The legal journey of food supplements: From product development to marketing and market surveillance

This article will be continued in a second part, where we will discuss the marketing aspects and related contractual issues in connection with food supplements as well as legal specifics and risks of M&A in the food supplement industry.

 

Introduction

Collagen for smoother skin, zinc for a stronger immune system and magnesium for relaxed muscles – the food supplement market continues to grow rapidly, driven by consumer interest in health, wellness and preventive nutrition. With the trend of pursuing an easy-to-achieve healthy lifestyle and the ageing population, the entire industry in Germany is expected to see a 15% increase in sales by 2028.

This development is increasingly fuelled by innovative online marketing strategies, including influencer marketing, which plays a pivotal role in shaping consumer demand and building trust in products. Direct-to-consumer (D2C) brands are reshaping the market by bypassing traditional retail and selling directly through their own digital channels – often supported by unique branding, targeted performance marketing and agile product strategies.

Driven by these dynamics, the sector has also seen increased M&A activity in recent years – both from strategic investors looking to expand their portfolio and from financial sponsors betting on high-growth food supplement and D2C brands with scalable marketing and product concepts.

But launching a food supplement involves more than just formulation and branding – it also means navigating a complex and often fragmented legal landscape. Every phase, from initial product development and ingredient selection to labelling, advertising and post-market surveillance, is governed by a web of national and EU regulations designed to protect consumers and ensure product safety. On top of this, there’s distributing and marketing for food supplements, which often require complex contracts. For investors and buyers, this legal complexity translates into specific challenges in M&A transactions – ranging from verifying product compliance and assessing advertising risks to analyzing supply chain and licensing structures. Legal due diligence in this sector has to go beyond corporate and financials and take a close look at regulatory, IP and marketing aspects.

This article provides a comprehensive overview of the legal requirements that food supplements must fulfil at each stage of the product lifecycle. We’ll focus on the regulations pertaining to “simple” dietary supplements, providing individual or multiple nutrients, such as (multi-)vitamins, minerals and amino acids. More “complex” dietary supplements, such as mass gainers, energy gels, pre-workout blends, containing additional substances like fat, lactose, glucose or fructose are not covered in this article. We’ll explore the key legal issues to help businesses achieve compliance in this dynamic and highly regulated sector. The article also highlights what buyers and investors should watch out for in transactions involving food supplement companies.

 

Classifying dietary supplements

Before a food supplement can see the light of day and be launched on the market, it must be clear which regulatory requirements it is subject to. As food supplements are often said to have health-promoting effects, the line between them and traditional medicines, which are subject to very strict manufacturing and approval regulations, can become blurred. Where a product meant for human consumption presents itself as having properties that are beneficial to health, a careful delineation must be made to determine whether the regulatory regimes governing medicinal products or those concerning foodstuff and nutritional supplements apply.

Products presented as medicine can be treated as “presentation medicinal products” and be subject to the strict regulations of the German Medicinal Products Act (Arzneimittelgesetz). For a product to be classified as presentation medicine it must be intended as a means of healing, alleviating or preventing diseases or pathological conditions, and be intended for use in or on the human body. Alternatively, presenting a product in a way that the average informed consumer is led to believe conclusively and “with certainty” that it’s a product with such properties is also sufficient to classify it as a presentation medicinal product. This is true even if it doesn’t meet the pharmacological requirements to be considered a functional medicinal product and would otherwise be considered a foodstuff.

So a product labelled as a dietary supplement is still a medicinal product if the circumstances make it appear so, eg through the type of advertising (eg as a traditional remedy) or the promotional mention of (supposedly) medically effective ingredients.

Public perception plays an important role in determining whether a product is a presentation medicine. This broad definition aims to protect consumers from products that don't have the efficacy they're entitled to expect. This is why special care must be taken not to make nutritional supplements appear like traditional pharmaceuticals, for instance, by over-extolling alleged specific health benefits in the product’s general presentation.

 

Manufacturing and launching on the food supplement market

If a product is considered a medicinal product and not a foodstuff, wholly different rules would apply to every step of the manufacturing and sales process, including under the German Medicinal Products Act. For instance, the necessary manufacturing authorisation requires extensive evidence of quality assurance, qualified personnel, and production conditions. The necessary product approval requires a large number of documents, including pharmacological, toxicological, and clinical data, which often takes years to collect and can cost millions. Disregarding these rules can lead to both regulatory violations, sanctioned by hefty fines, and criminal charges, which result in both fines and jail time.

Where a dietary supplement doesn't cross the line to being considered a presentation medicinal product, many of the rules that apply to food will also apply to food supplements, along with some additional rules that are specific to them.

If the manufacturer or importer wishes to place such a product on the market, it doesn't have to undergo a formal authorisation procedure, but there is a notification requirement. In Germany, for example, the Federal Office of Consumer Protection and Food Safety must be notified.

The fact that there is no formal authorisation also means that the ingredients in food supplements are not examined by a public authority. But this doesn't mean that manufacturers are completely free in their choice of ingredients. On the contrary, there are clear regulations governing which ingredients can and can't be used. Manufacturers who fail to comply with these requirements may even face criminal prosecution. In addition, there is a risk that products will have to be recalled or that civil liability towards consumers will arise.

In the EU, the use of vitamins and minerals in food supplements is governed by Directive 2002/46/EC, which establishes a harmonized list of permitted substances. In Germany, the Food Supplement Regulation (Nahrungsergänzungsmittelverordnung) implements this directive and specifies that only substances listed in Annex I and II of the Directive can be used in food supplements. These vitamins and minerals have already been tested by an EU committee for their safety and bioavailability for the human body and have been included in this positive list.

The addition of other nutritional substances such as amino acids, essential fatty acids and plant or herbal extracts isn't regulated in detail by law. The Regulation 1925/2006/EC specifies only a few substances that can't be used in food and therefore also not in food supplements. In addition, the use of novel foods in food is regulated. The term novel food refers to any food that wasn't used for human consumption to a significant degree in the EU before 15 May 1997 and that meets several other criteria. These novel foods must be authorised by the EU in accordance with the Regulation 2015/2283/EU and can only be used in food after they’ve been added to an EU list of approved novel foods.

Although there’s no formal authorisation procedure, several laws must be complied with in the manufacture of food supplements. It should also be pointed out once again that the manufacturer or distributor is responsible for the safety of their products and could be liable under certain circumstances.

In the actual production of food, further rules must also be observed, such as those laid down in the Regulation 852/2004/EC on the hygiene of food, Germany's Food Hygiene Regulation and the Regulation on food safety (Regulation 178/2002/EC). These rules are intended to protect consumers from health risks caused by contaminated food.

See part two of this article for more information regarding particularities of manufacturing contracts.

 

Labelling of food supplements

German customers who regularly purchase food supplements will be familiar with the following statement: “Do not exceed the recommended daily intake.” This and other information must be provided on the packaging of food supplements. It’s intended to enable consumers to make informed choices about their diet.

The obligation to label products in a specific manner arises for food in general in particular from the European Food Information Regulation (Regulation 1169/2011/EU) and, for food supplements, additionally from the German Food Supplement Regulation.

Food labelling must include several elements, such as the name of the food, its ingredients, certain allergens, the best-before date, the name and address of the company responsible and, usually, the nutritional values of the food (known as the Big 7). The labelling requirements that apply to a certain food product can be found using the European Commission's Food Labelling Information System. In addition to the specific requirements, information about food must be accurate, clear, easily understandable and not misleading. For example, no characteristics, effects or non-existent ingredients of the food may be falsely suggested.

The same labelling requirements must generally be observed for food supplements. But some special provisions also apply. The nutritional values of food supplements, for example, don’t have to be listed on the packaging. And there are some additional obligations, for instance, as mentioned, that the recommended daily intake should not be exceeded. It must also be stated that food supplements shouldn’t be used as a substitute for a balanced and varied diet. Furthermore, no claims may be made that a balanced and varied diet generally doesn’t provide adequate amounts of nutrients (without supplements). Finally, the recommended daily intake, along with reference values for the recommended maximum intake per day, must also be stated, if such standards have already been legally established for the substance in question.

Further labelling requirements may also arise from the European Health Claims Regulation (Regulation 1924/2006/EC). If health claims are displayed on product packaging, they must meet the requirements of the regulation. Special obligations regarding the packaging may apply if health claims are used. This includes providing information about the importance of a healthy lifestyle, the amount to be consumed and the pattern of consumption necessary to achieve the claimed beneficial effect, as well as warnings for certain groups of people or disclaimers about risks associated with excessive consumption. Those specific requirements will be discussed in detail in the second part of this article on the marketing of food supplements.

Failure to comply with the labelling requirements may result in criminal penalties and fines. However, competitors and associations, particularly those affiliated with consumer protection, can also assert claims in the event of infringements. Claims may include an obligation to refrain from selling the products without sufficient labelling or even to recall products that have already been shipped to retailers.

In the context of labelling and general presentation of a dietary supplement, issues can also arise surrounding its classification as a presentation medication instead of foodstuff (see above). Where the labelling of a nutritional supplement skews its overall impression to reflect that of a medicinal product, the arduous labelling requirements of the German Medicinal Products Act would also apply, requiring precise, legally compliant design of packaging and package inserts. The particularities of labelling food supplements regarding e-commerce activities will be discussed in detail in Section E in the second part.

This article will be continued in a second part, where we will discuss the marketing aspects and related contractual issues in connection with food supplements and legal specifics and risks of M&A in the food supplement industry.