The government’s impact assessment justifying a switch to the 2018 nutrient profiling model is “not fit for purpose” and makes huge assumptions about how it will affect consumer behaviour, claim the food and advertising industries.
The Grocer understands they are set to launch a challenge of the evidence, as a consultation on how the model will be applied to the junk food advertising ban and in-store promotions clampdown approaches its end.
Critics claim the impact assessment, which was published last month when the government confirmed it would be pushing ahead with plans for the huge shake-up over what food is defined as HFSS, is hugely flawed both from an economic and health benefits perspective.
“To put it bluntly the impact assessment is not fit for purpose and lacks a proper and thorough representation of the impact the policy would have on consumer health or UK food businesses,” a source told The Grocer.
“The widespread industry view is that the assessment of the business impact in particular is so poor, we’ve been forced to investigate getting our own data to ensure it is properly represented.”
It’s understood the industry’s evidence will be presented both as part of the consultation response and in separate communications with the Treasury.
Impact assessment assumptions
Sources pointed out that the document in question uses the world “assume” or “assumption” no less than 148 times.
“It is riddled with assumptions that lack proper evidence both from an economic and heath point of view,” adds the source.
One paragraph in the impact assessment reads: “We have assumed that consumers will substitute ‘less healthy’ products impacted by the policy with healthier alternatives, but we have not investigated how this might vary by product category or how available ‘like-for-like’ substitutions will be for the product categories in scope.”
“This is a huge assumption,” adds the source. “We think the reality is the policy is so strict it will wipe many of these out, as they would then fail the NPM and businesses aren’t incentivised to create healthier products in the category.”
In addition, the government document does not take into account the impact of the junk food advertising ban, which came into force only in January.
It also makes what the source described as “wild assumptions” on the costs to industry of reformulation.
“Due to the uncertainties surrounding these costs and the commercially sensitive nature of this information, we have not been able to estimate the cost of any potential reformulation at this stage. The cost of reformulation would also be considered as indirect cost, as there is no requirement under this policy for manufacturers to reformulate,” the impact assessment continues.
The source said: “To suggest that there will be no requirement for manufacturers to reformulate is simply ridiculous. We know manufacturers spend hundreds of millions of pounds a year on healthy product innovation, and now that the goalposts are moving will face having to spend millions more or stop promoting and advertising their products.
“Reformulation may not be compulsory, but how does the DHSC expect consumers to have healthier alternatives to swap to without it?”
The cost of banned advertising
Meanwhile advertising sources said they were “astonished” that the document admitted it did not carry out any thorough evidence assessment of the cost to the advertising industry of the proposals.
“The familiarisation costs for advertising agencies, broadcasters and online platforms, as well as the ongoing profit loss for these businesses due to reduced advertising spend, have not been monetised,” it states.
A spokeswoman for the Advertising Association said: “It is deeply concerning that the government has issued a consultation on a policy that would limit advertising of a vast range of products without any assessment of the impact on ad-funded media. This omission must be addressed at the earliest opportunity.
”These additional restrictions – suggested less than three months after the less healthy food (LHF) rules were first introduced – threaten to significantly reduce advertising investment in the UK and reduce spend on ad-funded media across broadcasters, journalism, online media, and digital tools.”
Asda has also written to MPs calling for ministers to suspend the changes, which it claims will divert money from spending on healthier ranges.
In a letter to the House of Commons Health and Social Care Committee, which is conducting an inquiry into food and weight management, the supermarket claims the impact of the switch on top of costs such as EPR, the deposit return scheme and business rates would pose a huge combined burden on retailers.
“At a time when businesses are already facing substantial regulatory and cost pressures across environmental and operational agendas, introducing a new and more burdensome NPM risks diverting resources away from meaningful progress on health,” it said.
“For these reasons, we believe the 2004/05 NPM should remain in place, supported by mandatory data provision from branded suppliers to ensure completeness, consistency and effective delivery of health-related reporting and targets.
“Introducing an additional, highly complex data requirement on health, so soon after industry implemented the 2004/05 model in good faith as the definitive regulatory standard for health regulations, would impose disproportionate and unnecessary burden.”
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