Junk food manufacturers should be hit with higher taxes to help fund more advertising for healthy food and drink, according to new plans proposed by three industry heavyweights.
Former food tsar Henry Dimbleby revealed the idea – naming it ‘King’s Law’ after former Sainsbury’s CEO Justin King – that would see a small but significant levy placed on the advertising budgets of junk food manufacturers.
King previously sat on the advisory panel of Dimbleby’s National Food Strategy. “Justin came up with this brilliant idea which he says was mischievous but I’m now campaigning for,” said Dimbleby alongside King at Groundswell Festival on Wednesday.
“Most of the money on advertising food is spent on junk food. He says you take a cut, 5% of that, give it to the best ad agencies in the land and tell them to advertise fruit and veg and foods that are good for you… When it comes in, we will call it King’s Law.”
Ad budgets
The advertising budgets of major food companies are worth billions of pounds every year. Nestlé announced in November it will raise its marketing spend to around 9% of global sales – worth about £7bn each year.
Former Defra secretary George Eustice, speaking at the same event, revealed his department was working on an idea similar to King’s Law just as the Conservatives were kicked out of government last year.
The proposals would have been legally binding on certain food companies while allowing them to deliver it in different ways, Eustice said.
“Rather than having a ban on the advertising on so-called unhealthy foods, collect a levy for all that and then use that money to do healthy advertising with things like Veg Power.
“If you could upscale the budget for that sort of healthy food advertising, it would make a huge difference.”
The government revealed last week that supermarkets will soon be legally required to encourage shoppers to buy healthier food. Retailers and manufacturers will have to “make the healthy choice the easy choice”, the government said, although it will be left to the companies to determine the best way to do that.
Fairer food
Eustice and King were accused of playing “the blame game” by one audience member after the pair clashed on the role of independent regulators in building a fair food system.
Eustice brought in the Agricultural Supply Chain Adjudicator in government to help regulate the dealings of milk and pork through the supply chain. This was necessary, he said, as dairy processors will typically “dump on the farmers” whenever pressured on price by supermarkets, rather than push back against retail buyers.
“If we’re going to fix this problem of poor profitability in agriculture, rather than say the answer is that the government should give a subsidy to farmers… we actually need a structural increase in farmgate prices,” Eustice said.
“The good thing is you can have a structural increase in farmgate prices of about 10% without a huge impact on retail prices – about 1% to 1.5%.”
King said he disagreed with ”almost all” of what Eustice said in a “reasonably profound way”.
“In very large part, the Groceries Code Adjudicator has led to higher margins for very large processors and international brands at the expense of the consumer,” he argued.
Trade wars
Eustice has been critical of the UK’s trade deal with Australia, previously arguing that then trade secretary Liz Truss gave away “too much” in the negotiations with Canberra.
This week, he blamed some of the deal’s perceived shortcomings on former UK trade advisor Crawford Faulkner. Faulkner, a New Zealander, thought the UK “should just liberalise and expect nothing in return”, Eustice said.
“Now New Zealand adopts that as a strategy, because it’s a tiny country that’s got nothing to offer in return anyway… but for a major economy like the UK, that’s not the way you do it.”
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