Makers and sellers of manuka honey, deer velvet, echinacea and other natural health products will have to reveal the science behind any health claims and publish it on their product labels.
A law change to regulate the $1 billion natural health market by requiring products to be safe, accurately labelled and high-quality has cross-party support.
The bill has polarised businesses and the public. Exporters and some consumers welcomed the safeguards and validation of a regulatory system, but others were concerned it would create costs and barriers for makers and users of low-risk products such as herbal tea.
Parliamentary health committee chairman Paul Hutchison said MPs had worked "bloody hard" to strike a balance in the bill, which would create a regulatory authority to assess natural health products.
He believed the legislation would bring greater transparency and accountability to the natural health market, but would not penalise makers or buyers of low-risk products by introducing needlessly tough costs or bureaucracy.
Natural Health Products NZ executive director Michelle Palmer said it was rare for industry to encourage regulation, but her members welcomed the changes.
She said 80 per cent of the natural health market was in exports, and an updated regulatory regime gave overseas buyers greater confidence in New Zealand products.
Some small-to-medium-sized businesses have told Parliament that the new costs of compliance would be unsustainable.
Ms Palmer said she believed the only companies that would be penalised would be producers with poor manufacturing standards.
The select committee yesterday said any claims of health benefits by manufacturers should be backed by scientific or traditional evidence.
This followed submissions from health professionals and academics such as the Prime Minister's science adviser Sir Peter Gluckman, who said companies should have to declare that they held proof of their products' benefits.
Mr Hutchison: "Say you wanted to claim that a honey product was going to be a cure for chronic acne or had some clear benefit to cancer, clearly you'd want to have evidence behind its efficacy."
MPs proposed an amendment to the bill to make companies publish the basis of any health claims on the product's label. The label would also have to state whether the benefits were based on science or traditional knowledge.
Labour health spokeswoman Maryan Street said some manufacturers complained that they would have to cover their products in "microscopic" writing.
"But I think producers will work it out," she said.
Green Party natural health spokeswoman Mojo Mathers said it was clear from the submissions that New Zealand needed regulation to protect consumers and industry from "backyard cowboy operators and dodgy imports".
She said she was pleased that traditional medicine practice used in homes, such as rongoa [the medicinal use of plants], would be exempted from the legislation.
* Establishes a regulator for commercial natural health products
* Products will be notified to an online public register.
* Regulators will assess the ingredients, health claims and evidence for natural health products.
* A list of banned ingredients will be drawn up.
* A technical advisory committee will be created to help the new authority assess products.
* It is expected to come into force by January 2014, and companies will be given a transition period to meet the standards demanded by the authority.