The global beverage industry stands to lose nearly £365bn in the value of its brands if plain packaging such as that used on tobacco products is extended to cover alcohol and sugary drinks, according to a new report.
The study by Brand Finance said the projected impact was almost 50% higher than a previous valuation it carried out in 2017, because of the growth of brand values.
Launched at the Food Ethics Council’s Food Policy on Trial event in London today (30 September), the report estimates the potential impact on brand value across the alcohol, confectionery, savoury snacks and sugary drinks sectors.
The report found alcoholic drinks producers including Heineken, AB InBev and Pernod Ricard would see 100% of their revenues exposed to legislation, jeopardising the current business model, if plain packaging was extended.
An extrapolation of the results to all major alcohol and sugary drinks brands pointed towards a potential loss of $430bn (£365bn) for the beverage industry globally, it found.
“Since we produced the first Brand Finance Plain Packaging report in 2017, a number of other countries have either implemented - or legislated for - plain packaging for tobacco products,” said David Haigh, CEO of Brand Finance.
“With health advisors labelling obesity ‘the new smoking’, it is not surprising there have been repeated calls for this type of legislation to be expanded into the food and drink sectors. It is obvious, however, that this would severely damage these companies’ business values.”
Haigh added: “However, the predicted loss of brand contribution to companies at risk is just the tip of the iceberg. Plain packaging would also lead to losses in the creative industries, including design and advertising services, which are heavily reliant on fmcg contracts.”