When regulation puts the brakes on innovation

Novel foods ​

Europe's novel foods regulation (EC No 258/97) was introduced in 1997 and requires any food not commonly consumed in the EU prior to May 1997 to undergo rigorous safety assessment before it can be brought to market. However the laborious and time consuming assessment process was heavily criticised for its effect on innovation.

In 2007 economist Graham Brookes found the rules favoured imitation over innovation, as once a product is approved it clears the way for competitors to launch imitation products very soon afterwards, without having had to stump up their own R&D investment.

Brookes also found the long lead times for approval in Europe to be problematic. If it has to wait 30 months or more for approval before it can even launch a product, its return on investment can be reduced by as much as 30 per cent.

The amended regulation looks set to ease the bottlenecks with a swifter system for assessing foods that already have a safe history of use outside the EU, as well as giving an exclusivity period for companies that invest in data, thus bringing an end to piggy-backing under substantial equivalence.

The indications are that the Commission has taken on board the concerns of curbed innovation. “The new rules would have a positive impact on innovation and on market access to new products,” ​said health and consumer protection commission John Dalli addressing a joint conference held by EFSA and DG Sanco in May.

Even once the amendment is adopted, however, there will still be a two-year transition period to the new system. A stickling point has been whether or not to include produce from cloned animals and their offspring under novel foods, with the Parliament and Council looking set to enter conciliation.

Health claims​

The new regulation on nutrition and health claims has also taken its toll in innovation. While the regulation was being drawn up companies channelled resources into studies to back up claims they were submitting, in many cases in preference to developing new ingredients with a healthy angle.

However implementation has not brought new confidence to ingredient companies and persuaded them to open up the innovation coffers, since EFSA has given positive opinions on relatively few claims to date.

Dalli, however, sought to join the dots between health claims and innovation. He said the regulation “will clear the fog by stripping away the misleading, spurious and false​

claims to leave only those claims which have been properly substantiated by​

science.”​

“This leaves the field much clearer for genuine innovators to thrive – and thus will​

provide a further incentive for food operators to compete on a true level paying field,​

whilst boosting the confidence of consumers safe in the knowledge that only​

verifiable claims can be made.”​

Flavours​

A third area in which regulation may impact innovation is in the flavour sector – its relatively high innovation spend notwithstanding. Since 1999 EFSA has been reviewing safety data on previously approved flavouring substances in the EU, but it requires more data to complete its opinions on some 400 substances by the new deadline of 2014.

The data required would come from 90 day studies and general toxicity tests which were not previously required. This means flavour companies must conduct the studies or risk well-established substances being removed from the market – and they may need to divert R&D budgets away from innovation and towards studies on well-established substances.