Eric Idle

Former health secretary Andrew Lansley had a phrase to describe the government’s approach to the food and drink industry: “Nudge wherever possible and nanny only when necessary.”

The philosophy - that voluntary regulation could secure more progress, more quickly, with less cost than legislation - has been the source of battles between lobbyists, politicians and the industry ever since.

From the climbdown over alcohol minimum pricing in favour of voluntary measures to tackle booze, to the culpability of the industry in the obesity crisis and commitments to slash food and packaging waste, ministers have largely allowed the industry to police itself, often in the face of strong criticism.

“Retailers have had to defend the credibility of pledges”

However, a new policy framework presented to the government this week by the British Retail Consortium suggests the voluntary solution is not working for retailers.

So why has an industry with an instinctive hatred of the nanny state suddenly gone cold on the nudge approach?

“The BRC has fully supported the government in its attempts to reduce the burden of regulation and to ensure regulation is practical, proportionate and ­targeted,” says BRC director general Helen Dickinson. “These include goals related to the environment and sustainability, public health, employment and skills, pricing, trading policy, and social policy.” 

But she points to growing concern that there has been “no overall approach” by the government, which lacks an evidence base for many of its key proposals and has done little to monitor their progress. 

Dickinson warns that unless the government takes the criticisms on board it “may well find growing resistance to such agreements” from retailers.

The BRC’s call for a rethink follows a 100-page report it commissioned from Oxford-based researchers Dr Christopher Decker and Professor Christopher Hughes, which found most retailers think voluntary regulation under the coalition has lacked evaluation, failed to harness their knowledge and often been driven by “narrow-focused interest groups, without sufficient evidence or analysis”.

The most damning criticism is reserved for the government’s handling of the Public Health Responsibility Deal, launched by Lansley in March 2011. Despite more than 30 pledges (including eight on alcohol and seven on food) and more than 500 organisations signed up to various elements, the report says initial general support from retailers has turned into a widespread feeling that the initiative is being led by “the usual suspects”, while “free riders” not signed up were gaining a competitive advantage.

“The government was not strong enough in supporting its own initiative to the extent that retailers have had to defend the credibility of pledges against negative attacks from NGOs,” says the report. 

“The situation is amplified by the fact that to date there has been very little evaluation of the Deal, allowing those who were against the approach in the first place to criticise the approach and retailers on the basis that it is not effective.”

voluntary fails

  • Supermarket food pricing: Pressure for a voluntary code by the OFT and Which? described as an “attempt by regulators to impose definitive procedures beyond legal requirements”
  • EU supply chain voluntary initiative: Estimated to cost EU €200k a year to monitor. Costs firms up to €1m to sign up to
  • GSCOP: Described as a UK version of the above, and an “example of a voluntary code becoming non-voluntary under political pressure”
  • ASA code: Retailers frustrated by lack of governance and inconsistent judgements
  • Lead authority schemes: Floundered because local authorities had no compulsion to follow lead authority advice Source: BRC
  • The BRC’s new suggested framework calls for a six-point test, which it says should sit behind all voluntary regulation. This includes evidence of a real problem to be solved, clarity of the desired outcome, practical requirements for signatories, robust impact assessments and a monitoring and review mechanism. It also calls for a sunset clause, which would see deals that are not working wound up.

Calorie reduction

The report also accuses the government of “overestimating” what retailers can achieve, especially when it comes to one of the flagship pledges of the Deal, calorie reduction. 

“This concern was particularly noted in respect of the Deal where the retailing of smaller portion sizes was expected to encourage people to control their eating but where no evidence was provided to retailers as to whether the change would affect behaviour. For example, consumers may, in fact, be encouraged to purchase two portions, or fill up with other additional food,” it says.

Companies including Mars and Mondelez made pledges under the Deal on a voluntary 250 kcal cap on single-serve confectionery. Then in June this year, on the day the SACN committee delivered its call for the nation’s sugar intake recommendations to be slashed in half, the FDF announced that, after talks with health secretary Jeremy Hunt, all of its members had agreed to follow suit. 

This was portrayed as a major signal from the industry that it felt the most effective way to tackle obesity was to fight overall calorie intake, rather than have regulations on certain ingredients such as sugar. 

Yet while supplier sources at the time were attacking the lack of scientific rigour behind campaigns such as Action on Sugar, the report makes it clear that as far as the retailers in the UK were concerned, there was no faith in the industry’s move on portion sizes being effective.

‘Name and shame’

The BRC extends its criticisms on self-regulation well beyond public health (see box), and revelations contain strong criticism of ministers, particularly over the use of threats to “name and shame” companies that don’t sign up.

“While many of these arrangements were touted as being the result of government and industry working together in partnership, in practice many retailers felt a number of the ‘voluntary’ agreements they signed up to were effectively compulsory,” says the report. 

“We were told that this compulsion often took the form of ‘quiet threats’ from government rather than explicit threats to act, but created a feeling that failure to sign would elicit vindictive future action from the government.”

Ironically for a government set on slashing red tape, the report also concludes that the avalanche of voluntary self-regulation risks landing retailers with additional costs and administrative burdens, leading to reduced sales and dampening of incentives to find market solutions for issues. 

So would retailers simply prefer the government to get on and legislate? “This is absolutely not about us saying that we are no longer in favour of the voluntary approach and would prefer regulation,” says Tom Ironside, director of business and regulation at the BRC. “But what we do want is for the system when it comes to self-regulation to be fit for purpose.”

If the overwhelmingly negative feedback from the Oxford report is to be believed, the government will have its work cut out securing anything like the volume of voluntary deals in the next parliament as those it says have “snowballed” in the first term - even if it risks opening the door to mandatory regulation instead.