Pan debacle a PR disaster

By SIMON HENDERY

How does the health supplements industry recover from a week punctuated by horror stories about hospitalisations and pictures of products being stripped from shop shelves?

For someone usually selling positive messages, public relations consultant Allan Botica has a surprisingly blunt message for an industry reeling from the Pan Pharmaceuticals debacle.

"The situation at the moment is such that no amount of positive communications can rectify it."

The shutting-down of Australian supplements manufacturer Pan after dozens suffered adverse effects from a travel sickness pill it makes highlighted the wider global issue of industry regulation, says Botica.

Just over a week ago the Dietary Supplement Trade Association of America, in a bid to protect its reputation, decided it needed to dissociate itself from supplements which have claimed they can be used to treat Sars.

"When you get a situation like that something is fundamentally wrong. It's a wakeup call - trust has gone. And if it hasn't, it should."

New Zealanders spend $300 million a year on supplements and some in the local industry have moved quickly to distance themselves from Pan.

Several manufacturers and distributors have taken out advertisements vowing their products are not connected to Pan.

But Botica says the advertisements are a knee-jerk, short-term fix which does not address the fundamental issue.

His firm, Botica Butler Raudon Partners, does not have any clients in the sector, but if it did, what would he advise?

The industry should be pushing for the establishment of a stronger regulatory environment that would bring back consumer trust, he says.

"First, acknowledge that trust is gone, and then look to establish a basis for rebuilding trust - and finger pointing won't do it."

National Nutritional Foods Association president Bill Bracks says the industry has been pushing for a regulative framework, but does not want to be forced into the Australian model, because it is costly, rigid and ineffective.

"Australia is the most prescriptive regulation environment in the world, by far ... that hasn't stopped [the Pan incident] happening."

The industry has lobbied the Government unsuccessfully to implement health and therapeutic goods legislation drafted in 1998, which, he says, would provide a safe framework and regulations crucial to the industry's future.

"Regulation is a means to an end ... It is industry integrity that is required."

He says while the Pan fiasco will cost local retailers millions of dollars in the short term, the industry has always enjoyed a high level of public confidence 65 per cent of New Zealanders take health supplements.

NNFA member retailers' customers are telling them they are not concerned about dangers to their health but simply want reassurance that the products they are buying are safe.

To rebuild confidence the industry will push for a workable regulatory environment and publicise its track record: over the last 10 years $1.3 billion has been spent on health products, during which time there have been no fatalities, and less than 0.01 per cent adverse reactions.

The story so far

Monday

Australia's Therapeutic Goods Administration recalls 211 Pan Pharmaceuticals products and revokes the company's licence to manufacture medicines after dozens of users suffer adverse reactions to travel sickness pill Travacalm.

Tuesday

* New Zealand natural health product firms, including Blackmores and Healtheries, assure customers they have no link to Pan. Retailers strip Pan products off their shelves.

* The Food Safety Authority recommends that anyone with concerns stop taking Pan products, but New Zealand's open licensing regime means the authority has no idea what products are in circulation.

* The National Nutritional Foods Association describes the situation as a debacle.

Wednesday

* The Therapeutic Goods Administration adds a further 449 products to its recall list.

* Health Minister Annette King asks the health product industry to "be responsible on behalf of all New Zealanders" and recall any suspect products.

* National Nutritional Foods Association president Bill Bracks says the industry will act on the recall notice, but he believes the reaction by health authorities is "knee-jerk".

Thursday

* King orders a recall of those products named by Australian authorities, but a full list of what is sold here is still not available.

* Nutra-Life recalls almost 180 products ranging from evening primrose oil to women's iron tablets. Other companies such as Red Seal, Thompson Nutrition and Bullivants also withdraw products from sale.

* Pan managing director Jim Selim resigns.