Regulatory Frameworks for Functional Food and Supplements

Functional foods and supplements (nutraceuticals, natural health products) have emerged as a new category of products offering potential health benefits to consumers. Regulatory environments have evolved to govern the types of health claims that can be made for these products. Regulation needs to balance the imperative of protecting consumers from false and misleading health claims while encouraging research and development into products offering socially beneficial health outcomes. The paper explores the sources of market, and “non‐market,” (regulatory) failure related to the consumption and production of healthier foods. The Canadian approach to regulating health claims is compared to regulatory frameworks in the United States, the European Union, Japan, Australia, and New Zealand. The fairly strict Canadian regulatory system, together with the relatively small size of the domestic market, may limit investment in this sector.