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Entry to Latin America complicated by patchwork regulatory quilt

By Hank Schultz

05-Jun-2014
Last updated on 05-Jun-2014 at 17:43 GMT2014-06-05T17:43:55Z

“Brazil is the biggest market in theory but it has also been one of the most difficult regulatory structures,” says David Pineda.
“Brazil is the biggest market in theory but it has also been one of the most difficult regulatory structures,” says David Pineda.

The regulatory picture for dietary supplements in Latin America is still very much a patchwork quilt, according to an expert who has studied the markets.  But harmonization is on the horizon, and companies that are up to speed stand to reap the benefits.

“In Latin America, you have 30 plus countries if you include the Caribbean,” David Pineda told NutraIngredients-USA. “You see a lot of diversity in terms of regulatory frameworks.”

 Pineda is the director of EAS Latin America, a division of the Brussels-based food and supplement regulatory consultancy.  Pineda will lead a session on Latin American regulations an the upcoming seminar on global regulations  sponsored by the United Natural Products Alliance and scheduled for June 18 and 19 in Salt Lake City, Utah.

As matters stand, negotiating the Latin American markets is proposition ripe with opportunity but fraught with pitfalls, too, Pineda said.  Companies need to take a carefully reasoned view of what is to be gained in various markets versus the costs of entry.  Having an overall picture in mind can lessen those costs, he said.

“You really need to understand the local regulations,” Pineda said.  An ingredient that might fly in one market might be prohibited in another.  Or the concentrations might differ; some markets might place a product in a different category based on the amount of active ingredients it contains.

“You need to develop a strategy to launch a supplement so that it is in compliance in as many markets as possible. You need to know the concentration levels. Depending on your ingredient, the level or its concentration, you could be a supplement in one market and a medicine or an OTC product in another. And you need to know what you can include on your labels and what is obligatory to have on the labels in each market,” he said.

Harmonization on horizon

David Pineda Ereno, Regional Director for Latin America at EAS

The development of regional trading blocks are a big development in the overall market, Pineda said.  These blocks are Mercosur (Argentina, Brazil, Paraguay, Uruguay and Bolivia), the Central American Economic Integration System (Guatemala, El Salvador, Costa Rica, Nicaragua, Panama and Belize, with Mexico as an ‘observer’) and the Pacific Alliance (Chile, Colombia, Mexico and Peru). The talks among these partners toward lowered import barriers is having a ripple effect in dietary supplement regulation, Pineda said. In addition to talks surrounding economic policy and tariff issues, officials are also looking at ways to prune back the conflicting thicket of regulations that complicates the movement of ingredients and finsihed dietary supplements with the blocks. 

Regulators in countries with less history and with fewer resources look to other examples of how to build out a structure and to harmonize rules across categories and, potentially, with other countries. As a base reference, officials look to the Codex Alimnetarus for guidance, Pineda said. Countries in Latin America also look north to FDA for examples, and the course of regulation in the ASEAN nations is also a point of reference. But particularly influential is the European Food Safety Authority (EFSA), he said. This is a body that has not only worked to harmonize regulations across member countires but has also been tasked with taking a scientific approach to evaluating health claims.

“It is definitely a model that is looked at by countries all over the world. Every regulator in the world will be looking at what has been the experience in the EU, and everybody has been following the opinions of EFSA,” Pineda said.

“EFSA has a very high level of academics and experts, and not all countries have the resources to have a scientific body at that level. All regulators are looking to put decisions on policiy and regulations on a scientific basis. That doesn’t mean that the opinions of EFSA will determine the decisions in these other countries, but regulators there do find them very useful,” he said.

Market considerations

Among markets of particular interest in Latin America, Pineda put Mexico at the top of the list.

“Mexico is of great interest because it is a large and dynamic market.  Colombia is also a market of interest, and believe it or not, Venezuela has also been growing for supplements in the past three years, despite the other things that are going on there. Argentina continues to be a very interesting market, and Peru could be, too, but there is very little clarity on regulations there right now,” he said.

Brazil presents an especially interesting case, Pineda said.  It is an example (China is perhaps another) of how market growth in a potentially huge market, especially for imports, has been restrained by a murky regulatory picture.  There seems to be little in the way of unifying philosophy for the regulatory scheme there, with some ingredients categorized one way, while others fall under a different set of rules.

“Brazil is the biggest market in theory but it has also been one of the most difficult regulatory structures,” Pineda said.

In any case, Pineda said it is a moment in which industry can step forward to have an influence on how the new regulations take shape in Latin America.  

“It is now a very ‘hot’ moment.  Industry can support regulators by supplying information,” he said.

To register for the UNPA’s Global Regulatory Update: How to Approve, Sell and Market Dietary Supplements in Latin America, the CIS region and Europe event go to the organization’s events page .

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