The Potential of Nutritional Industry in Indonesia and Its Regulations

Instead of only fulfilling their primary needs, Indonesian consumers are now seeing secondary and tertiary products as important commodity.

Indonesia is the largest emerging market in South East Asia. With its fast growing population and increasing number of its citizens’ purchasing power, there is an apparent trend that Indonesian consumers tend to choose products with added values. This also happens in nutritional industry as more and more people have bigger concern on both health and appearance. There are several segments of nutritional industry in Indonesia, including baby nutrition, sports nutrition, vitamins and dietary supplements, herbal and traditional products, weight management, allergy care products, consumer health products, etc (find out the updated business fields which are allowed for foreign investment). Based on the data obtained from AC Nielsen, Indonesian people’s expenditure on health and nutritional products for babies, especially milk formula and babies’ snacks, keeps increasing.

Growth of Nutritional Industry

The fast developing gym or fitness facilities all around urban areas in Indonesia also become an important indicator of the potential market of nutritional industry in this country. It is because those places become one of the best target markets for vitamins, supplements, and dieting products, targeting not only females, but also males in productive ages. It is reported that more than 50% of the Indonesian population are in their productive age. Moreover, it is also proven that the growth of modern retail shops (bisnis.com, 2016) like supermarket and convenience stores also escalate drastically in the cities in major islands of Indonesia, which also bring a significant impact for the growth of Nutritional Industry as the target market for such products are urban people or those middle-up societies. Also, Indonesian people are now getting more and more familiar with social media marketing, making the market penetration in this country even easier.

From the description above, we can have a clear image on how big the potential of Nutritional Industry in Indonesia. The next section of the article will mainly discuss about the regulation of nutritional products’ companies and the registration of the products.

The Regulation and Registration Process of nutritional industry

BPOM/ Indonesian National Agency for Drug and Food Control

All imported products must follow strict regulations in order to be marketed in Indonesia. This also applies in nutritional industry. The first thing to consider is all products must be registered in BPOM (Badan Pengawas Obat dan Makanan/Indonesian National Agency for Drug and Food Control). All importers must register their nutritional products in one or more registration units in BPOM, including:

1. Directorate of Drug and Biological Product Evaluation for all drugs and biological products, including vaccine, hormone, enzyme, and other kinds of fermentation products.
2. Directorate of Traditional Medicines, Cosmetics, and Food Supplements Evaluation.
   o The traditional medicines is all products with at least one ingredient coming from plants, animals, minerals, essence preparation or the combination of those material that have been used for generations as a proven medication that can be accepted by the general community.
   o Food supplement is any non-food products that can be used as complementary nutritional needs, which contain vitamins, minerals, amino acid, etc. and can maintain and improve health condition because the products have nutritional values.
3. Directorate of Food Safety Evaluation.

Registration Process

In order to register, every product must follow this process:

1. Pre-assessment process. The process will take approximately 20 working days. If there are any changes in the product details during this process, there will be extra 10 working days for each variation.
2. Assessment process. The process will take up to 60 working days per product item. This process can be extended if BPOM thinks that further test are needed or extra documents are required. When your registration got refuse, you can either re-register or appeal the assessment stage.

Documents Needed

Below are the requirements of documents for registration process:

1. Certificate of Manufacturer or Certificate of Importer.
2. Import License from the importer.
3. Letter of Authorization from the manufacturer.
4. Certificate of Free Sale from the Government of the country of origin, legalized by the Indonesian Embassy/Consulate General.
5. Good manufacturing Practice from the Manufacturer.
6. A document stating the formula of the products and the direction of consumption from the manufacturer
7. A document stating the manufacturing process and the technology used to produce the products from the manufacturer.
8. Certificate of safety test from BPOM of laboratories appointed by BPOM.
9. A document of Toxic Test from BPOM or equivalent body in the country of origin.
10. Import Information Letter (Surat Keterangan Impor) from BPOM.

Labeling

Indonesian Government requires all important of nutritional products to include labels in Bahasa Indonesia. In the label, there are some obligations, including:

1. “Food Supplement” word.
2. Product Name.
3. Net weight.
4. The name and the address of manufacturer.
5. The name and the address of importer.
6. Direction of use, Indication, and Serving Size.
7. Ingredients.
8. Energy value per serving.
9. Additional content (such as alcohol, additive, artificial ingredients).
10. Expiry date, production code, and registration number.
11. Side effects, if any.
12. Warning, if any.
13. Other information related to quality, safety, or source of materials.

HALAL Certificate

The Government of Indonesia does not require all important products to be labeled with HALAL. However, there are some cautions that should take notes by all importers regarding to the use of Non-HALAL Substances, including the use of pork or pig-related ingredients (both as a substance to make the product and in the production process in any quantity) and alcohol (also in any quantity). HALAL label, pig/pork, and alcohol notification must be clearly readable in the label.

Penalties for Non-Compliance

All companies (importers and manufacturers) that do not follow the Indonesian rule for imported products will get sanctions based on the level of violations, such as a written warning, suspension or importation or distribution of the products, extermination or re-exportation of the products, suspension and revocation of the Market Authorization Permit (check out how to set up a company in Indonesia). Due to the strict regulation, we highly recommend any companies that wish to import nutritional products to Indonesia to seek for business consultation to assist you with all the documents and legal matters. We have a special unit to deal with this issue and help you flourishing your nutritional business in Indonesia.

Confuse about all the process and regulations, and still not sure how to start? Don’t worry, Cekindo will help you to prepare all the required documents and we will assist you until your products legally registered in Indonesia. You can also updating yourself with the latest business issues in Indonesia by subscribing our monthly newsletter.

Resources:

• cmaustralia.org.au
• euromonitor.com
• smepost.com
• bisnisukm.com
• indonesia.tpo.ir