List of Contents and Tables

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2 List of Contents and Tables HERBAL/TRADITIONAL PRODUCTS IN SWEDEN - CATEGORY ANALYSIS... 1 Headlines... 1 Trends... 1 Competitive Landscape... 2 Prospects... 2 Category Data... 3 Table 1 Sales of Products: Value Table 2 Sales of Products: % Value Growth Table 3 Products Company Shares Table 4 Products Brand Shares Table 5 Forecast Sales of Products: Value Table 6 Forecast Sales of Products: % Value Growth HERBAL/TRADITIONAL PRODUCTS IN SWEDEN - COMPANY PROFILES... 8 Abigo Medical Ab in Consumer Health (sweden)... 8 Strategic Direction... 8 Key Facts... 8 Summary 1 Abigo Medical AB: Key Facts... 8 Summary 2 Abigo Medical AB: Operational Indicators... 8 Company Background... 8 Production... 8 Competitive Positioning... 9 Summary 3 Abigo Medical AB: Competitive Position Friggs Ab in Consumer Health (sweden)... 9 Strategic Direction... 9 Key Facts... 9 Summary 4 Friggs AB: Key Facts... 9 Summary 5 Friggs AB: Operational Indicators Company Background Production Summary 6 Friggs AB: Production Statistics Competitive Positioning Summary 7 Friggs AB: Competitive Position CONSUMER HEALTH IN SWEDEN - INDUSTRY OVERVIEW Executive Summary Resilience To Wider Economic Forces Liberalisation Boosts Sales Growth Increasing Concentrated Environment Distribution Increasingly Diverse Positive Outlook Key Trends and Developments... 12

3 the Population Continues To Age Consumer Healthcare Proves Resilient To Wider Economic Forces Health and Wellness A Driver of Sales Swedish Consumers Are More Willing To Self-medicate Liberalisation Does Not Lead To Increased Price Competition Market Indicators Table 7 Consumer Expenditure on Health Goods and Medical Services Table 8 Life Expectancy at Birth Market Data Table 9 Sales of Consumer Health by Category: Value Table 10 Sales of Consumer Health by Category: % Value Growth Table 11 Consumer Health Company Shares by Value Table 12 Consumer Health Brand Shares by Value Table 13 Penetration of Private Label by Category Table 14 Sales of Consumer Health by Distribution Format: % Analysis Table 15 Sales of Consumer Health by Category and Distribution Format: % Analysis Table 16 Forecast Sales of Consumer Health by Category: Value Table 17 Forecast Sales of Consumer Health by Category: % Value Growth Appendix OTC Registration and Classification Advertising Standardised Packaging Requirements Vitamins and Dietary Supplements Registration and Classification Advertising Self-medication/self-care and Preventative Medicine Switches Summary 8 OTC Healthcare Switches Definitions Summary 9 Research Sources... 28

4 HERBAL/TRADITIONAL PRODUCTS IN SWEDEN - CATEGORY ANALYSIS HEADLINES Current value sales reach SEK1.2 billion in 2010, an increase of 1% Growth is driven by consumers seeking a more natural approach to healing and prevention Herbal/traditional calming and sleeping products recorded the highest current value growth in 2010 at 7% Procter & Gamble Sweden is the leading category player with a 2010 value share of 20% Constant value sales are expected to reach SEK1,203 million in 2015, which represents a decrease of -1% on 2010 estimates TRENDS Growth is driven by consumers seeking a more natural approach to healing and prevention. In current retail value terms, 2010 s growth was faster than the CAGR recorded for the review period. This reflects the increased availability and distribution of herbal/ traditional products. Products are all the more likely to be found in mass market channels such as supermarkets. Herbal/traditional calming and sleeping products recorded the highest retail value growth in 2010 at 7%. Increased product availability and distribution in mass market channels such as supermarkets and hypermarkets is a key driver of growth for herbal/traditional calming and sleeping products. The use of alternative medicine has increased in Sweden, and based on a study from 2002, about 20% of the adult population used some kind of alternative treatment. There are no signs that there has been any change from the situation in The most common treatment is acupuncture, which is sometimes prescribed by doctors. The number of types of different alternative medicines is huge, and includes ayurvedic treatments, Feldenkreis, homeopathic treatment, crystals, zone therapy, rosen therapy amongst many others. Grocery retailers is a leading distribution channel for herbal/traditional products. Medicated confectionery is the absolutely dominant product type in grocery retailers, although larger supermarkets/hypermarkets also stock the best-selling herbal/traditional brands. Internet retailing is increasing in share, but this is still a small distribution channel, with just 6% of sales in As with the case in previous years, sales continue to be dominated by health specialists. Swedish health authorities and doctors are highly sceptical and questionable of the potential health benefits offered by herbal/traditional products. Even though there are products which are approved by the Swedish Medical Agency, the approval does not state anything about their effects on people, as the only criteria for approval is that they are safe and of high quality. However, many consumers feel that these products actually help, and this is why many people use them. One of the main reasons why people use herbal/traditional products is scepticism about medicines and the healthcare system in general; either because of the side-effects of medicines or because the treatment does not help to cure or reduce illness. Word-of- mouth, recommendations by friends or positive articles in magazines also positively affects sales. Price is generally not an important factor. The general view on herbal/traditional products is positive, at least amongst the general public, and it is estimated that about 40% to 50% of the population has used herbal/traditional products at any time, according to a study from the University of Umeå. Swedish health authorities and doctors are however highly sceptical and questionable to the potential health benefits offered by herbal/traditional products, and consider that any positive benefits are from a placebo effect. Many consumers want to find alternatives to OTC and Rx medicines as a result of their potential side-effects. The highest users of herbal/traditional products are those with chronic illnesses, and many also combine herbal/traditional products with OTC medicines.

5 COMPETITIVE LANDSCAPE Medicated confectionary market players dominate sales of herbal/traditional products in 2010, due to the dominance of medicated confectionery overall. As all medicated confectionary sales are by definition herbal/ traditional, medicated confectionery was largely responsible for herbal cough, cold and allergy (hay fever) remedies accounting for 51% of overall value sales in herbal/traditional products in The leading brands in 2010 were Vicks from Procter & Gamble Sweden and Fisherman s Friend from Adaco AB. Green Medicine AB was ranked second with one of the most popular cough and cold remedy brands, Kan Jang. PROSPECTS Consumer interest in alternative therapies and using non-otc products will remain at a high level over the forecast period. Despite negative attitudes from health authorities, consumers will continue to retain an interest in herbal/traditional products as an alternative or complement to Rx and OTC products.

6 CATEGORY DATA Table 1 Sales of Products: Value SEK million Analgesics Calming and Sleeping Products Cough, Cold and Allergy (Hay Fever) Remedies Digestive Remedies Medicated Skin Care Medicinal Teas Smoking Cessation Aids Child-Specific Dietary Supplements Dietary Supplements Tonics and Bottled Nutritive Drinks Products Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 2 Sales of Products: % Value Growth % current value growth Analgesics Calming and Sleeping Products Cough, Cold and Allergy (Hay Fever) Remedies Digestive Remedies Medicated Skin Care Medicinal Teas Smoking Cessation Aids Child-Specific Dietary Supplements Dietary Supplements Tonics and Bottled Nutritive Drinks 2009/ CAGR 2005/10 TOTAL

7 Products Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 3 Products Company Shares % retail value rsp Company

8 Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 4 Products Brand Shares % retail value rsp Brand Company

9 Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 5 Forecast Sales of Products: Value SEK million Analgesics Calming and Sleeping Products Cough, Cold and Allergy (Hay Fever) Remedies Digestive Remedies Medicated Skin Care Medicinal Teas Smoking Cessation Aids Child-Specific Dietary Supplements Dietary Supplements Tonics and Bottled

10 Nutritive Drinks Products Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 6 Forecast Sales of Products: % Value Growth % constant value growth CAGR 2010/15 TOTAL Analgesics Calming and Sleeping Products Cough, Cold and Allergy (Hay Fever) Remedies Digestive Remedies Medicated Skin Care Medicinal Teas Smoking Cessation Aids Child-Specific Dietary Supplements Dietary Supplements Tonics and Bottled Nutritive Drinks Products Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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15 CONSUMER HEALTH IN SWEDEN - INDUSTRY OVERVIEW EXECUTIVE SUMMARY Resilience To Wider Economic Forces Despite the weak economic climate, Swedish consumer health sales proved to be relatively immune to wider economic forces. Consumer health posted strong retail value growth once again in 2010, albeit slower than the CAGR recorded for the review period as a whole. Most mature consumer health categories proved to be resilient and posted healthy growth rates as consumers still needed to attend to their minor ailments. Growth in 2010 was also supplemented and supported by a number of other factors such as the self-medication trend, liberalisation of pharmacy sales, the continued ageing of the Swedish population and increased category segmentation. Liberalisation Boosts Sales Growth The de-regulation of pharmacy sales occurred in November 2009, leading to the entry of numerous new pharmacy chains. As part of this process the sale of certain OTC medicines was liberalised with distribution via mass market channels such as supermarkets and hypermarkets now possible. This change led to a strong boost in sales prompted by the greater availability and distribution of consumer health products. However, despite the de-regulation of pharmacy sales, subsequent entry of new players in pharmacy retailing sales and product availability in mass market channels, increased or significant price competition had yet to occur in Swedish consumer health at the end of the review period. The lack of price competition in the context of greater product distribution consequently encouraged the recording of strong current retail value growth rates for Increasing Concentrated Environment Consumer health s sales were increasingly characterised by consolidation; numerous categories are dominated by a handful of players. Indeed major players are not just confined to one area of consumer health but have an overall presence across the spectrum of total consumer health sales was also a year that witnessed merger and acquisition activity. The domestic player, Meda AB, firmly stated strategic goals to establish itself as a leading player. This will be achieved through a combination of organic growth and acquisition, as the company s acquisition of BioPhausia OTC medicine product portfolio in September 2010 indicates. Distribution Increasingly Diverse Positive Outlook KEY TRENDS AND DEVELOPMENTS

16 the Population Continues To Age Current Impact Outlook Future Impact Consumer Healthcare Proves Resilient To Wider Economic Forces

17 Current Impact Outlook Future Impact Health and Wellness A Driver of Sales

18 Current Impact Outlook Future Impact Swedish Consumers Are More Willing To Self-medicate

19 Current Impact Outlook Future Impact Liberalisation Does Not Lead To Increased Price Competition

20 Current Impact Outlook Future Impact MARKET INDICATORS Table 1 Consumer Expenditure on Health Goods and Medical Services SEK million Pharmaceuticals,

21 medical appliances/ equipment Outpatient services Hospital services Total Source: Euromonitor International from official statistics, trade associations, trade interviews Table 2 Life Expectancy at Birth years Males Females Source: Euromonitor International from official statistics MARKET DATA Table 3 Sales of Consumer Health by Category: Value SEK million OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Products Allergy Care Child-Specific Consumer Health Consumer Health,,,,,, Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. Table 4 Sales of Consumer Health by Category: % Value Growth % current value growth 2009/ CAGR 2005/10 TOTAL OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Products Allergy Care Child-Specific Consumer Health Consumer Health Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care.

22 Table 5 Consumer Health Company Shares by Value % retail value rsp Company Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 6 Consumer Health Brand Shares by Value % retail value rsp Brand Company

23 Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 7 Penetration of Private Label by Category % retail value rsp Consumer Health OTC Sports Nutrition Vitamins and Dietary Supplements Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 8 Sales of Consumer Health by Distribution Format: % Analysis % retail value rsp Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers

24 Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table 9 Sales of Consumer Health by Category and Distribution Format: % Analysis 2010 % retail value rsp OTC SN VDS WM HTP AC Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total CSCH Store-Based Retailing Grocery Retailers Discounters Healthfood shops Hypermarkets Small Grocery Retailers Supermarkets Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Chemists/Pharmacies Parapharmacies/Drugstores Other Healthcare Specialist Retailers Mass Merchandisers Other Non-Grocery Retailers Non-Store Retailing Vending

25 Homeshopping Internet Retailing Direct Selling Total Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Key: OTC = over the counter; SN = sports nutrition; VDS = vitamins and dietary supplements; WM = weight management; HTP = herbal/traditional products; AC = Allergy Care; CSCH = child-specirfic consumer health Table 10 Forecast Sales of Consumer Health by Category: Value SEK million OTC 5 Sports Nutrition Vitamins and Dietary 2 Supplements Weight Management Products Allergy Care Child-Specific Consumer Health Consumer Health 8,,,,,, Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. Table 11 Forecast Sales of Consumer Health by Category: % Value Growth % constant value growth CAGR 2010/15 TOTAL OTC Sports Nutrition Vitamins and Dietary Supplements Weight Management Products Allergy Care Child-Specific Consumer Health Consumer Health Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy care as well as cough, cold and allergy remedies, medicated skin care and eye care. APPENDIX OTC Registration and Classification

26 European regulatory systems Marketing authorisations

27 Advertising Standardised Packaging Requirements Vitamins and Dietary Supplements Registration and Classification

28 National legislation Distribution Regulation of vitamins and dietary supplements

29 Regulation of herbal products Advertising Self-medication/self-care and Preventative Medicine

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