Oral evidence: Childhood Obesity Strategy, HC 465Tuesday 13 October 2015

Oral evidence, 13 October 2015.

Witnesses

Andrew Opie, Director of Food and Sustainability, British Retail Consortium, Ian Wright, Director General, Food and Drink Federation, and Chris Snowdon, Director of Lifestyle Economics, Institute for Economic Affairs, gave evidence.

Chair

I am going to start fairly promptly because we have Health Questions at 11.30 am, so I am keen to get through as much as we possibly can. As with the previous panel, could you introduce yourselves, say who you represent and also set out any personal conflicts of interest or interests through your organisations, starting with you, Mr Opie?

Andrew Opie

Hello, I am Andrew Opie. I am the director of food and sustainability at the British Retail Consortium. We are the UK trade association for retailers. In terms of any personal issues or conflicts, I do not have any, but I did sit on the plenary group of the public health responsibility deal on behalf of the BRC for the five years that it ran.

Ian Wright

Good morning. I am Ian Wright. I am the director general of the Food and Drink Federation, a job I have only held for six months. The Food and Drink Federation represents food and soft drink manufacturers across the UK, from big companies like Nestlé and Coke down to very small one or two‑person companies. We do not represent beverage alcohol, although I used to be the corporate affairs director of Diageo. If we get into the beverage alcohol space in this discussion, I should declare that I remain a shareholder and a pensioner of Diageo. I should also say that we do not represent either farmers or retailers.

Chris Snowdon

I am Christopher Snowdon, director of lifestyle economics at the Institute of Economic Affairs. I write about paternalistic regulation and its consequences on the issue of food. I have no conflicts of interest that I know of.

Chair

Can you set out for the Institute of Economic Affairs whether they have any funding from the food and drink industry?

Chris Snowdon

I do not know all the donors, but not as far as I am aware.

Chair

Not as far as you are aware, thank you.

Paula Sherriff

Good morning, and thank you for joining us today. You will no doubt be familiar with the recommendations from the SACN. Can you explain your response about sugar, and their advice to focus specifically on reducing the consumption of sugar‑sweetened beverages? Who would like to take that?

Andrew Opie

I am happy to start. We took great note of the SACN report when it came out, as did our customers, which is an interesting point to mention. There is growing awareness around the issue of sugar. It was an issue which members were already engaged in. I will put in a little bit of context about where we are in terms of our approach more generally to sugar and the obesity policy itself. We want an effective obesity strategy that delivers real change. We have been very active partners throughout the Food Standards Agency that we heard about before, and with the Department of Health. For us, that means building on things like reformulation and labelling, healthier choices, but with a greater focus on sugar, which we have certainly been looking at in the last few years. The SACN report is another stimulus to that, but just to put some context there, any effective obesity strategy needs all partners to be playing their part, as well as the retailers. It needs at times an acceptance, which we have not seen before, that perhaps voluntary initiatives are not always the best way forward. For us, SACN is very important. We wait to see the response from Government in the obesity strategy, but for us and for our consumers it was further reinforcement of the need to focus on sugar.

Ian Wright

It was a pivotal report. We obviously contributed to it and to the redrafting of it over the year when it was in for consultation. Some of the discussion which has followed the report has not necessarily followed the lines or evidence that the report itself adduces. It talks a lot about sugar reduction but it also talks about the place of other nutrients in the obesity challenge. I do not think anybody in the food and drink industry takes the challenge of obesity—in particular childhood obesity—in any way other than completely seriously. We believe that it does, as Andrew said, need a multi‑layered, multi‑pronged approach. That includes calorie reduction, public education, and much better understanding of nutrition and diet by the public, and it also includes a need for much more focus on physical exercise. People need to be aware, and to pay attention to the information they are given, and if we need to give them the information in a different way we should. But at the heart of a successful strategy for combating obesity will be this multi‑pronged approach, including a real understanding of the need for calories in, calories out. We do not think, perhaps in slight contradiction to Andrew, that it is right to demonise one nutrient, though we do not in any way downplay the importance of sugar reduction as part of that overall strategy.

Chris Snowdon

I thought the SACN report was very good, and then right at the end it seemed to me that something had been crowbarred in about reducing sugar consumption to less than 5% of calories, which is what some of the anti‑sugar campaigners have been asking for for a while. The WHO could not really find any good evidence to support that as a strong recommendation. The rationale for doing it I thought was very puzzling. They basically said that it would be better if everybody consumed 100 fewer calories a day, and if you were to do that by reducing sugar that would mean you would have 5% rather than 10%. But they also said there was nothing specific about sugar. In other words, they could equally say it about any other source of calories. Moreover, it would not actually reduce the number of calories you were consuming. It was just saying you should consume 5% of your calories from a different source, so it felt crowbarred in to me. Because the SACN report did not support most of the positions that the low‑carb, Atkins diet, anti‑sugar fraternity had been spouting for the last couple of years, I wonder why they inserted it, but it did not seem to me to be specifically about sugar; you could have said it about any source of calories.

Paula Sherriff

Thank you. Can you explain to us what you mean when you suggest that the focus should now be on “getting the entire food industry to adopt retailers’ positive approach to reducing sugar in products,” and what should be done to make that happen?

Andrew Opie

There are many other food sellers out there as opposed to retailers, and you heard a lot in your previous session around salt reduction, which is a really good example of this. Retailers have led the way in salt reduction in the various phases that we have been through, but other companies have not necessarily followed the same way. The danger for retailers who are competing in a food market is that there can be some unfair competition, because, like it or not, sugar and salt carry taste and people’s taste-buds will adapt to that, and people may choose a product that is less healthy for them. We are saying, and making very clear, that if you go down the route of something like reformulation, which we have done in salt, you have to carry everyone with you, first of all to be effective as a policy, so that whichever outlet you go into you are getting the same kind of food or the same kind of reformulation; but also because in some ways some of the voluntary initiatives that many of our members have been engaged in have penalised them against other companies who have decided, because it is a voluntary initiative, not to play their part.

Chair

Do you think it should be mandated? Is that what you are suggesting?

Andrew Opie

We gave a critique around the responsibility deal, for example, in looking at voluntary initiatives. What we said to the Department of Health then was that if there is no proper engagement policy from the Department of Health to drive all companies into it, it will not be an effective policy. Therefore, you may need to look at other methods of driving this through. Depending on the evidence, regulation could possibly be one of the ways to do that. Our preference would be that companies would take up the progressive approach that we have seen among our members, but it is very clear, when you look at some of the reformulation that has happened across the piece, that if you look at comparable products, retailers have gone further than other companies. That leaves a question about how you achieve parity across all food outlets.

Chair

Do either of you wish to add anything?

Ian Wright

I would observe two things about what I have heard. One is if you look at the McKinsey report, which is the most constructive and wide‑ranging study of this globally, McKinsey put portion control and reformulation miles ahead of other mechanisms for tackling obesity—miles ahead. A focus on an approach that includes reformulation, portion control, public education and awareness of nutrition and diet—what I just said, I guess—is really important. We participated in the responsibility deal. Personally, I think it gets a bad rap. It has been an extremely effectively tool, particularly in the salt area. It has driven major change. We were doing reformulation before. Our top 30 companies have done literally hundreds of reformulations in the last 10 years. The key thing about those reformulations before the responsibility deal, and actually some of them during it, is that they are in line with consumer choice and consumer taste. It is important to remember that this is about consumers changing their behaviour. It is not about people telling them what to do. When consumers are told what to do by Government, or indeed by Andrew’s retailers, they sometimes react very badly, as in the recent example of Tesco removing Ribena from children’s lunch boxes, which provoked an absolute spasm of outrage from consumers and shoppers, who went somewhere else to buy it. You have to educate consumers and help them move in the right direction. I totally agree with Andrew’s point about what I would describe as progressive pressure and peer group pressure. That is very important.

Chair

We are going to come to James next on the issue around sugar tax.

Dr Davies

We have particularly considered the suggestion that there should be a 20 pence per litre tax on sugary drinks. What are your reasons for opposing this?

Chris Snowdon

There are so many. First, from the narrow point of view of trying to improve health, they do not work. The comparison is often made with cigarette taxes, where there clearly has been an effect from increasing the price of cigarettes, but we are talking orders of magnitude difference. The tax on a packet of cigarettes is round about 700%. If there was a 20% tax on cigarettes, it would mean they cost about £1.20 as opposed to £1 a pack, so we are talking of a vastly different rate of taxation. There is no doubt that if you taxed sugar at 700% you would see a drop in sugar consumption, of course, but we are not talking about that; that is not politically possible. In fact I do not think a 20% tax is politically possible, which is why there are so few of these kinds of taxes around the world; and where they are introduced they are introduced at such a low rate, as in America and France, that they are effectively stealth taxes, which is in reality what they are anyway. They will have some effect on the margins on consumption, which is the basic law of economics—if the price goes up you would expect demand to fall somewhat. The problem is that it would be so small you would probably struggle to measure it, and that has certainly been the case with the economic studies looking at these things where they have been tried; you can find a very small effect on consumption and no effect whatsoever on obesity and health outcomes. One of the reasons for that is that food is the first part of anybody’s household budget. About 11% of the household budget on average in Britain goes on food, and for the lowest earners, the bottom 20% of the income distribution, it is about 16%. If you bring in a sugar tax, maybe that will be 16.25%, maybe even 16.5%. Essentially, it is absorbed and you take it on the chin. Food prices go up and down and it does not make a great deal of difference. People put in their shopping baskets what they want to put in. You also have a lot of scope for down‑trading to cheaper brands. There is a huge premium on the most famous fizzy drink brands, but you can get a very similar product for a fraction of the price if you are prepared to buy Tesco’s own brand and what have you. The economic objection to it is that it is inflationary, which is what you saw in Denmark with the fat tax; you saw inflation as a natural result of raising the price of a lot of products. It is bureaucratic, depending on how you do it, but if you were just to tax the amount of sugar in food it would be incredibly bureaucratic: you would have to work out the final amount of sugar in every cooked food product. And it is regressive. It does have an impact on people. As I say, most people do not change their shopping behaviour as a result of it, they just take the hit; it is a dead‑weight cost and it affects the poor most harshly.

Ian Wright

You will not be surprised to know that I agree with much of what Chris has just said—no news there—but the key fact is that they just do not work. If you look again at McKinsey, which is the best evidence‑based study there is, McKinsey says that a sugar tax is 10 times less effective than portion control and eight times less effective than reformulation. It is way down the list on the menu of effective mechanisms. It also clearly has not made major changes to demand anywhere it has been tried. Before we go on to Mexico, there are a lot of question marks; the jury is out on Mexico. The evidence is not reliable and the Mexican example really is incomparable, because, for a start, the country has very little clean drinking water outside Mexico City. I think the other key point, as Chris said, is that it is regressive. This is not a mechanism that would take us in the direction that we want to go, which is tackling obesity. It simply is not the right mechanism to tackle the problem.

Andrew Opie

Actually, we are neutral on sugar tax; we are neither for nor against. We have said quite clearly that the decision is for Government to take, based on the evidence, if it feels it is an effective intervention, but obviously it would look at the potential impact of a sugar tax. The only thing that our members would say is that it would need to be very carefully drafted. For example, fruit juices, which can contribute, obviously, vitamins and minerals to the diet, could be impacted, and if you go back to the SACN report that we spoke of earlier, fruit juices are counted as free sugars in terms of that percentage reduction. We would need to see first of all the evidence to show that it was effective, but secondly, that it was proportionate and targeted properly.

Dr Davies

If we talk about the tax being regressive—the allegation that that is the case—would you not say that in actual fact, because it is those on low incomes who are most affected by the prospect of such a tax and the levels of obesity among those groups are the highest, the payback in terms of health outcomes would, on balance, be worth it?

Chris Snowdon

That is not what regressive means. Regressive has a very clear economic definition. It means you take more income from the poor than from the rich. I know sometimes people make this argument with tobacco as well. The reality is, as I say, that it does not change people’s behaviour on any significant level. The 20% tax, I believe, is going to raise £1 billion. That means it is going to take £1 billion out of people’s pockets. It is going to take it disproportionally from the poor. It is going to have very little effect, if any, on consumption, let alone health outcomes, and even if it did have an effect on health outcomes for the people who suddenly decided, “Right, I’m going to stop eating sugar,” it would not stop it being regressive.

Dr Davies

Okay. If we look at the business interests of companies that would be affected, have you come to any estimates as to how such a tax might impact on those businesses?

Ian Wright

Do you mean do we know how much it would cost us?

Dr Davies

Yes, and is it going to lead to job losses or problems with economic growth, any factors such as that?

Ian Wright

Anything that is an intervention that increases the price of a product tends to promote brand switching. As Chris said, you would tend to see people switch out of recognisable brands into lower‑cost brands and possibly into other sectors, because what happens is that people go somewhere to get the thing they crave. The chances are that products produced by branded companies would undoubtedly suffer in some way, and there is bound to be some level of job losses. Mine is an industry which employs 400,000 people simply in the manufacture of food and drink, not counting the supply chain, the farmers or the upstream, so there is bound to be some impact. The other impact that is important is on investment. This country is regarded as a great place to invest money. If we start introducing all sorts of different restrictions, whether it is tax or advertising bans—I am sure we are going to come on to that—this country becomes a less attractive place to invest, which you really do not want in a competition for investment. I can give you one example—I am afraid I am not allowed to tell you the company. One of my members was up for a £40 million enhancement investment in its plant and operation, and it was competing against a similar set of bids from Nigeria and Thailand. They believed they had secured the investment, and when the debate on sugar tax and advertising restrictions began to cook up, that investment was moved and is now being made in Nigeria. I know of several other global companies who are very nervous. One of the things that is important to explain to the Committee is that a lot of the branded food products in this country are produced by global or international companies. They can choose where to put their money, where to create jobs and where they create wealth. If the UK becomes an unattractive or a less attractive place to invest than elsewhere, that will be a significant result of the imposition of taxes and of regulation, and that is to be balanced against the health outcomes, if there are any.

Dr Davies

No one would deny that obesity is a real problem for this country; it is going to be a very tough nut to crack and we need a multi‑faceted approach. If the drinks industry is keen on avoiding a sugar tax, are there not other avenues it could explore, such as the fact that sugar‑free drinks are cheaper to produce and yet they are sold at the same price as sugary drinks? Should there not be a trial in terms of making sugar‑free drinks cheaper to purchase?

Ian Wright

Is that directed at me? You mean the soft drinks industry. Every time I hear drinks I think of my former employers—lovingly, but it is a long time ago now. There are interesting opportunities in that area. However, it is quite difficult for me to comment on that because you get into quite difficult competitive territory, and competition law about how different companies might manage their pricing structures. I am not sure there is massive evidence for this, but if what you are talking about is trialling different price points for products that are considered healthier or not, it is an interesting area. One fact that is absolutely clear is that consumer taste is moving to allow a wide range of choice. If you look at the current soft drinks statistics, two‑thirds of soft drinks sold in this country are low or no sugar, and that includes water. If you look at the experience of both Coke and Pepsi, it is fairly well known that two‑thirds of Pepsi products—this may not be exactly right—sold in this country are no or low sugar, and Coke are moving in the same direction. You have recently seen Coke for the first time sponsor a major event with one of its low or no‑sugar products—the world cup that is on at the moment. The companies are reacting to this, and the way they have reacted is to provide a huge range of choice. There has never been such choice in the soft drinks market as now, and that is driven by consumer demand.

Chris Snowdon

I would make the simple point that if the companies thought there was a big market for people buying diet drinks at 10p or 20p less than full fat drinks, one of them would go that way unilaterally: Pepsi Max would drop its price point to beat Diet Coke. The reason they do not do that is presumably that they do not think there is a big enough market. Price is not what changes things. You either like these drinks or you do not. If we are talking about reformulation, no industry has reformulated their products more than the soft drinks fizzy drink market. They have been doing it for 50 years, but you cannot force people to consume these products. In the Coke range, for example, there are, I think, four different varieties. Only one of them is full sugar. One of them is half sugar and the other two have no sugar whatsoever. They are all advertised just as much, if not more, than red Coke. They are all on the same shelves and they are all the same price. If people are not buying them, it is because they do not want them. You cannot force people to buy things they do not want to consume.

Chair

But the question specifically was is there evidence that if you have a price differential it helps to guide people to make healthier choices? That was the specific question.

Ian Wright

The answer is that you cannot do that in isolation from all the rest of the stuff that is going on. That is the problem. They will not simply buy a healthier option if it is cheaper.

Chris Snowdon

Water comes out of the tap for free, and vegetables and fruit are actually cheaper than ready meals.

Dr Whitford

You have mentioned the idea of reformulation, which in a way would be the long‑term goal. We know that both sugar and salt engender the craving for those—the phrase that you use—so what is your view of how we could move towards reformulation, if that is the end goal?

Ian Wright

We have moved very much in the direction of reformulation, as I said at the start. If you look at the largest 30 members of my federation, there are literally hundreds—maybe thousands—of reformulations over the last five or 10 years. Those reformulations have all been in the direction of lower or low sugar or lower or low salt, but there are some products you cannot reformulate. Mars tried to sell a no‑sugar chocolate bar a few years ago—no sales.

Dr Whitford

At the moment obviously we are focusing on the drinks where reformulation—

Ian Wright

Are we? Sorry.

Dr Whitford

That is predominantly what we would be talking about, sugary drinks, where reformulation is quite easy. It has worked very well with salt. The public have barely noticed that year on year the salt has been reduced. Do you not feel that such an approach would work for sugar?

Ian Wright

In terms of soft drinks?

Dr Whitford

Yes, it is easier.

Ian Wright

Just bear in mind that if you added together biscuits, cakes and confectionery as a source of sugar in the diet, they would be just about the same as soft drinks. People get their sugar from a number of different sources.

Dr Whitford

But it is still the biggest single source for children.

Ian Wright

Yes, it is the biggest single source for the population. They have reformulated again and again, and they continue to reformulate. My earlier point is the key one: they have to reformulate in line with consumer demand, because if you produce a drink that people do not like, as Chris said, they will not buy it.

Dr Whitford

But do you not feel that if you are doing it in a sequential fashion, as has been done with salt, then in actual fact people’s sugar tastes reformulate within literally a couple of months? People adapt.

Ian Wright

I am not a scientist, evidently, but I do not think it is as clear that people’s tastes reset quite as quickly with sugar, but it is also true that there are other sources. If I may just give one example of unintended consequences—my colleagues may be groaning here because I am not supposed to say this, but anyway—in the bread industry there is some evidence that some brands taking salt out have been replaced by artisan breads which are loaded up with salt. People move away from brands where they know there is no salt to brands where there is, and the same thing may well happen with sugar.

Andrew Opie

From our perspective, I agree with Ian that it is more than just soft drinks. Our members have tended to concentrate on the 10 biggest categories within the NDNS—the dietary survey—to try and focus. But clearly on soft drinks, as Ian says, our members have been doing the same and demonstrating that through the calorie‑reduction pledges in the responsibility deal in terms of reformulation of soft drinks. I think there is and has been a lot of progress. Certainly some of our members would be happy at least to have a discussion around targets—it is not universal at the moment—but that comes with certain caveats that we have already spoken about. You need to take everybody with you to be effective, otherwise you are penalised for in fact doing the right thing, and targets may have a role. The other thing about targets—we saw this with salt as well—is that not everybody is starting at the same place. We heard from one of the previous speakers that a simple percentage reduction might not be the right approach, for example, because you may have some people who are at a different place. Absolute targets, for example, might be a better way.

Dr Whitford

But you would accept a target as levelling the playing field across—

Andrew Opie

Some of our members definitely have indicated that they would be happy to have a discussion, but it is within that caveat—we are very keen to stress this point—that whereas we have been very progressive in our approach to voluntary initiatives, in such a competitive market, as we have at the moment, we have to have something that demonstrates full participation, otherwise companies that participate are penalised.

Dr Whitford

One of the issues is obviously that public health workers expend a lot of energy trying to get people to not take high sugar foods and high sugar drinks, and therefore I would have thought it was in the industry’s interest to not end up being seen as the pariah of food and drink. Therefore, reformulation would be in their interests.

Ian Wright

Absolutely. You cannot imagine the level of angst among my members at the positioning that some campaigners have accorded to us. There is real outrage about that in the sense that we feel we have been highly responsible; we are a major part of the British economy and we employ 400,000 people. How do you think the 400,000 people who work for food and drink manufacturers feel when they are demonised by some of these campaigners? They feel outraged, very cross and entirely traduced. So, yes, there is real concern about that, but also there is a feeling that this is not fair, that the evidence does not bear this out. The other thing is that we have absolutely no interest in unhealthy consumers, because unhealthy consumers are not economically active and will not be able to have the money to buy the products that we sell, and since a lot of our products are branded products and some of them are premium products, that effect is compounded. We have no interest in unhealthy consumers. We are all members of society. All of my members are responsible companies led by people who have families just as much as all of us here.

Dr Whitford

So it should be possible to find common ground to move forward.

Ian Wright

Absolutely. At the appropriate point, as an industry, I am sure we will be coming forward with commitments on calorie reduction and with further commitments on portion size. We will be looking also at how we can contribute to education and behavioural change. The key issue is behavioural change among both consumers and shoppers, and it is quite important, incidentally, to make that distinction.

Dr Whitford

Can I pick up on that because a lot of our behaviour is driven by advertising? Do you feel that stricter regulations are required on advertising, whether it is broadcast or other?

Chris Snowdon

Behaviour is not driven by advertising.

Dr Whitford

Then why do companies spend billions on advertising if it has no effect?

Chris Snowdon

To compete for market share. You are giggling at that but the economic evidence is very clear: that is exactly what advertising does. If it does not, why do companies advertise pet food, why do they advertise toilet paper, why do they advertise so many necessities if it is to try and grow overall aggregate demand? They are competing for market share. The only exception to that is if you have a brand new product category, so when iPads came out, for example, advertising tablets implicitly advertised iPads and all their rivals. I know public health people say the exact opposite of that, but they often say the exact opposite of where the evidence is pointing. Advertising cannot be coercive. It very rarely, at least, can lead to any kind of behavioural change. Government campaigns explicitly try to make people change their behaviour and they do not do a very good job of it. That is when they are going out of their way directly telling people “Do this”, “Go out and vote”, “Lose some weight”, “Exercise.”

Dr Whitford

That is not how advertising works. It is much more suggestive, seductive and glamorous than public health advertising. I would suggest that advertising is more than just market share. It does encourage—

Chris Snowdon

You can suggest it, but there is huge academic literature on this. One of the reasons that economists tend not to pay a lot of attention to advertising any more is that there is not anything to learn about it. It does not do anything other than distribute revenue from one company to another.

Dr Whitford

Can I ask, Mr Wright and Mr Opie, do you feel that there should be any change in the regulation of broadcast advertising?

Ian Wright

On broadcasting, no, I do not, but I would say two things. Certainly from the point of view of somebody who has worked both in the consumer goods industry, both previously for Diageo and before that for Boots the chemist, I have a 25‑year career in consumer goods, and the evidence actually, as Chris says, is that most advertising is about brand and product switching, not about bringing people into the category or sector to start with. That is how the dynamic of advertising works. As an industry and as consumer goods companies generally, we have already started down the route of changing the voluntary code. One thing my colleagues from the advertising association, who manage this stuff for the UK’s businesses, would say is that we have the strongest and most well‑regarded code of voluntary and self‑regulatory advertising and marketing in the world. Other countries and Governments come and copy our codes for that purpose. Moving in the direction of more regulation, more Government intervention would be a backward step, in our view, but we also believe that responsible companies have to constantly review the regulations. The last time that Ofcom reviewed regulations in terms of broadcast advertising they found no need to change. Since then there has been the rise of what are called advergames and a whole range of new online stuff. As a consequence of that, you will have seen, I hope, that the Committee of Advertising Practice which governs this for the industry are in the middle of a consultation which would move to a point where there would be no advertising of HFSS foods in the UK to anyone under 16. That is a self‑driven, responsible move, and I believe that it is one that will go through. I think the consultation will prove positive. That is an example of us moving in the direction of responsibility. I do not think moving into any other regulations would be sensible. I am sure you are going to talk about the 9 o’clock watershed, so let me pre-empt you. That would be an analogue answer to a digital problem. Kids just do not watch television like we used to. They do not sit there and watch it with their families predominantly.

Dr Whitford

Do you not think they watch particular ones, “X Factor” and so on?

Ian Wright

I thought you might ask me about “X Factor”. Shall I tell you what they advertise? Last Saturday, the products which were advertised in the breaks on “X Factor” were Ritz Crackers twice, the Lidl coffee test, the Milk Tray man, which is definitely not for kids, Walkers crisps and Gary Lineker, Chicago pizza, Iceland, and Dairy Milk bars, which are products clearly targeted at adults, Pepsi Max, UEFA cup tickets, the Milk Tray man again and Twinings tea. That is hardly a carnival of children’s advertising. The audience is not indexed like that. It is a kind of common misperception. I am sorry, I have gone on.

Chair

Is the consultation that you referred to calling for an end to all advergames?

Ian Wright

No. It is calling for an end to them being targeted at 16‑year‑olds or under, because adults play advergames just as much as everybody else, apparently.

Chair

Yes, but you are saying that on all sites that are attractive to children there would be removal of advergames.

Ian Wright

They would be subject to the same rules and responsibilities that all broadcast advertising is at the moment, so 16‑year‑olds would not be targeted. It may well be that some of the provisions of that mean that there has to be more age gating, as it is called, so you have to say that you are over a particular age, but these codes are very strictly enforced by the Advertising Standards Authority. If people have concern about these things, they will be able to refer to the Advertising Standards Authority.

Chair

Quite a lot of the evidence we have received expressed concern about the strength of the ASA in enforcing some of the rules. Is that something that you feel is incorrect?

Ian Wright

I think if you are on the other end of an ASA warning, you feel pretty warned. That is a matter really for the advertising association, but I am sure if you want to strengthen the powers of the Advertising Standards Authority that is not something that we, as an industry, would be anything particularly other than supportive about.

Chair

Certainly we have a deal of evidence on this, but unfortunately, as time is short because we have Health Questions today, I am going to move on to Andrea and the retail environment.

Andrea Jenkyns

As I explained to the other group, I have had 20 years in retail, so I have been on the other side, including food retail. Do you think there is any more that retailers can do to promote a healthy way of life, such as not promoting add‑on sales? I am sure we have all been to a newsagents, quite a well‑known one, where they offer you a bar of the chocolate for buying a newspaper, and also at checkouts with add‑ons of sweets and chocolate. Do you think there is more that retailers could do to stop focusing on sweets and stuff like that at checkouts?

Andrew Opie

You will know from your experience that promotions in retail have changed enormously over 20 years, and in the last couple of years they have changed quite a lot as well. If you look across the board, so if I stick with the supermarket for a minute—though I take your point about the newsagent—you could have anywhere up to a third of the products on promotion, although the drive these days is more to everyday low pricing across the board rather than necessarily a one‑off promotion. That will cover a huge range of products, everything from the fruit and vegetables when you go in to the high fat sugar products. We do promote those—we make no bones about it—but basically retailers are generally selling a weekly shop for people. I know it sounds traditional now because people go to convenience stores a lot more than they did, but basically, that is it, and those products can be consumed as part of a healthy diet.

Andrea Jenkyns

What about placement at checkouts, because it is predominantly sweets and chocolates?

Andrew Opie

Yes. You will probably also know that many retailers have moved away from that, but that is really based on their own customers asking them to do it, working with their customers for the right environment. Whether that has a huge impact on obesity or not, I would probably say it does not, but it is a totemic issue for some of the NGOs, and we understand that. But that was again all driven by customers. That is what their customers wanted for their experience when they went in there, and that is what they reacted to. When it comes to promotions, this is a hugely competitive market driven by customers, but if I look at the promotions in my typical supermarket or the way that the products are sold, it is perfectly possible to eat a very well‑balanced, healthy diet, and in fact some of the products we are selling at the moment, like fruit and vegetables, have never been cheaper in real terms than today.

Andrea Jenkyns

You do not always see those kinds of products on the ends of aisles, though, which is quite a key area to sell on.

Andrew Opie

No, but they are still promoted through the store and they are available to people. Yes, we promote high‑fat sugar products alongside others; we make no bones about it. The other difference from other forms of marketing may be what are we classifying as a good or a bad food? If you look at it, strictly speaking, cheese and some other products would fall into HFSS products, for example—

Andrea Jenkyns

And certain bakery products as well.

Andrew Opie

Certain bakery products and lots of produce like bacon and these sorts of areas would. All I am saying is that it is not a simplistic position to go into a supermarket and look at promotion and marketing. Health remains a really key and growing factor for every consumer when they go into a store and that is definitely influencing the retailer’s approach. In a competitive market, if a retailer does not satisfy consumer expectation at the moment, they can either go down the road or order online. There is complete competition, and all retailers know they have to have the correct balance of products on sale in the right parts of the store if they are going to be successful.

Andrea Jenkyns

I understand that wholeheartedly having been in that industry. Do you think there is more that those who work in retail can do regarding having the knowledge and education to advise in a better way?

Andrew Opie

Yes. There are two ways. First of all, some of the consumer magazines that the retailers have are the biggest health magazines and consumer magazines distributed in the UK. They use those extensively to try and help people cook from scratch, for example, and the recipes will have traffic‑light labelling as well to try and do it, but also, as Ian explained, we employ I think about one and a half million people around the UK. There is huge information that goes from our companies to their employees, to their families and their communities about eating healthily. We recognise that there is a lot we can do to try to influence consumer behaviour.

Andrea Jenkyns

Could you give an example of what that could be, in a positive way?

Andrew Opie

Going forward, one of the issues that has been quite interesting, which we have not been able to do thus far, is to target more into the poorer socio‑economic communities, for example. I think we heard from an earlier speaker—I know there are figures, if you look at the public health observatories, for childhood obesity—that one of the areas that has not levelled off yet is in lower socio‑economic groups. There could be an opportunity for retailers to do more in that space. It is harder to flex, as you will understand—they are UK‑based companies rather than necessarily communities—but that is a possible area where we could see more action going forward.

Andrea Jenkyns

Thank you very much. Can I speak to the other two as well? What are your views on that? Can retailers do more?

Chris Snowdon

It is up to them. I do not care. I do not think it matters. It has a very trivial effect. It is not for the Government to be telling retailers what part of their shop they should be putting their products in. Retailers, as with manufacturers if they are producing something that people want to buy, have entirely the high moral ground as far as I am concerned, and anybody who is trying to get in the way or obstruct that or punish the consumer has no morals at all. You have Government intervention when the market has failed. Where has the market failed in the food supply? You have enormous amounts of competition, historic low prices of every food and drink you can think of, and negative externalities are few, if any. The only area I can see is that possibly people could be better informed. That is always the case. The whole area of nutrition is complex; you are getting different messages sent out at you all the time. Since the formation of Action on Sugar you have had total misinformation almost on a daily basis. People do not know where they stand on this. I think there is room—we are going slightly off topic—for better, more straightforward labelling telling you what is in the product, not what is in some arbitrary portion size or in 100 grams of the product. I bought some crisps yesterday, for example, and it gave me the nutritional content for 100 grams when there are only 40 grams in the packet. I do not think you should have to be Carol Vorderman to work out what is in the product you are buying. But aside from information failures, which could be dealt with at school, seeing this is meant to be about childhood obesity and we have mentioned schools, the market is working fine and the Government can only make things worse by intervening.

Ian Wright

I am conscious that there are only 90 seconds left before the bell. The only way we are going to solve childhood obesity problems in this country is through a partnership. That is a partnership between the manufacturers, the retailers, Government, GPs, the medical system and, crucially, as Chris says, the schools, with much better information. We have to play our part in that, but in the end this will be driven by consumers and shoppers making different choices, so we have to find not the interventions that are traditional; we have to find behavioural change interventions.

Chair

We have one quick question as well from Maggie before we go.

Maggie Throup

The point about labelling has just been touched on in the last couple of minutes, and I think there is a bit of a difference of opinion. Can I ask Mr Snowdon this? The IEA said that the traffic‑light system of labelling is unhelpful. You alluded to it a bit. Do you want to expand a bit on that?

Chris Snowdon

It is a bit complex because of the way it is done. It is done in a rather arbitrary way, which means that a huge number of foods are going to be high in one or the other. It is okay if you are comparing two products from different manufacturers, so you can see that, okay, this lasagna has less fat than the other one, but in terms of working out what your diet is going to be across the course of the day it is not very helpful at all, because it basically tells you how many grams are in 100 grams of something without factoring how many grams are in the entire product. It is not very useful and it makes things like cheese, which is a pretty good source of protein, look like an unhealthy product.

Maggie Throup

Just to expand that, obviously the UK led the way in the traffic‑light system, but there are still some manufacturers and retailers that do not use it. Do you know how many and why and what else can be done, because it is about information, is it not?

Ian Wright

I can tell you why. I do not know the number, but I think six out of 10 of our major members do it, and nine out of 10 of those use front‑of‑pack labelling, which is also voluntary. The problem with traffic lights for a lot of manufacturers is that if you are manufacturing from here for the whole of Europe, it is extremely costly to change at the point when you stop manufacturing for the UK, because European countries do not have red, green and amber traffic lights.

Maggie Throup

Should they have it?

Ian Wright

No. The countries would not understand it, because they do not have amber traffic lights. The actual everyday thing does not mean anything to them; you would have to have just red and green.

Andrew Opie

We have very good penetration. In fact we helped the Department of Health with the preparation of the UK front‑of‑pack labelling, and you will see it in all major retailers when you go in, and you can compare. Chris is right; it works most effectively where you are comparing categories. One of your previous speakers also made the good point that the category managers look at it when they are developing new products to try to keep some of the reds and ambers off the product if it is possible, so it has also helped drive reformulation as well as helping consumers themselves.

Chair

Thank you. Thank you for coming today. Because it is Health Questions we would become inquorate if any other members left, but thank you very much for coming today. Oral evidence: [Inquiry name], HC [XXX] 20