1. Massmart Presentation on Medicines and Related Substances Amendment Bill, 2008 Presentation by Graham Rebello Massmart Channel Executive

2. The Massmart Portfolio MASSMART HOLDINGS 243 Stores MASSDISCOUNTERS GM discounters >LSM 5 - 10 92 stores MASSWAREHOUSE Warehouse Club > LSM 5 - 10 13 stores MASSBUILD DIY HI Outlets > LSM 6 - 10 67 stores MASSCASH Food cash & carry > LSM 2 - 5 72 stores + 574 members

3. “Foodstuff” & “Cosmetic” Foodstuffs, Cosmetics and Disinfectants Act and Regulations thereunder –Directorate of Food Control –Current food labelling regulations GNR2034/1993 - Labelling and Advertising of Foodstuffs, Regulation 2(9)(c) prohibits use of words such as ‘heal’, ‘cure’, ‘restorative’, or any other medicinal, therapeutic or prophylactic claim. –Proposed Food labelling regulations published 07/2007: Regulation 14(k) prohibits use of the word ‘cure’ or any other medicinal claim except those health claims permitted in terms of these regulations. See Reg 62 -Nutritional Supplements regulations currently being prepared by Directorate of Food Control which will regulate all aspects of supplements.

4. Foodstuffs & Cosmetics – “products” Medicines and Related Substances Act –Regulates medicines and related substances –Now: Bill introduces foodstuffs & cosmetics if “medicinal claims are made” – no definition creates confusion? Regulatory enforcement Manufacturers and importer compliance Wholesalers and Retailers compliance Customer issues / awareness –Lead to uncertainty and duplication of functions of various directorates within the Department of Health –“Food Control” should be in control of claims made in respect of foods?

5. Wholesaler Massmart are “wholesalers” in the broad meaning of the word and by definition within GN R510 of 10 th April 2003 – “"wholesaler" means a dealer who purchases medicines from a manufacturer and sells them to a retailer and includes a wholesale pharmacy;” : –Jumbo sells foodstuffs, cosmetics, and OTC medicines to both the public directly (consumers) and to independent retailers (commercial). –The wording of Section 22H of the Act, should be redrafted to exclude Cash and Carry wholesalers who sell general consumer goods to consumers on demand from the definition of "wholesaler". –Accordingly a definition of wholesaler should be introduced and an amendment to Section 22H is proposed (Section 27 of the Amendment Bill).

6. Schedule 0, Complementary and Unregistered Medicines Schedule 0, Unregistered and Complementary Medicines are like other fast moving consumer goods –Highly competitive market because of extensive sales channels through companies like Massmart –Competition is healthy and the consumer effectively dictates prices in a highly competitive market –Advantageous for the poor who can’t afford to consult doctors but need simple medication for ailments –Sold widely to spaza shops and small retailers for resale in small quantities to the public, especially in rural areas. Exemption from Sections 18A and 22G of the Act (prior to amendment) must be made explicit in the Bill

7. Unforeseen Consequences Many of Massmart’s outlets are located in rural areas and serve rural communities Supply spaza shops and small retailers as well as the public directly (bulk purchases) Massmart would have to discontinue entire ranges of products so as not fall foul of the Bill either because of the lack of definition of “wholesaler” and “medicinal claim” fortified maize and wheat, margarines claiming to reduce cholesterol etc could be considered medicines Spaza and small retailers would be unable to source these products and the rural consumer would be unable to obtain such products which would only be stocked in pharmacies

8. Submissions Introduce a definition of “wholesaler” which clarifies the position of companies such as Massmart Exclude all foodstuffs and cosmetics from the Bill Alternatively: –adopt a definition for “medicinal claims”. –Amend Section 27 of the Bill (Section 22H of the Act) to remove unforeseen consequences around wholesalers selling foodstuffs –Amend Section 7 of the Bill (Section 15(7) of the Act) to reduce the administrative burden on small companies which manufacture foodstuffs considered to fall under the Bill

9. Proposed Amendments Proposed New Definitions –“medicinal claims” – claims directed at healing or curative properties or attributes of the human body by a foodstuff or cosmetic; –“wholesaler” – entity which distributes or sells medicines and/or medical devices solely to the retail, but excluding general merchandise and food wholesalers;

10. Proposed Amendment Section 27 (22H of the Act) (1)(a) No wholesaler shall purchase [medicines] products medicines or medical devices from any source other than the original manufacturer or from the primary importer of the finished product. (b) A wholesaler shall sell [medicines] products medicines or medical devices only into the retail sector. Section 7 of the Bill (15(7) of the Act) Any certification or registration under this section, shall be valid for a period of five years in the case of medicines and medical devices and indefinitely until revoked in the case of cosmetics and foodstuffs and may be made subject to such condition as may with regard to the succeeding provisions of this section to be determined by the Authority or the Minister respectively.