Will self-regulation be enough to beat the fat tax?

Drayton Partners recently hosted an event for food manufacturing and retail professionals focusing on the current recession’s implications for the UK’s diet. We touched on this issue – how the food industry could expect the government to further introduce policies designed to manage the health of the nation and influence the food we put on our plate.

It’s fair to say that the food industry is walking a difficult tightrope at the moment. On one hand, ‘the recession-hit’ consumer is demanding low-cost foods and has developed a taste for higher-sugar, higher-carbohydrate products. But, on the other hand, government and action groups are pressuring them to focus on the nation’s health.

Punitive measures​

This difficult position has resulted in the food industry having to respond or potentially face more punitive measures. So, while it’s perhaps an overstatement to say the UK food industry is welcoming the new generic labelling system, it is clear there is a general consensus that something has needed to be done. Many suppliers are unhappy − including cheese manufacturers who will see their product marked with nutritionally poor wording. But the need to take action has garnered sufficient support to generate a response.

There has been much debate about the so called ‘fat tax’ which health campaigners have pioneered to impose on ‘unhealthy’ food and drinks, in a bid to tackle obesity. Across the board, food retailers and manufacturers have their concerns that the government’s threat of imposing a fat VAT on unhealthy foods could well become a reality, particularly if obesity rates and heart disease cases continue to rise.

Fat tax threat​

One school of thought is that the implementation of a clear system certainly provides a way for companies to mitigate the potential threat of a fat tax, for the time being at least.

Over the pond, there are echoes of this fat tax debate being taken to more extreme measures. It was recently reported in the New York Times​ how Heinz and Pepsico are among some of the world’s major industry players coming under fire over ‘phony’ food labels, accused by lawyers of deceiving consumers with misleading or badly listed ingredients, likening food companies to tobacco firms with their harmful ingredients and risks to public health across the board.

Drayton Partners feels that the introduction of front of pack labelling will be the first in a number of steps that the food industry takes to try to self-regulate, but with the continued rise of obesity will it be enough? We predict not, and foresee a time when the government starts to take more direct action.

Maybe we should come to expect to hear the chancellor raising tax on alcohol, cigarettes and fatty foods in future budgets.