Artemis managing director Sandra Clair produces a range of therapeutic teas, creams, oils and tinctures in her small South Dunedin factory, employing six staff (4.5 full-time equivalent).
As well as supplying the domestic market, the business exports to Japan and Hong Kong.
A consultation document on a proposed natural health products Bill includes a per product annual product approval maintenance fee of up to $2000.
The Ministry of Health has sought submissions on the consultation paper, which close next Monday.
Ms Clair said there was a common misconception about stores such as hers of a "Wild West" of unregulated alternative health products.
This was incorrect as strict regulation was in place.
Artemis was regulated by the Dunedin City Council, for food premises checks, and the New Zealand Food Safety Authority for technical rules relating to manufacturing.
Also, for its organic status, Artemis was audited with international guidelines.
Ms Clair said it appeared under the new regime, producers would still be unable to cite clinical trial results nor mention specific diseases their products helped.
Ms Clair said changes were needed to allow natural health producers to make claims, as long as they were backed by evidence.
She believed the industry was supporting New Zealand's mainstream health system by aiding some health complaints without being a burden on taxpayers.
The per-product maintenance fee alone could cost Artemis up to $60,000 a year.
The effect would be to stifle product innovation, and encourage businesses to withdraw less popular lines, Ms Clair said.
She said a proposed list of approved ingredients ought to be flipped, to a proposed list of banned ingredients.
Anything not on the list would need to be officially approved, even if it had been used safely for hundreds of years.
This was the practice in most overseas countries, she said.
Green Party health spokeswoman Sue Kedgley said it was important to remember the Bill had not been drafted and was in its consultation stage.
The Bill had caused "panic"and many in the industry were concerned about it.
Ms Kedgley said there were parts of the proposals she was not happy with, but she declined to elaborate.
The Bill would increase the health claims natural health producers could make, she said.
Change was needed as an increasing amount of product came from offshore and potentially contained unsafe ingredients.
