retail news in context, analysis with attitude

The New York Times reports this morning that supplement retailer GNC has reached a deal with the New York State attorney general's office, promising "to institute sweeping new testing procedures" for dietary supplements "that far exceed quality controls mandated under federal law." The story quotes experts as saying that says that "the announcement marked an initial but significant step forward for the $33 billion-a-year supplement industry, which is loosely regulated and plagued by accusations of adulteration and mislabeling."

The deal comes after GNC, Walmart, Target and Walgreen were accused of selling dietary supplements that were not what their labels said they were, which the state Attorney General said was reflective of broader problems in the industry.

According to the Times, "GNC, which has more than 6,500 stores nationwide and annual revenue of $2.6 billion, said that its herbal products had passed several rigorous quality-control tests and that it stood by their quality. But as part of its agreement with the attorney general, the company said it would in the next 18 months put in place additional quality-control measures to restore the trust of its customers and set new standards for the rest of the industry.

"The company said it would use advanced DNA testing to authenticate all of the plants that are used in its store-brand herbal supplements, and extensively test the products for common allergens like tree nuts, soy and wheat. In addition, GNC will submit semiannual reports proving that it is complying with the attorney general’s demands."

The Attorney General's office is not commenting on the Times report, but it seems clear that it is hoping to reach similar agreements with the other three retailers.
KC's View:
It remains somewhat amazing to me that rigorous quality control and making sure that ingredients actually match up to product labels is not something that is on the books, mandated by federal law, and not something that needs to be litigated on a state-by-state basis.

I would think that the New York deal is going to have repercussions through the country, because what GNC does in New York it is going to have to do everywhere. Which it should. Which every player in this industry should. And I think the major players in this segment should go overboard to make sure they are doing what is necessary to gain and sustain the public trust.