GNC, New York Reach Deal On Herbal Supplements

(RTTNews) - Health and wellness products retailer GNC Holdings, Inc. (GNC) said Monday it has reached a deal with the New York Attorney General that affirms that its Herbal Plus products were in full compliance with the Food and Drug Administration "Current Good Manufacturing Practices."

Under the deal, GNC has also agreed to perform DNA barcoding on the "active" plant ingredients used in its products; implement testing for contamination with allergens, both before and after production; and post prominent signage advising consumers of the processed, chemical nature of extracts.

The Pittsburgh, Pennsylvania-based retail giant will be required to implement the new procedures in all of its more than 6,000 stores across the United States, making the deal the first in the country to require testing standards for herbal supplements that exceed current FDA requirements.

New York Attorney General Eric Schneiderman last month sent cease-and-desist letters to GNC, Target Corp. (TGT), Walgreens Boots Alliance, Inc. (WBA) and Wal-Mart Stores Inc. (WMT), after a study failed to detect identifiable genetic material for the plants depicted on the labels in most of the four retailers' herbal supplement products. The study further detected DNA associated with plants not listed on the labels, as well as the presence of potential allergens.

Responding to the Attorney General's inquiry, GNC conducted rigorous tests both internally and by independent third parties that proved that the company's products are safe, pure, properly labeled and in full compliance with all regulatory requirements. The testing also showed that the company's products contain all herbal extracts listed on their respective labels.

GNC said it has now restored its full assortment of Herbal Plus products to all its stores in the state of New York.

The company said it has preserved the specific product lots of the five products that were the subject of the inquiry for use in defending itself against the lawsuits that have been filed subsequent to the New York Attorney General's announcement in February. The company believes the lawsuits are completely without merit and will defend itself aggressively.

GNC shares are currently trading at $49.08, up $3.04 or 6.60%. The shares reached a new 52-week high of $49.66 earlier in the session.