1. Contribution of the Food Supplement Sector to the EU Economy 26 November 2013 Alban Maggiar EHPM Chairman

2. EHPM Introduction European Federation of Associations of Health Product Manufacturers (EHPM) Representing national associations of food supplement manufacturers 1750 Enterprises 14 Member States 26 November 2013

3. EHPM Mission Following regulatory developments at EU level Advocacy to achieve a coherent regulatory structure for FS adapted to the day to day business reality faced by SMEs 26 November 2013

4. EHPM Structure Input into EU policy formulated through 4 working groups  Quality  Technical  Botanicals  Communications Chairman & Board Director General 26 November 2013

5. Food Supplements (FS) Products Vitamins Minerals Botanicals Combination Products Other substances Examples of botanicals used in FS: Artichoke, Gingko, Chamomile 26 November 2013

6. Food Supplement (FS) Market – Global Overview FS Market 2011 > €32 Billion FS Market 2015 > €40 Billion (+25%) Botanical FS Market 2011 > €16.5 Billion Botanical FS Market 2015 > € 20.5 Billion (+24.24%) 26 November 2013

7. EU Market - Overview All Food Supplements €9 Billion Botanical FS €2.1 Billion Botanical FS Breakdown Retail Stores € 1.6 Billion Direct Sales € 420 Million Internet Sales €125 Million 26 November 2013

8. Botanical FS Facts & Figures (1) Cultivation & Harvesting Over 100,000 hectares cultivated 21,000 Growers & Collectors Extract Manufacturers 100-150 companies Employment: 10,000 -15,000 people Final Product Manufacturers 1,000-1,500 mainly manufacturing botanical FS Of which 95% are SMEs Employment: 30,000 – 35,000 people Distributors 10,000 -15,000 Employment: 75,000-100,00 people 26 November 2013

9. Botanical FS Facts & Figures (2) Food & Health Shops/Herbalists Store Retailing: 50,000 Employment: 50,000-100,000 Grocery/Supermarket/Retail Store Retailing: 460,000 Employment: 5 Million Pharmacies Store Retailing: 120,000 Employment: 120,000-180,000 Direct Sales Distributors: 850,000-900,000 Employment: 3,500 26 November 2013

10. National Markets Member State FS Market (€) Direct & Indirect Employment Botanicals Market Share % Projected Annual Market Growth % Italy1.9 Billion100,00019.5%2.5% France1 Billion25,00050%1% Belgium301.4 Million30,00025%6% Spain600 Million15,00051%2.5% 26 November 2013

11. Keys to Innovation Combination products Observational studies SME friendly regulatory environment Incentive to innovate – total clarity needed on level of data required to secure approved health claims 26 November 2013

12. EU Regulatory Horizon Option 1 – would require investment in clinical trials never previously required for botanical FS Cost of clinical trials are prohibitively expensive for SMEs - €250K to €500K Botanical Food Supplements would be subjected to more stringent demands than herbal medicinal products Difficulty in how to conduct clinical trials as many companies have invested in trials and still had claims rejected despite positive results 26 November 2013

13. EU Regulatory Horizon Option 2 presents opportunity for continued market growth Harmonised EU quality and safety standards for botanical FS would create genuine internal market Harmonised EU system could also ease export difficulties currently faced by industry 26 November 2013

14. Conclusion EU Food Supplement industry driven by SMEs continues to grow even in economic crisis EU industry to be placed at competitive disadvantage if wrong regulatory choices are made Potential loss of freedom of choice for consumers & heritage of botanical knowledge/use in Europe Risks of driving consumers towards unregulated channels of retail (internet purchases from third countries) Result: Continued worldwide growth of food supplement market but stagnation or decline in EU Market The EU should look to existing national cooperation/regulation (e.g. BELFRIT) of botanicals when defining the way forward 26 November 2013