Government targets junk food in proposed promotions ban

A consultation has been launched to investigate the planned regulations, but the Food and Drink Federation has claimed it will stifle innovation.

14 January 2019
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New rules to restrict retailers and chains from using promotions for foods deemed be high in fat, sugar and salt (HFSS) have been proposed by the Department of Health. The policy is part of the government’s work to tackle childhood obesity as currently one in three children are overweight or obese by the time they leave primary school.

The proposal includes restricting multibuy promotions of HFSS foods, such as ‘buy one, get one free’, ‘extra free’ and free refills of sugary drinks, and would apply to online outlets as well.  The initiative could cost retailers £340m and manufacturers £110m in lost profits over 25 years.

It would also ban promotions of HFSS products at checkouts, the ends of aisles and store entrances where their placement can often lead to pester power and impulse purchases, according to the Department of Health (DH).

A 12-week consultation will be conducted that explores which businesses, products and types of promotions should be restricted, and how businesses could put the new rules into practice. Exemptions have been flagged for small businesses so they are not penalised by the rules.

The Government is aiming to implement the regulations in late 2020. While the measures would cost businesses at least £90m a year, the DH said lowering the amount of overweight and obese people would result in a net benefit of £7bn over a quarter of a century.

The public will

Evidence from Public Health England suggested promotions increase the amount of food and drink people buy by around 20%. In 2015, promotions in Britain reached record levels and were the highest in Europe, with around 40% of expenditure on food and drink consumed at home spent on products on promotion.

Research also showed that multibuy type promotions in particular cause a greater sales uplift compared to other types of price promotions such as simple price reductions, according to the DH. A recent study from the Obesity Health Alliance found that 43% of all food and drink products located in prominent areas were for sugary foods and drinks, with just 1% for fruit and vegetables.

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While there is a lack of information on the use of price and location promotions in the out-of-home sector, the policy was not intended to make it more expensive for families who were eating out as a treat, according to the DH. This means offers like ‘kids eat free’ or lunchtime combination meal deals in retail are unlikely to be targeted.

“Promotional offers in out-of-home settings are generally targeted to multiple individuals eating out together as a group and therefore are less likely to encourage over-purchasing and overconsumption in the same way as supermarket multibuy type promotions,” the consultation paper said. “Therefore, we propose that we only target price promotions of pre-packaged HFSS products in the retail and out of home sector.”

The DH claimed there is strong public demand for action to restrict promotions of HFSS products, citing a recent nationwide survey from Ipsos Mori where more than 90% of respondents believed that HFSS foods at checkouts contribute to obesity. It also showed 78% of shoppers said they found junk food at checkouts ‘annoying’ and 83% of them had been pressured by children to buy food at checkouts, with 75% giving in and buying something through ‘pester power.’

Breaking bulk buying

The new rules would only apply to deals that promote HFSS food and drinks that are most often consumed by children, while retailers would still be able offer discounts for individual sales of HFSS items, according to the proposal.

The DH said the rules would apply to products covered by the sugar tax and PHE’s voluntary reformulation programme on sugar and calories. On the sugar side, it would cover items like soft drinks, breakfast cereals, yoghurts, biscuits, cakes, confectionery, morning goods (e.g. pastries), puddings, ice cream, sweet spreads, fruit-based drinks and milk-based drinks with added sugar.

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In terms of calories, the DH identified ready meals, pizzas, meat products, savoury snack products, sauces and dressings, prepared sandwiches and composite salads as targets.

It is considering two ways to implement the price restrictions: either as an all in approach where volume-based price promotions could only be on healthier products, or a scenario where at least 80% of a retailer’s sales per year should be on non-HFSS products.

“All too often we hear people say less healthy foods are cheaper and easier, but that is simply not the case,” public health minister Steve Brine said on the consultation. “This is about ensuring businesses are doing their part to shift the balance and help children and families eat healthier options like fruit and vegetables.”

Stifling innovation

But the announcement has attracted scathing criticism from industry bodies.

Tim Rycroft, Food and Drink Federation’s chief operating officer, said the timing of the consultation was grossly insensitive and a monumental distraction when so many food businesses were looking into the abyss of a no-deal Brexit, adding the Government should wait until this uncertainty is resolved.

“What’s more, this proposed plan is both wrong-headed and muddled.  A promotions ban would make shopping more expensive and reduce choice. Shoppers love the UK’s, vibrant, good-value, innovative food and drink market, and promotions underpin that,” he said. 

“They allow new products and brands to win space on supermarket shelves and help new products to get shoppers’ attention. Limiting the effectiveness of these mechanisms would stifle innovation and lock in the positions of dominant brands.  It would make it harder for challenger brands and start-ups to break into the market.”

Promotions also play a big role in making food more affordable, claimed Rycroft. “Government data shows that, on average, people would have to spend £634 a year more for the same food if promotions were banned,” he commented.

Rycroft added that the food industry had worked hard to address the UK’s obesity challenge with products reformulated to reduce sugar, calories, fat and salt and portion sizes were limited. 

“Preventing companies from promoting these reformulated, healthier options to consumers would be mad, but that’s what the Government wants to do.  This is a bizarre and contradictory public health policy,” he said.

UK Hospitality chief executive Kate Nicholls also criticised the consultation’s timing and said the sector continues to take decisive, proactive action when it comes to health. “Price promotions in the out-of-home sector are designed to provide good value to hard-pressed consumers, which our members do on a daily basis, allowing people the opportunity to treat themselves when dining out,” she said.

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