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Economy

Relaxed labeling rules could expand market -- and consumer risks

TOKYO -- A food-labeling category introduced in April could give Japan's health-food market a boost, but critics warn that it poses potential risks to consumers.

     The move is a key component of Prime Minister Shinzo Abe's growth strategy, and is aimed at accelerating sales of "functional foods" and creating new business opportunities for farmers.

Kirin will launch a green tea product touting health claims under the new food labeling system.

     The new labeling category, "food with function claims," is essentially a watered-down version of the "food for specified health uses" label, or so-called "tokuho" food items. The new labeling requirements are much less rigorous than those for the tokuho label. That means smaller product-development costs and times.

     Developing a tokuho product typically takes several years and hundreds of millions of yen. For a food product to qualify for a tokuho label, its effects and safety have to be tested and ascertained by experts. Clinical trials are also required.

     Qualifying for the new category only requires preparing scientific papers that show the product's functional effects and establishing a quality control system. The lower regulatory bar makes it easier for small and midsize companies to make health claims about their products.

     The new label is not just for processed foods. It can also be attached to fresh vegetables, fruit and seafood.

     The change "is a measure to soften the impact on farmers of the envisioned Trans-Pacific Partnership trade-liberalization pact," said a member of the government's council on regulatory reform.

Leaving the government out    

Unlike with tokuho certification, no government approval is required for the new labels. While the tokuho label states that the product has been approved by the Consumer Affairs Agency, the new label says the product's function claims have not been individually reviewed by the agency.

     Businesses are showing strong interest in the new system. In March, more than 1,000 people attended a meeting held by the agency to explain it. The agency has received more than 150 notifications about function claims.

     Ryuichi Morishita, a professor at Osaka University, has been championing the new system as a member of the government's regulatory reform council.

     "This is not about easing the regulations for tokuho products but about creating new regulations for health food," Morishita said.

     Japan's health-food market has been criticized as being poorly regulated, filled with a mishmash of products that make both reliable and dubious health and nutrition claims. Morishita argues that the new labeling system, which still requires food companies to report data on ingredients and quality to the agency, will help weed out poor-quality products over time.

     Abe has also been keen to promote the idea because of his own experience with health food. After health problems contributed to his resignation as prime minister in 2007 after just one year in office, Abe began incorporating into his diet sprouted barley, which had been approved as a health food by the former health ministry.

    "I found it to be effective for improving my health," Abe once told Morishita in a radio program. "I should have been aware [of this product] much earlier." 

Consumers at risk?

Critics, however, say the new system raises safety concerns. They cite the fact that function claims can be made at each company's discretion and are checked only after the product has been released.

     Among the eight products that were registered as "food with function claims" by mid-April are some that contain ingredients whose safety was not confirmed in the screening for the tokuho labeling. Nevertheless, they were able to hit the market.

     The Japan Housewives' Association, a consumer protection group, says the new arrangement forces consumers to accept all risks involved based on their own judgment.

     While there may be more risks for consumers, there will also almost certainly be more money for companies selling health food and supplements. Japanese market research company Intage group reckons the new system will help sales of such products double from the current 1.5 trillion yen ($12 billion) a year over the next couple of years.

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