The Co-Evolution of Markets and Regulation in the Japanese Functional Food Industry: Balancing Risk and Benefit

Summary

This research examines how Japan regulates functional foods – products designed to promote health beyond basic nutrition. The study shows that food regulations have evolved alongside industry growth, trying to balance protecting consumers from unsafe products while allowing companies to innovate and make health claims. Using a framework that examines both safety concerns and consumer benefit information, the authors trace how Japan’s regulatory system changed from the 1960s to today, showing how regulations respond to industry needs and safety incidents.

Background

Chronic diseases account for 75% of global mortality and healthcare costs continue to escalate. Functional foods have emerged as a preventive healthcare solution offering benefits beyond essential nutrition. However, regulatory frameworks governing functional foods remain complex, requiring balance between consumer protection and industry innovation.

Objective

This study proposes a risk-side/benefit-side framework to analyze functional food regulations and examines the historical evolution of Japan’s functional food regulatory system from the 1960s. The research addresses how regulations and markets co-evolve and affect industry development.

Results

Regulations have co-evolved with industry growth, dynamically balancing risk and benefit sides. Key milestones include the introduction of the Foods with Function Claims system and the Beni-koji contamination incident in 2024. The risk-/benefit-side framework reveals regulatory adjustments responding to industry development and safety incidents.

Conclusion

The risk-/benefit-side framework provides valuable insight into the interplay between regulation and innovation in functional foods. Findings contribute to regulatory science and offer practical implications for policymakers designing frameworks that promote both innovation and consumer welfare.
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