic Products Bill – What can you do?
February 2, 2023
Radio Interview with NHA Chair Paddy Fahy
May 2, 2023

Contentious Therapeutic Products Bill Threatens Livelihoods of Kiwi Importers

Importers and suppliers of natural health products in New Zealand will be forced out of business if the Therapeutic Products Bill currently before Parliament is passed into law as it stands.

The proposed legislation will make it too expensive for importers of natural health products to comply with regulations, forcing them out of business and directing consumer spending away from local providers in favour of the large, overseas online sellers. 

The Natural Health Alliance chairman Paddy Fahy has been fielding comments from his membership (natural health products retailers, distributors and health practitioners) and who have voiced their concerns about the potential impact on their services if the proposed legislation is approved.

“The proposed legislation, if passed, will literally strangle the life out of importers and sellers of natural health products. The Alliance strongly opposes the bill in its current form. We recommend that natural health products are removed from bill and, if deemed necessary, separate regulations developed for this industry,” Mr. Fahy said.

The government and our health bureaucrats know that natural health products are typically inherently safe yet the current proposed legislation defaults to banning them for sale in New Zealand unless regulated through an unnecessary regime that is disproportionate to the industry. 

Mr. Fahy said there are numerous issues of concern within the proposed legislation, but the over-riding issue is that local importers and suppliers will most likely be driven out of business and consumers forced to buy from large, online overseas-based sellers, such a iHerb and Amazon. “These same Big Tech companies who made billions of dollars from increased business as a result of the Covid lockdowns now stand to benefit from this legislation while Kiwi businesses once again end up as a footnote in history,” he said. “Silicon Valley will make the margins and the business models of local New Zealand health product importers will be quickly strangled.”

Mr Fahy said the successive governments have made several attempts since the 1990s to develop and implement a regulatory framework for natural health products, but each time common sense has prevailed and the proposed legislation was pulled from the Parliamentary programme. 

“We are not averse to having a discussion around a regulatory regime that is outside the Food Act, but to lump natural health products with the medical industrial complex is unnecessary and a breach of good faith agreements between industry and government.”

The Therapeutic Products Bill proposes new charges of up to $1000 per product SKU imposed, meaning importers and suppliers collectively will face an increase of millions of dollars in government taxes just to stay in business. “It is estimated that compliance costs to industry will more than double. Industry currently pays up to around $10 million in fees to the Ministry, but the proposed law change will see another $10 million to $15 million from industry.”

The government accepts that natural health products are extremely safe, with minimal to zero risk of serious harm, injury or death, yet the current proposed legislation defaults to proactively banning the importation, distribution and retailing of these products unless they’re accompanied by a highly regulated regime as if they are inherently dangerous and a threat to the public good. 

“Evidence shows there is a miniscule to zero safety or quality problems with natural health products that need addressing or are not already addressed through existing consumer protection legislation and regulation.”

“New Zealand is not a leader in this area of integrative health, and so by default we look internationally to the leaders in manufacturing, mainly in the United States and the European Union, that abide by strict FDA and EU health regulations respectively. By that very process, importers are already supplying products that have been through a rigorous safety regime,” Mr. Fahy said.

“The main effect of this legislation will be to restrict the health care choices, personal preferences and cultural practices of those who want options other than a Western, drug-based medicalised allopathic model of health that is promoted by the medical industrial complex,” he said.

In conclusion:

  • The Bill proposes new and considerable additional taxes on the Natural Health Products industry;
  • The Bill gives the Government a “regulatory blank cheque” with the Ministry of Health asking industry to “trust us, but we don’t know full costs to industry yet”;
  • The inclusion of natural health products in the Bill is based on misinformation and fallacies;
  • The legislation will not enhance exports;
  • Natural health products are safe with zero to minimal concerns (so what is the Bill attempting to fix?).

The Natural Health Alliance represents over 30 separate importing or direct selling companies as well as professional natural health practitioners operating individually or as a business. Our members sell approximately 5,000 separate individual products on the New Zealand market. Probably three quarters of our members’ products are imported, from the US and EU but also other countries, with the remainder manufactured locally in New Zealand. 

Our members alone would have an annual market turnover of over $200 million, the entire natural products industry overall contributes over three quarters of a billion dollars to the New Zealand economy, which is what you would expect for a mature industry that’s been operating in New Zealand for well over 40 years.  Many of our smaller company members supply low volume products to assist customers in maintaining health and wellness. 

“Importantly, the work of the natural health products industry works on correcting nutritional imbalances, which if left untreated can lead to chronic and costly long-term health problems and an obligation on the public health system.”

Mr Fahy said there will be local and Australian-based manufacturers who are poised to benefit from the legislation through increased market share as local importers and suppliers drop away, but mostly it will be the big online overseas-owned retailers like iHerb and Amazon that will be laughing all the way to the bank as consumers are forced to buy direct from overseas instead of working through local suppliers, who also provide add-on services such nutritional advice.

The Natural Health Alliance will hold a public meeting on the Therapeutic Products Bill 

in Wellington 12 noon to 2pm on Tuesday 2 May, 2023, Public Trust Hall, 131-135 Lambton Quay, Wellington Central. Speakers:

  • Paddy Fahy, Natural Health Alliance;
  • Rt Hon Winston Peters, leader, NZ First;
  • Dr. Guy Hatchard, International Advocate for Natural Medicine;
  • Lisa Hansen, barrister, NZ Health Trust;
  • Dr. Bruce Dooley, GP and integrative therapy practitioner;
  • Gary Moller, World Champion Cyclist and Health Practitioner

Overview of the Natural Health Product Industry

The Natural Health Industry embraces dietary/food supplements, including herbal, vitamin and mineral combinations, traditional medicines such as Rongoa Rakau, Traditional Chinese Medicine (TCM), Ayurvedic, Naturopaths, Medical Herbal and many others. There is no known information on the number of Traditional Chinese Medicine (TCM) products, nor Indian Ayurveda; both would be substantial. Practitioners provide their clients with both commercially manufactured ‘practitioner’ products and products made for specific clients. 

Best estimates have consistently arrived at approximately 20,000 products. Alliance members alone market up to 5,000 individual products. (The Ministry of Health erroneously states that there are 10,000 but they provide no evidence to support that claim despite being given higher figures by industry over considerable years.) 

Over 50 percent of the population are regular users of dietary supplements and other Natural Health Products and services in New Zealand. In 2004, approximately 25 percent of all New Zealanders utilised the services of a natural healthcare practitioner. The industry has grown considerably over the past 20 years. 

Over 50 percent of clients stated their reason for using CAM practitioners was because the CAM practitioners “provide help with conditions that other health care providers are unable to treat.”

Some New Zealand companies often sell and market products that larger companies find uneconomic as small, practitioner based businesses tend to be more focused toward consumer needs than corporate bottom line.

Image by Bundo Kim on Unsplash

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