Industry under fire for what many see as undue influence over health policy
In the food fight between governments and the “big snack” sector, Ronald McDonald and Tony the Tiger appear to have won the latest round. As ambassadors for multinationals that sell fast food and sugary cereal, the duo boast powerful backers. So it was perhaps less than surprising that US regulators this month retreated from proposals to ban the advertising of less healthy foods to children in a drive to combat ballooning rates of obesity.
Five years after the ranks of the obese overtook the number of malnourished in the world, numerous governments are acting to tackle a problem that is taking its toll on public health, healthcare budgets and workplace productivity alike. The global bill for type 2 diabetes alone, a condition brought on largely by being overweight, will on some estimates approach an annual $500bn by 2030.
That has sparked a debate over the role played by the food and drinks industry in setting the policy agenda. Critics charge that manufacturers of products that many see as contributing to the obesity epidemic increasingly wield undue influence over governments and social policymaking through their lobbying dollars. For its part, the industry argues that it is working in partnership on the issue and that self-regulation will prove more effective than measures, such as taxes and advertising restrictions, which it says will have costs that struggling households can ill-afford.
But can an industry that is seen as a big part of the problem also be part of the solution? The question was highlighted in New York last month at a UN summit on non-communicable diseases, many of which are caused by obesity. A decision to place business interests and advocacy groups under the same “civil society” banner irked non-governmental organisations that believe food and beverage companies should not be involved in setting policy but be brought into the process only at the implementation stage. For some, the omission of targets from the final document was taken as evidence of effective industry lobbying.
Speed read
Weighty question Can an industry seen as part of the problem also be part of the solution? The question was highlighted at last month’s UN summit on non-communicable diseases, many of which are caused by obesity. Some saw the omission of targets from the final document as evidence of effective industry lobbying
Smoke free The industry is keen to distance itself from parallels with tobacco, citing a lack of precise proven correlation between its products and the growing global burden of cancer, diabetes and cardiovascular disease
New markets Manufacturer behaviour is hard to monitor at global level – and fears remain that food producers simply dump their less healthy offerings on poorer countries with weaker regulations
“The reason we are particularly anxious they should not be there at the policy formulation stage is some of the policies one wants to discuss are controls on the market,” says Tim Lobstein of the International Association for the Study of Obesity, funded in part by the European Commission and the World Health Organisation. “If industry is there it will be very vigorous in undermining this, because that’s what it doesn’t want.”
Foodmakers retort that they too have an interest in prolonging life. “We want consumers coming back to us in the long term, enjoying products that are good for their health, or we will lose them, from a purely business point of view,” says Derek Yach of PepsiCo, the US beverages and snacks maker. Some governments appear to buy this line. On the Responsibility Deal Food Network, Britain’s task force on the issue, business interests have more representatives – six out 12 – than any other group.
This blending of industry and advocacy groups led to the crumbling of a similar deal on alcohol – NGOs walked out after grumbling that spirits producers had seized control of policymaking – but food manufacturers are quick to insist their network is one of equals. “This is not a lovey group on behalf of industry. It’s a partnership we believe will move quicker and make more progress working together as a group,” says Fiona Dawson, president of Mars Chocolate UK and a member of the food network.
The structure chimes with the UK’s strategy of “nudging” citizens into correct habits rather than wielding a legislative stick. Academics such as Harvard University’s Edward Glaeser see this type of “soft paternalism” as an “emotional tax on behaviour, which yields no government revenues”. But Anne Milton, Britain’s public health minister, bristles at any suggestion of laxity. “I don’t think we are at the soft end on this. There are already quite a lot of regulations out there about food, particularly on advertising to children,” she says.
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Across the Atlantic, the industry fended off the recent move towards tougher rules by marshalling numbers, rhetoric and a dose of ridicule to keep airing advertisements to children over the age of 11. “Does anyone seriously believe that ‘voluntarily’ removing corporate icons such as Tony the Tiger or making ‘Snap, Crackle and Pop’ Public Enemy Number 1 or removing pictures of well-known athletes from cereal boxes would materially reduce childhood obesity?” wrote Daniel Jaffe of the Association of National Advertisers, a US marketing organisation, in congressional testimony.
There is, however, evidence to the contrary. After the UK government ordered curbs on advertising fatty, sugary and salty foods to children, children’s body mass index dropped, a report by the Organisation for Economic Co-operation and Development found. In the case of self-regulation, “the effects of the intervention were assumed to be half of those produced by formal regulatory measures, because of possibly looser limitations self-imposed on advertising and a less than universal compliance to the voluntary arrangements,” the Paris think-tank concluded.
Yet industry has a back-up answer to that one too: shackle us with restrictions and you choke off jobs. The more successful curbs on advertising are, “the greater will be the economic damage to jobs and numerous businesses”, wrote Mr Jaffe.
For Rhona Applebaum, chief regulatory officer of Coca-Cola, taxes conjure up pictures of a Big Brother state. “It’s almost a rat in a cage model, where they are giving us the food and taking our choice away. We’re not going to control all human behaviour, nor should we strive to. If you give people the information, 99 per cent of the time they’re going to make the right decision.”
‘Fat tax’ milks the Danes
Denmark is not the only country to combat obesity with fiscal levers – Hungary recently brought in a tax targeting soft drinks and snacks; France too is planning a levy on soft drinks, write Louise Lucas and Clare MacCarthy. But when Copenhagen imposed the world’s first “fat tax” this month, it highlighted something of an anomaly.
For as well as its famed buttery pastries, Denmark also produces relatively slim people. About 13 per cent of the population was classed as obese last year by the Organisation for Economic Co-operation and Development, lower than the European average. The goal, according to the previous government, which introduced the levy, was to raise life expectancy.
The tax – DKr16 ($2.98) per kilogramme of saturated fat in a product – will increase the price of a burger by about $0.15 and that of a pack of butter by about $0.50.
Critics contend that the levy is complicated and costly to calculate, and harms business. With suppliers refusing to issue details on ingredients, some stockists have dropped speciality products such as Tuscan salami. Swedish supermarkets have reported a run on butter as Danish shoppers cross the border seeking cheaper fare. And the Danish bakers’ guild has complained to the European Union that the levy skews competitiveness: Danish-made deep-fried Christmas cookies are levied on the oil used to cook them, including the fat that remains in the vat. The charge on their German-made equivalents covers only the fat content of the finished product.Officials counter that calculating the fat content of most dairy products and oils is “administratively relatively simple”. Government guidelines, however, show the process can be arcane: fat levels in sunflower seeds from a south-facing Spanish field can be different from those grown in Germany. The milk of cattle fed on fresh grass all summer will differ from the output of those fed on hay.
Despite generating an expected DKr550m in extra public revenues this year, the surcharge could soon be overhauled: the new centre-left government is considering changes in response to business and consumer protests. Christian Bitz, Denmark’s favourite television nutritionist, offers an attractively simple alternative – why not just drop value added tax on healthy food such as fruit and vegetables instead?
Persuading the authorities to make their own “right decision” is a process on which her company and its rivals, meanwhile, lavish both attention and cash. According to the Center for Science in the Public Interest, a US consumer advocacy group, Coca-Cola has spent nearly $25m on government lobbying in the past six years, and PepsiCo close to $19m. Both complain about being unfairly targeted as culprits of obesity, while acknowledging that their products should be used in moderation and not marketed aggressively towards children.
Above all, the industry is keen to distance itself from parallels with tobacco. Its arguments include the lack of a precise proven correlation between its products and the growing global burden of cancer, diabetes and cardiovascular disease; and the fact that, unlike tobacco, moderate consumption of food and drink is not only harmless but also necessary.
“It’s a fundamental mistake to think you can apply tobacco policy to food policy. Tobacco policy worked because every type of tobacco can be taxed. We have no idea if people will switch to other beverages with higher calorie content if sodas are taxed,” says Pepsi’s Mr Yach.
Lobbying is not the only weapon in companies’ arsenal. Producers are themselves removing fats, sugars and salt by the truckload. Nestlé, the world’s biggest food producer by sales, recites the tens of thousands of tonnes of bad fats, salt and sugar it has cut from its output worldwide. Kraft, a main competitor, has set a goal of reducing sodium by an average of 10 per cent across its North American portfolio by next year and has reformulated about one-quarter of its products in the US since 2005.
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Even these moves raise cavils, however. For one, cautions the obesity association’s Mr Lobstein, the small print does not always bear out the headlines. He cites PepsiCo’s pledge to reduce the average sugar level in its drinks. It can do this, he says, while keeping sugar amounts constant – just so long as it sells even more cans of low- or zero-calorie drinks.
Second, voluntary pledges can be overturned on a whim. Campbell Soups did just this when it announced last July – in a statement to investors headed “Campbell continues to provide consumers with an array of lower-sodium choices” – that it would be “improving the taste” of 31 soups with “a variety of flavours and seasonings, including increased salt”.
Third, manufacturer behaviour is difficult to monitor effectively at global level – and the fear remains that food producers “do a tobacco” and simply bump their less healthy offerings into poorer countries with weaker regulations. There they are free to use tactics, such as advertising targeted at children, that are no longer acceptable in the west.In China, which has seen the biggest growth in diabetes in both percentage terms and absolute numbers – 92m have the condition and another 140m are on track to acquire it, according to the International Diabetes Federation – the debate shaping a public agenda on obesity is just beginning. India trails even further behind.
Beyond China and India are a long list of smaller countries that are no match for the might of business: 60 per cent of the world’s nations have an economic output lower than the annual turnover of the top five food and beverage companies, according to one academic’s calculations.
It is in these countries too that particularly questionable tactics for marketing to children are in evidence. Consumers International, a UK-based watchdog, points to Kentucky Fried Chicken’s Chicky Club in Malaysia, the biggest children’s membership organisation in the country, which offers discounts on unhealthy products directly to children. In the Philippines, Nestlé’s “fuel for school” television commercial alludes to increased academic performance from eating its high-sugar Koko Krunch cereal.
Nestlé says the advertisement merely “communicates that eating breakfast is a good start to help children perform well at school”.The OECD finds counter-productive effects from the preponderance of food companies that help to run health education and exercise initiatives, such as Coca-Cola’s and Kraft’s after-school health and wellness programmes for pupils. “These initiatives likely contribute to brand loyalty and may even increase consumption of the products of the sponsoring firms by those who are exposed to them,” says the report.
For the industry, this is all part of its well-meant efforts. But as the survival of Ronald McDonald and Tony the Kellogg tiger suggests, the common ground only goes so far – perhaps just so far as agreeing that no one wants to be fat.
For some, those extra layers of blubber are the profits of the food and drink industry made flesh. Others demur. Says Michael Silverstein of Boston Consulting Group: “It’s not the food industry’s fault. It’s the human condition.”
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