The natural health industry says half a billion dollars in export earnings will be left on the table unless the government reverses a proposed legislative change.
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The Ministry of Health is currently developing a new regulatory regime for therapeutic products which would also include a separate scheme for Natural Health Products (NHPs).
Examples of NHPs include garlic capsules, magnesium tablets, kawakawa balms, and herbal products.
Natural Health Products NZ, which represents 80 percent of the country's dietary supplement and natural health product companies, said it was "surprised and disappointed" to see the ministry's latest update on the regime would exclude its members from making evidenced-based claims for natural health products.
The industry body said if unchanged, it could miss out on $500m in export earnings.
In its update, the ministry specifically said the regime would include "the ability to make health benefit claims that can be substantiated by robust scientific or traditional evidence".
The organisation's government affairs manager Samantha Gray said on the surface the requirement seems reasonable.
"But when you get into the detail the level of health benefit claims that they intend to enable doesn't go far enough."
An example, she said, was for companies to be able to make low-level therapeutic claims such about symptomatic relief which is substantiated by appropriate levels of evidence.
The issue is the extent to which the legislation would allow certain types of claims that are permitted in other countries, Gray said.
She said it was calling on the ministry to allow firms to make all the therapeutic and health claims that Canada and Australia permit, as these countries have a high degree of integrity in how health claims were assessed.
"Aligning this country's permitted claims with Australia's and Canada's will quickly resolve our sector's export market roadblocks by enabling New Zealand to compete effectively in the global market - something that is not currently possible."
The industry also wanted an export exception that would mean they could make health claims based on the importing countries requirements.
The Ministry of Health responded to RNZ's questions saying the bill was still being developed and it would comment on the details.