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One of the objectives of the Nutrition and Health Claims Regulation (EC) No. 1924/2006 (NHCR) is protection and promotion of innovation in the food industry. The purpose of this paper is to explore the impact of the NHCR on both innovation and the sourcing of external knowledge in the European Union (EU) food sector.

An online survey was conducted which resulted in a sample of 105 EU companies for the study. Structural equation modelling was used to examine the nature of relationships that existed among the challenges related to the implementation of the NHCR, external sources of knowledge and innovation.

Challenges related to the NHCR are currently found to have a negative direct impact on product innovation. However, they have a positive indirect effect on product innovation, especially in the case of small and medium-sized enterprises. They also seem to positively affect external knowledge sourcing. Additionally, sources of external knowledge are found to have a positive effect on product and process innovations.

This study provides insights to different stakeholders in the food industry who might wish to work jointly and address the various issues related to the requirements of the NHCR and facilitate compliance with the regulation.

Understanding the impact of the NHCR on innovation seems pivotal because innovation plays an important role in the EU food sector. To this purpose, the paper delivers insights into some main compliance challenges and their effect on innovation.