Citing an ongoing lack of communication and clarity in the European Food Safety Authority (EFSA) process, Danone announced the withdrawal of its article 13.5 claims for spoonable yoghurt, Activia, and drinkable yoghurt, Actimel in its Q1 results this morning.
The Actimel immunity claim was only resubmitted by Danone two months ago while its Activia gut health claim was re-entered late in 2009. Both dossiers contained more than 10 probiotic, strain-specific clinical trials.
EFSA’s health claims panel was due to deliver verdicts on Danone’s claims in the “coming weeks”, but increasingly frustrated by EFSA’s reluctance to communicate its scientific requirements, Danone decided to pull the dossiers.
Danone vice president of external affairs and head of EU regulatory affairs, Patrick O’Quin, told NutraIngredients.com the company had no idea how the claims assessment process was progressing, despite many attempts to gain status updates from EFSA.
“This complete lack of contact is one of the main issues we and the rest of the industry has. We now hope to take advantage of the upcoming stakeholders’ meeting,” O’Quin said, in reference to a meeting EFSA has called at its Italian headquarters on June 1.
Danone gave similar reasons for withdrawing its Activia and Actimel claims in April last year ahead of a health claims meeting EFSA held last June, but denied a sense of déjà vu as this time EFSA had made clear its agenda.
“The topics to be discussed are exactly those we want clarification on so we hope it will be a very positive meeting,” he said. “But in the meantime we are preparing for the worst-case scenario in terms of our marketing and communications although we are not as yet obliged to change anything.”
For more on that meeting click here.
An article 14, disease reduction diarrhoea claim remains in the system because it was not expected to be adjudicated on until after the June meeting, said chief financial officer, Pierre-Andre Terisse in a press conference announcing the financial results this morning.
Meanwhile, a new group, the European Health Claims Alliance, has sent a letter containing more than 350 signatures from concerned industry stakeholders to new EC president José Manuel Barroso.
The letter invites him to scrap the publication of health claim opinions in batches due to its distorting effect; unnecessary and disproportionate costs and creation of confusion.
It can be found here.
Financial forecasts
The Q1 results included sales of €4bn for the quarter, with the dairy division showing 12.5 per cent growth.
Most analysts predict ongoing positive fortunes for the company despite Danone stating that it is confronting a, "challenging financial, economic and social environment in 2010, with continued difficult consumption trends in western economies, weak emerging currencies and inflation of raw materials."
Those results showed growth of seven per cent for the whole group – quarter on quarter.
Senior research analyst, Andrew Wood, from Sanford C Bernstein in New York, expected Danone’s withdrawal to have little effect on its financial fortunes.
“We consider that the only development for bearish analysts/investors to focus on is the withdrawal of the EFSA application for Actimel and Activia,” he said.
“We consider that this was fairly well-flagged by management, and that there is still an intention to re-apply once the EFSA process and requirements are clarified, hopefully in a new meeting announced for June 2010. Our view remains that we see little short-term headwinds on volume momentum from withdrawing health claims.”
Wood said sales figures in the UK and France confirmed his observation.
“If Danone is struggling to understand the EFSA process and obtain approval then it is very unlikely that others will suffer less. Indeed, EFSA might eventually prove to be a strong barrier to entry and strong competitive advantage for Danone.”