NPD 101: Permissions Pathways - Ingredients

When it's better to ask for permission rather than forgiveness.

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In the first instalment of our new "New Product Development 101" series, the UC F&B team tackles the why and where-to-from-here of ingredient formulation and the potential pathways to get your product to market. 

You’ve heard from us most recently with urgent alert on the changed status of Ashwagandha, determined in April 2023 by FSANZ as being a prohibited ‘novel food’. We’ve fast tracked this permissions pathways explainer because we never want any of our clients or fellow F&B community members to find themselves in the position of unknowingly having supplied a product containing unsafe or prohibited ingredients. This kind of mistake can have serious and far reaching consequences for your business and can generally be easily avoided by asking for help sooner rather than later.

If you’re keen to hear more on this topic, you’re welcome to join our Chief Counsel, Amelia Edwards, in a conversation about the food-medicine-cosmetics interface at the Naturally Good expo in Sydney on 6^th June (free to attend!) or reach out to set up time for a chat. 

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Why are we here?

UC F&B specialises in creative solutions and knowing how to navigate those tricky in-between regulatory spaces. We enjoy helping all of our clients get their products successfully to market but we especially love working with businesses that are getting creative and trying new things. We’re about helping businesses that do get things done.  

Now, to get you started (or help you find your way) in the NPD journey, we want to talk about framing your thinking on product formulation for foods and beverages. Businesses typically want to add ingredients to their products for a reason, usually either to have an effect on the food (ie. to perform a technological function) or to make the food more attractive to consumers (because the ingredient is perceived as premium, delicious, or nutritionally or therapeutically beneficial). 

One of those prevailingly popular boundary-pushing areas for food and beverage businesses is functional foods and (though you might not know it!) the food-medicine interface. Functional foods aren’t designed just to taste good and fill you up but to be ‘better for you’, whether that’s by adding extra ‘good stuff’ in or enhancing (and drawing the consumer’s attention) to what’s already in there. As we’ll cover in this intro discussion, when you want to talk not just about what’s in a food product but what it can do for the human body, then you need to be sure what side of the food-medicine interface you’re playing on to ensure that you’re playing safe for consumers and for your business.

Importantly, if you want to add ingredients to your food products so you can talk (or make claims) about those ingredients, you need to make sure you have permission not only to add that ingredient in the first place but ALSO to talk about what it’s doing there. Stay tuned for Part 2 of this intro discussion, Permissions Pathways - Claims, before you get too ahead of yourself. If you can’t talk about it the way that you want to, you probably don’t need to worry about putting it in there. Alternatively, you might need to consider the complementary medicines pathway to enable you to make a broader range of compliant claims. 

This process can feel pretty overwhelming. Download our Permissions Pathways flowchart from our Resources Page for an easy visual representation of the steps we guide clients through in working out what you can sell and what you can say, then read on for more information about key watch-outs and how Universal Counsel can support you along the way.

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A. THE FOOD-MEDICINE INTERFACE

What can be sold as or in food & beverages in Australia, and what you can or must say about food products, is regulated primarily by the Food Standards Australia New Zealand (FSANZ) Food Standards Code (FSC) (as given force by state-based law and enforced by state-based regulators). However, even if all your ingredients began their lives as plants (or even fruits, vegetables, or grains commonly consumed as food), products that are consumed orally may alternatively be regulated as medicines by the Therapeutic Goods Administration (TGA) if relevant factors indicate that a consumer will infer that the product is meant to be consumed for a therapeutic purpose. 

One of those key factors is what ingredients are in the product. Particularly, (a) whether they are ordinarily consumed as food, (b) whether they are generally considered safe, and (c) whether they are being added to food for the purpose of having a therapeutic effect.

We call this overlap space the ‘food-medicine interface’. FSANZ (+ food regulators) and the TGA operate independently of each other (though with growing collaborative efforts). The food-medicine interface in Australia, and your NPD path to market here, is therefore dichotomous - a product can be either food or medicine, but not both. So why does it matter? In a nutshell (or capsule, perhaps), therapeutic goods aka medicines are viewed as automatically posing a higher potential risk to consumer health and safety than foods; for that reason, medicines are required to be listed or registered on the Australian Register of Therapeutic Goods, every ingredient in a complementary medicine must be on the ‘permissible’ list, and other safety-based hurdle requirements apply. 

Any product that falls into the food-medicine ‘grey area’ will be presumed to be regulated as a food IF listed in a specific Standard in Chapter 2 of the FSC AND no an exception applies. 

If your product is deemed to be a medicine or to contain substances that are otherwise unsafe for human consumption, but you have been selling it as a food, then not only are you potentially liable for significant penalties (and damages if anyone is injured as a result of consuming your product) but, practically, you are likely to need to engage in a trade withdrawal, if not a consumer-level recall, which means collection/destruction costs, loss of opportunity, and damage to your brand and consumer/customer relationships.   

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B. PERMISSION TO ADD

Specific permission under the FSC is required to add to a product sold as a food or beverage any substance that is not of itself consumed as ‘food’. Permission to add depends on whether the substance is categorised as a ‘food’, a nutritive substance, or an additive.

1. Prohibited substances

If you want to add a substance to a product and that substance is considered unsafe for oral consumption either as a food or as a medicine, then the product is prohibited from sale in Australia. A number of substances that carry a risk to human health and safety are permitted for use in medicines, subject to tighter regulation, though they are prohibited from use in food on that basis (or only permitted in very narrow circumstances). Adding such a substance to food will render the product unlawful and unfit for sale even if it would have been lawful if compliantly sold as a therapeutic good.

So, you can see why it pays to find out what pathways are available to you before you head off down the production road. 

We don’t expect food businesses to be able to keep up to date on what’s permitted and what’s prohibited on a rolling basis - that’s our job as your advisors, and aggregating that information and practical expertise is how we deliver on UC F&B’s promise to make your life easier. That being said, at a high level, here are some of those ‘beware, do not pass’ exceptions you should be aware of:

• Novel Foods: these are substances that are not ‘traditional foods’ AND are determined by FSANZ to pose a safety risk to consumers. Novel foods cannot be sold as food or used as ingredients unless and until approved for use by FSANZ (following the supply of sufficient safety data). Foods that are deemed ‘non-traditional foods’ because they do not have a history of consumption in Australia, but are determined not to pose a safety risk (i.e. due to a history of consumption in other countries) may be treated as food ingredients – safe use conditions as to volume or species/origin may apply. FSANZ updates its novel food determinations regularly.
  
  
• Prohibited & Restricted Plants & Fungi: These are specifically listed in the FSC and either cannot be sold as/in food or can be sold only subject to limitations.
  
  
• Poisons: Separate to both the FSC and TGA/regulations, substances that pose a risk to human health and safety may be listed in the Poisons Standard as prohibited from sale or permitted only in certain forms, or certain products (like medicines), or at certain levels. These substances, which include parts of plants and compounds that may actually be naturally occurring in some foods, cannot be added to food in the absence of specific permission (unlikely to be granted) because they are not generally safe for consumption.
  
  
• Substances subject to a TGA Determination: This means the substance has been determined by the TGA, under its broad regulatory authority, to be a therapeutic good or substance only permitted for use in therapeutic goods. Use of one of these substances may automatically render your product a non-compliant therapeutic good if you attempt to sell it as food.
  
  
• Food produced using GM technology:  This is a complicated one, but the general rule is that food constituting or containing food produced using genetic modification technology cannot be sold in Australia without specific permission from FSANZ. Stay tuned for our upcoming blog on alt & cultured proteins and precision fermentation for more in-depth discussion.

Food for thought: Ashwagandha, for example, remains a permitted ingredient for complementary medicines (subject to conditions set out in the Permissible Ingredients Determination), despite the fact that food products containing the root are now prohibited from sale as it has been listed as a ‘novel food’. Though Ashwagandha was not previously listed as a prohibited novel food, or a prohibited or restricted plan, or a scheduled poison, it has for some time been listed as a permissible ingredient for complementary medicines with conditions that indicate that health risks exist. On that basis, and in consultation with toxicology and technical experts, Universal Counsel had advised clients in recent years against using Ashwagandha in products sold as food due to both the liability risk should injury occur, the food non-compliance risk, and the potential TGA non-compliance risk (unless the complementary medicines pathway was correctly followed). 

2. No permission required for ‘food’

If the relevant ingredient can be characterised as a ‘natural’ substance (not synthesised, and not substantially refined to achieve a specific function) with a history of safe consumption in Australia, then it may be argued that the ingredient is simply ‘food’, for which no specific permission is required if adding to a product sold as food. An example of this is fruit juice concentrates, which may provide increased vitamin content at lower volumes but will not automatically be viewed in themselves as nutritive substances or additives.

3. Nutritive substances

Nutritive substances are substances (including those derived from ‘natural’ sources) that are refined and added to food for a nutritive purpose, i.e. to provide increased nutritional value as compared to ordinary levels found in traditional foods. Nutritive substances are essentially added to the food to have an effect on the body and can be contrasted against additives, which are added to have effect on the food itself, though these purposes are not mutually exclusive. 

Substance-specific permission is required to add nutritive substances to food and can be found in the provisions of the FSC, particularly Schedule 17 (Vitamins and Minerals). If a substance is not listed as a permitted nutritive substance, compliant use of these substances requires to apply for a specific permission via an amendment to the FSC.

To loop back to our discussion, above, on the food-medicine interface - a ‘nutritive purpose’ may be viewed as existing on the same spectrum as a ‘therapeutic purpose’ because the treatment of a vitamin/mineral deficiency, for people who cannot obtain the sufficient balance ‘naturally’ from food, falls within the definition of therapeutic. This is why the TGA requires that a supplemented or fortified product be specifically regulated under the Chapter 2 Standards of the FSC and contain only safe ingredients in order to be regulated as a food.

Adding a nutritive substance to food where no suitable permission exists may not in itself render the food a medicine but it does render it unfit for sale. Penalties/Consequences will depend on the nature of the substance and the risk to consumers but are highly likely to occur given nutritive substances are generally declared on label or in collateral because businesses want to highlight the perceived benefits to consumers. 

4. Additives

Basic definition: Synthesised or refined substances added to food for the purpose of performing a ‘technological function’ either during the manufacturing process (processing aids) or in the food for sale (additives). A technological function is an effect on the food, not the human body, and is part of making the food fit for sale; types of technological function include emulsification, preservation, antioxidation, colouring, and flavouring, amongst others.

If you add to a food a substance that is traditionally consumed as food in that form, you do not need permission to use it as an additive, even if it also serves an inicental technological function. An example is orange juice added to a beverage - this is a food ingredient, even if the vitamin c naturally occuring in the juice serves an antioxidant technological function or a flavouring technological function.  However, if the substances are not traditionally consumed in the form in which they are added and have been refined - that means processed beyond traditional/physical methods - to achieve the desired technological purpose, then they will be considered additives.

Similar to the rationale regarding the regulation of nutritive substances, suppliers are required to have permission to add ‘additive’ substances to their specific kind of food. Additives may be permitted at ‘good manufacturing practice’ levels for your food category, or they may not; category-specific permissions and restrictions will prevail over the general GMP permissions. 

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C. PERMISSION DENIED?

If the required permission to add/use an additive or a nutritive substance in food does not exist, a food business has three main options:

1. Reformulate

2. Pivot to the complementary medicine pathway (more on this in later instalments!)

3. Apply to FSANZ for permission 

Food businesses relying on the TTMRA or other limited special permissions pathways should be cautious; TGA regulation and safety concerns often disqualify you from those means of protection.  

Asking for permission

Depending on the nature of the substance and purpose for which it is being added, permission must usually be obtained by applying for an amendment to the corresponding Schedule (and/or Standard) of the FSC. A novel food determination may otherwise be relevant. This can be a highly technical process and you need to budget both for cost and for time. Talk to our experts at UC F&B today for an analysis of your options and chances of success, but note the following key parameters first:

1. Permission to use a substance as a nutritive substance will only generally be granted where:

(i)     the substance is proven safe for human consumption, or safe and effective at the level at which it is proposed to be added (the applicant bears the burden of providing evidence of safety);

AND

(ii)     there is a public health benefit to the use of the substance in food (as opposed to medicines) -this will generally not be made out if the substance is not necessary to normal human bodily function or to the specific needs of the ‘special purpose’ market (e.g. ‘sports persons’ for FSSFs).

2. Permission to add an additive will only generally be granted where:

(i)     the substance is safe for human consumption;

AND

(ii)     the substance is effective in performing the technological function.

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WHERE TO FROM HERE? WE’RE HERE TO HELP.

Contact our UC F&B team at food@universalcounsel.com.au to discuss your product formulation, permissions, and paths to market.

See our UC F&B unit page for more information on the F&B industry-specialised services we provide under this banner, including labelling and collateral review, non-compliance risk management, and end-to-end strategic NPD support.

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