10/02/2017 Select Committees


Recorded coverage of the Health Committee's session on childhood obesity, with evidence from Coca-Cola and public health minister Nicola Blackwood, from Tuesday 7 February.

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Good afternoon. Thank you for coming to this afternoon's follow-up


session on the Government's childhood obesity plan and thank


you, too, to all of you for agreeing to reschedule this afternoon's


session. Can you all hear me? Sorry you were


indicating you couldn't hear me? Is there anything we can do about the


sound levels? There is no amplification. So we are


all going to have to project a bit more. Can you hear me all right now,


Sir? Joonchts yes, ma'am. Right. So, before we get started,


can I please ask each of the panel to introduce themselves to those


following from outside the world, stating with yourself Paul Dobson


son I am Professor of business Strategy and public policy and also


head of Norwich Business School at the University of East Anglia. I'm


dre director of the committee's of advertising practice. They are the


committees that right the UK advertising codes.


Thank you. Good afternoon, I'm John skad Woods, the general manager of


Coca-Cola Great Britain and Ireland. I'm the deputy director for Food and


Sustainability at the British Retail Consortium, the trade organisation


representing the retail industry. Thank you to all of you for coming.


We open the questioning. I'm wearing two hats, a Chair of


this committee but also on the all-party group on adult and


childhood obesity. In November 2015, this committee


published their report calling for bold and brave action, do you think


the Government's childhood obesity plan fulfils that call? We start


with Professor Dobson? Thank you very much for the question. No, I


don't think it goes far enough. I think there is one decisive measure,


and it is very clear will you the soft drinks industry levy. I think


there are other measures which wouldn't to provide incentives which


would hopefully reduce consumption food and encourage children to


undertake more physical activity but for myself I would've wanted firmer


objectives, with clearly defined milestones and bench marks. I


would've wanted to see some positive actions actions particularly around


the retail environment, which would help consumers adjust their


consumption and purchasing patterns and I'm sure there are other


activities as well but my main interest is really around the retail


environment and I would've liked to have seen some firmer policy


measures in that context. From my perspective, the plan


contains a range of measures intended to tackle obese yant we're


supportive of that. In terms of my professional expertise, the plan


looks forward to the work that would be undertaken in temples


non-broadcast advertising of food and soft drinks high and fat, salty


for children and since the plan was published, we have now introduced a


been on such products in a number non-broadcast advertising.


I thank you for the opportunity to be here. I talked on the committee's


work gave, was well-thought through, considered and measured on a


complicated, complex issue. There was a lot of things in the scald


bopd and brave report. Some of which I agreed with and some of which I


didn't agree with but I was surprised then when the obesity


strategy Kim came out, the only concrete measure was the soft drinks


industry levy, which in itself I don't think is going to make any


meaningful impact on obesity rates for either children or adults. From


our side I was interested to see that for the first time, the


strategy uses the balance of regulation verses volume tri. With


the regulatory measures on the levy, however we were a little bit


dispointed that that of level of regulation was not expanded to areas


of product improvement as we had been calling for. We are a little


bit concerned that the plan does not specify how we are going to achieve


the level playing field which we believe is so important.


Thank you. I'm an ex-retailer, I spent 18 years


in retail, so this next section is very important to me, really. I know


all the secret ways to get people to spend more. My first question really


is to Professor Dobson - does your work on the impact of retail pricing


on overeating support our recommendation for action on price


promotion and the promotion of food within a retail environment? Yes. It


does. Let me explain what I think is the crucial issue - we have to think


of the general public as both shoppers and consumers. The two


things are not exactly identical. Because what people buy is not


necessarily what they eat. They could be buying products for other


people in the household to eat but, also, storing products that they may


consume at some later point or core share but the key point about


overeating starts really with overpurchasing because with wns


you've bought the product, then the greater likelihood is you are


actually going to consume it. This is where price something really


quite vital because of all the instruments of marketing, it is


actually pricing that drives the most around what West End up


purchasing. So, the pricing inp sentives you put into the market and


the way that you steer con-- pricing incentive you put into the market


and the way you steer consumers to goods matters. So my work focuses on


a quite a lot on quantity discounts. They could take various forms, in


the form of multi-buys, where you, for example, buy three for the price


of two. But they could be quantity discounts just on a very large


container. You get a cheaper unit price than on a smaller one. That


clearly steers consumers towards buying large amounts. Once they


purchase the large amounts, then there is a likelihood they are going


to consume those large amounts. So there is plenty of evidence that


suggests that portion sizes and the way that consumers view them as the


norm dictate how much they eat and we know that over time, what are


perceived as the form has increased and, therefore, portion sizes, in


particular, seem to be a major driver in encouraging overeating,


along with snacking. Just on that point about portion sizes. Obviously


in the news recently, about a certain chocolate brand making their


chocolate bars forward do you think this is a good way forward? Yes.


There are two aspect to this, one is whether firms do it in a sneaky


fashion so, they don't actually tell you what goes on in the form of


shrinkflation, so you reduce the quantity but don't inform the


public, so they don't know until after they published it. There is an


alternative, you could signal a size reduction and use it as marketing


and say - we are doing this, because we want to reduce the number of


calories that are perceived in a portion. So there is potentially two


benefits that could arise. Thank you. Carrying on with this question,


are there any regulatory actions which could be taken or do you think


it is too difficult to find a way to curb price promotion? If I come back


to the quantity discount dilemma, we see it in every retail environment.


I don't just mean when you go into a supermarket and purchase. When you


go into a fast-food outlet, you are face with the same issue, for a few


pence more, you can get a bhoel lot more food and drink so. This issue


of inconsistent unit prices prevads retail environments. You could


regulate to ask that they set a common unit price, regardless of the


size. That would be quite a drastic measure to do that. But there are -


the ways that you could seek to control particular extreme cases, so


e for example n France my understanding is they've recently


banned free refills of drinks. That would be a measure. You may think


that buying buy one get one free offers would solve the same problem


but they could charge you an extra penny for the extra amount. So that


doesn't resolve around it, there are ways to work around it. I think that


adds a critical issue, you need to think through what the ramifications


of any measure would be. You certainly don't want to have effects


which could be dely tierous because you have not reasoned through how


the venders would respond to the measureses.


Does the rest of the panel want to add anything? No? If the government


right to claim that a lot of forward-thinking businesses are


already making changes? You have mentioned a couple. There are a


number of instances where some companies have recognised that there


is a direction towards encouragement towards sugar production for example


all they are trying to reformulate their products, sizes accordingly,


signalling a benefit. Any voluntary agreement, the problem is that


companies first and foremost, profit motivated, will focus on revenue and


profits. They will only go so far as it suits their bottom line. Clearly


they have to think of what competitors will do if they


co-ordinated move together that might not be quite a disadvantage to


reducing size but if you left it to an individual firm they might be


reluctant to do it until other firms follow suit and this is where


government policy can act as a co-ordinator, overcoming natural


competition through lack of coordination because you are


requiring the industry to move in that way. This is what is


interesting about the soft drinks levy. It applies to the industry


together so they will all have to respond than take account of that


measure. Leading the way for years in the way of nutrition values, in


terms of whether changes have been introduced in areas like marketing


and promotions our members have been trying hard to move away from


certain type of marketing and promotion that customers do not one


announcements have been made by a number of our members in the press,


moving away from buy one get one free. There has been progress. Some


of those shows in the figures. When the committee met last the evidence


from Public Health England had just been published and 40% of food was


being sold on promotion and the latest figures show a deep case in


-- a fall down to 27%. There has been a move away from promotions and


certain types of promotions. There has been changed taken by individual


companies. Do you have any evidence that the government's action will


accelerate a shifting market? For the purpose of achieving that level


playing field and getting everybody to the same, there needs to be


intervention. Last couple of questions. To the same panel


members. What more could or should the retail industry be doing to


reduce the impact on purchase of unhealthy food? Turning it on its


head, what more could be done to make sure that people promote


healthy food options? Do you want to go first? One of the issues is about


these quantity discounts. You have to ask yourself why it is mostly


unhealthy foods you get this. This is because of the nature of the


dilemma in the consumer's mind. They want to have a bargain so tempted to


go large but the angel on their shoulder is suggesting that they


restrain from how much they purchase and consume. It is because of that


tension that you get these incredibly different unit prices.


One example, if you went to a very well-known large retailer today and


purchased a very well-known carbonated drinks brand you would


see a fourfold difference in the unit price between a small size and


a large size or multi-buy. That kind of incentive, even on an unhealthy


product, is going to drive bargain hunters to purchase that, the


extremity of that. Or unhealthy foods you do not tend to see that,


one reason is the products are often perishable. We all about their


products of not consuming fresh fruit and vegetables quickly, they


will perish and end up being thrown away. That limits them to some


extent but equally there is not this kind of tension in somebody's mind


about the difference between wanting a bargain but knowing that actually


it could be harmful. You will always get this problem with unhealthy


products. There will be this tension. There is a further aspect


unhealthy products and that is that they tend to have expandable demand.


That is where you see those products which have the largest proportion of


sales driven by promotions on price because they are expandable and


consumers will grab bargains. Price promotions lies at the heart of this


problem in the retail environment. Do you have anything to add? Every


single retailer has an internal policy that would make them balance


the quantity of products, if you want to describe them as high fat,


sugar and salt, and every retailer has a commitment to promote


healthier moderates. That was incredibly obvious over Christmas


when there was a price war over the vegetables that were to be used in


the Christmas dinner. It was one of the first time where there was a


real place war over carrots for example and that was certainly well


received by customers. The percentage of customers at the


acceptability of what customers want to see has changed and with that the


manner and type of products being promoted and how they are being


promoted by the majority of members are looking at different ways of


positively promoting and providing information on healthier products.


We have heard a lot in the press and media focusing on products displayed


at the checkout. I saw a study that says that we collectively purchase a


third of our sugar and saturated fat as a result of the products we see


on end of while promotions. Would you call that? -- agony. Should


there be a different area to focus on? Interesting question. Part of


the importance of place within the retail environment and what we see.


End of isles, they are noticeable and we have to navigate around them


and they draw our attention and that lends itself to the possibility of


impulse purchases. Up to 40% of what consumers buy is an impulse


purchase. That means that when they go into a supermarket we typically


have a mental shopping list or maybe a written shopping list but in


addition to that we will make purchases on the spur of the moment


depending on what we see. Those signals of them come with bright


yellow, orange and red signs grabbing our visual attention but


there is often framing, that when we see 50% off, 40% off, it attracts as


as a potential bargain because of that framing and we end up putting


those products in our shopping baskets as a result. I have


understood cases that I have looked at as part of my analysis that there


has been a 30 fold increase because of products being put on the end of


isles. The volume increase could be massive on these displays and could


be particularly successful if placed in a position very well. Did you


have a follow-up question? I did and I have some questions on


advertising. I have one as well. Could you go further? You have


touched on a couple of things in what you feel the government, what


further action you would like to see in terms of creating a level playing


field. The level playing field aspect is important whenever you


look at agreements with the industry. If I am honest one of the


problems with the responsibility deal is it was bilateral, agreed


between... As part of the deal, with the manufacturer or individual


retailer what would happen. To be honest, the incentive to come


forward with such an offer to reduce the amount of sugar in your products


or price it in a particular way is only going to come about if it is in


your individual interest to do that. There is this collective problem.


Anything which helps coordinate, I will qualify this, action which


leads to a benefit, whether it be re-formulation or changing in the


pricing structure, is to be welcomed. The caveat is you do not


want to coordinate in the wrong direction. For example if you


imposed a tax on ingredients like sugar so all sugar products become


higher price than the worry would be Edward coordinate prices on


non-sugar products. You get an umbrella pricing problem. You raise


the prices of some products and that reframes the prices of others which


softens competition to raise them. You have to think through what


coordination effects are. You want them to be beneficial and not work


against you. In terms of things like price promotions and activities,


there are ways to do that to encourage. My big issue is the


volume of what we purchase. I believe consuming all goods and


moderation cannot be that harmful, it is consuming in excess, so we


have to work on aspects. There has been a movement of some retailers


moving away from multi-buys, but if that is replaced with one-off


discounts on large volumes it is not going to be helpful either. It is


around coordination to get the ideal benefits. Is there anything you


would like to add? I have a short follow-up on this issue. It is to do


with the nontraditional outlets where you might go into a garage to


buy petrol but to come out with a bag of doughnuts because it is


placed at the counter. I wonder what assessment has been done about the


extent to which those impulse buys not in the supermarkets can have a


detrimental effect and what of anything you believe should be done


to tackle something like that? Yes. I have been guilty of this myself, I


confess. Expertise does not stop you being tempted. I have not seen a


particular study. I am aware of different retail environments where


there is an incentive to make an add-on sale so you comment by one


thing like a newspaper and you are giving a deal on buying a bar of


chocolate and it is the same with doughnuts on top of petrol. All


retailers are trying to create sales if they enhance profits or generate


repeat business. That is one of the other benefits promotions,


encourages loyalty. There are aspects around that. It is worrying


yet again we see an example of an expandable demand product, in this


case doughnuts, where if temptation will allow us to make that purchase,


where if it was a healthy purchase we might not choose to the same


extent. We are caught in an environment where we are directed to


a product we were not miss a thoroughly expecting to be that,


there may not be an alternative healthy option, so we are steered to


making that purchase. It applies in that unconventional shopping


environment for food as much to a shopping environment in a


supermarket. You could equally make similar


cases, for example, in fast-food outlets where you might go in for


one products but are tempted by the value deal that is on offer for the


entire meal. As a bundle deal. It is exactly the same problem, they are


encouraging you to add on an extra purchase.


Moving to advertising, if I could just ask you a couple of quick


questions. Public Health England made a whole range of


recommendations about changes to advertising with respect to high


sugar and fat products, salt products. I know you have announced


some new initiative back in December, I think it was, could you


just explain to me what was recommended by Public Health England


that you have not taken account of in the announcement that she made in


December? -- that you made? I am not sure we


have done an evaluation with what we came out with contends of everything


that Ph.D. Said, we took their review into account and we look at


the evidence of advertising on children's food preferences. In


general terms we have a legal obligation to try to balance


commercial free speech with restrictions that are necessary,


particularly pertinent, of course, in terms of our democratic society


because advertising helps to pay for some of the things that we enjoy. We


did an evidence -based review, taking into account the PHE's


concerns, we concluded that whilst the evidence of advertising's impact


on children's food preferences has not changed, context certainly has


the context in which we view the evidence certainly has, most


significantly in nonbroadcast advertising where we have seen the


role of the Internet in children's lives. Today children spend more


time online than watching television. TV is still holding up,


they are still watching it but they are adding to that their viewership


of online material as well. That has fundamentally changed. Whilst, as I


say, the evidence shows a modest effect on children's viewing


practices and simmering towards their diet, there is no digestion of


a direct link with obesity itself. Unless we thought because of the


changing circumstances it was appropriate to announce in December


from July this year we will be introducing a ban on certain product


adverts in all children's nonbroadcast media, which brings


that into line with the TB restrictions that have been placed


for the last ten years. -- with the TV restrictions. One suggestion in


the past has been that you extend a ban on advertising of high sugar,


salt and fat products. Up to the 90 watershed. That is to take account


of the programmes that children might be watching, but lots of


adults might be watching as well -- up to the 9pm watershed. Is that


something you will consider, because you have not taken that step today?


The consultation was from the nonbroadcast body. In terms of our


general approach to this, we have a genuine concern to put the


protection of children first, but that has to be mindful of avoiding


inefficient, unwarranted or perhaps even counter-productive restrictions


in terms of advertising. Between 2004 and 2007, Ofcom undertook the


most there are exploration of this type of advertising and it concluded


that it was merited to place a ban within children's programmes and


programmes of particular appeal to children. It considered that further


restrictions were not warranted because of two things, first of all


that the public health benefits were uncertain and the cost of extra


regulations were, in the view of Ofcom, too great. For example, a 9pm


restriction, off, calculated that would lead to a loss of broadcast


revenue to the tuna ?211 million net, which clearly has consequences


for UK original programming, including children's programming.,


was concerned about the blunt instrument of nine watershed. Off,


lets many channels which have a negligible child audience and it


would seem unwarranted to impose restrictions on them. To the


broadcast committee of advertising practice has not seen evidence in


order to convince itself that it should challenge the conclusion that


Ofcom came to. But they are open to new evidence. Basically you are


saying that the broadcaster's bottom line is more important than


children's waistlines? Absolutely not, we are saying that we have a


legal obligation to balance the protection of children together with


commercial freedom of speech. What we can do is put in place


disproportionate and unjustified regulation. Ofcom's concern was to


reduce children's exposure to this type of appetising, and it feels


that the measures were proportional to do so. -- this type of


advertising. To go beyond these measures, it was felt that the


public health benefits would be too uncertain from that and the loss of


revenue to broadcasters would be too great. The public health benefits on


that, Ofcom found through its research that there was only a


modest direct influence on children's food preferences arising


out of television advertising, therefore if one was to eliminate


all of this appetising from the schedule, one would only be


eliminating a modest direct influence on their preferences, so


clearly that was unwarranted to have such a level of restriction, which


is why it concluded overall that a restriction on children's


programming was appropriate. Just to ask you about the


restrictions which you have announced nonbroadcast advertising,


in the cinema and online, as I understand it, a threshold applies


with regard to the proportion of the audience which is children. Can you


just explain exactly how that would work, and whether you have any


intentions to go further in that regard? The proportion we propose is


25% rule, what we do is we reverse the burden of proof, we invite get


the tasered to prove to the ASA that it is scheduling or placing this


appetising appropriately and it can use various measures to relate to


the ASA what it believes the audience composition of that


particular mediators. In most cases it is quite clear where media is


director just to a child audience or to a predominantly adult audience.


In borderline cases the ASA requires advertisers to substantiate what the


audience profile of that is, and where over 25% of the audience is


aged under 16, they cannot place adverts for these products in the


media. How will this be enforced online? It


is already in force. We have had the 25% rule in place for some time, the


ASA has been regulating online advertising for nigh on 20 years


now, and since 2011 it as regulated online advertising in non-pay for


space on social media and apps, for example. The 25% rule also applies


to gambling and alcohol products, they cannot be shown where more than


25% of the audience are aged 18 or younger. It has already been


applied. Advertisers understand that when the contract with media they


had to know the ordinance profile of that media. -- the audience profile.


In the case of inappropriately placed advertising we would ask the


advertiser to substantiate the audience profile.


It is a very high bar, 25%, that is quite some demand to bring the bar


down from 25%? It is a very high threshold? For children, 25% of the


audience being under 16, do you feel there was a case... Did you look at


bringing back down? We did not get a lot of pushback in consultation for


lowering the bar, 25% is a figure known to advertisers and seem to


work. Looking at it through the other end of the telescope, what


that would do would be to ban this sort of advertising in media where


up to 75% of the audience were adults. I think it is felt that


extending back to 80, 90% or higher of adults would be disproportionate


given the added an -- evidence of the impact of advertising on


children's food preferences. Can I ask how much is spent in the United


Kingdom on advertising, particularly advertising these kinds of products?


Do you have any sense? I am afraid I don't know. You don't know that


figure. I know it is a considerable sum, we had it when we did being


Majri the first time, so I can't member, but you are suggesting that


advertising did not work and we should not be worried about


advertising high fat and sugary foods to children because


advertising does not really influence them. As someone involved


in advertising, I am sure you are really not trying to send out the


message that advertising does not work? I am involved in the


regulation of appetising, and both are legal duties and responsibility


is to prevent advertising that lead to misleading, harmful or offensive


information. We are concerned about the potential harm that might arise


from the advertising of these sorts of products and what could be


responsible measures to mitigate that harm. The evidence of


appetising's impact suggests there is a modest direct influence on


children's food preferences and some link with children's diets. The


evidence is out as to what that contributes to obesity. We are not


saying it does not have effect, quite the opposite, albeit a modest


one, together with stubbornly high rates of child obesity that we have


in this country, we need to form a restriction which includes both


restrictions on the placement and scheduling of adverts and on the


contact -- content of adverts. Rule still prevent children from seeing


adverts in other media, but where they do see those adverts we have


rules in place ensuring they do not encourage and in healthy lifestyle


in children or invite them to pester their children about products etc.


-- they do not encourage and unhealthy lifestyle in children or


invite them to pester their parents about products etc. We think this


appropriately mitigate the potential harm that can arise. Do you think


the balance is right, parents do not get pestered to buy whatever, not to


name any products? How does a regulated know they have the balance


right? Spend some time in the supermarket listening to children


nagging their parents, can I have this, can I have that? Where did


they get the name of that cereal, drink, chocolate bar if they have


not seen the appetising? We do not regulate retail in-store. At the


child comes into the store knowing the name of what they want, so to


suggest that advertising is not having an effect on the children


nagging the parent. As somebody who has struggled with her weight since


mid-teens I would not think there was some charming adults having a


little bit less high-fat and sugar advertising put into their nose,


either. -- I would not think there was some harm in adults having. Were


concerned that any advertising... Sorry, any regulation should not


have unwarranted intrusion into adult viewing time. That would be


our concern as well in terms of non-broadcast. How does it inhibits


the pleasure of viewing the programme to have maybe fractionally


fewer HFSS adverts? We don't advertise cigarettes or drink, we


try to tackle something that is now a public health issue. Lots of


adults just fast forward through the adverts. Going back to our legal


responsibility, there is a writer for commercial free speech and for


people to receive information about products that might be of interest


to them. That is, of course, important in terms of adults


receiving such information. So you think the adverts work on adults but


it does not have a big impact on children? I think the adverts do


work, both on children and adults, but we are talking about effect in


terms of food preferences. The concern here is more about obesity


and there are clearly more primary factors involved in the causes


underlying obesity, parenting, schools policy, public understanding


of nutrition etc. Public Health England put advertising and


promotion as the top two when they give evidence to us, they say the


evidence showed... Higher than the sugar levy, number four, I think,


was advertising and promotion, both of which are not really much in the


new strategy. I can't speak for the new strategy but I can say we think


advertising has a role to play, we think advertising regulation is


playing its role in putting in a very strict balance, some of the


toughest in the world, in terms of appetising for HFSS products to


children and broadcast and non-broadcast, so from July this


year, all media directed to children will not be able to... At some


countries don't have anything like this before the 9pm watershed. So we


can't be the strictest in the world, if there are countries that do not


advertise on television before 9pm? We are among the strictest in the


world and that is the language of the strategy. You had a follow-up.


Do you accept or does the adverse died in standard laboratory except


that while in proportion terms fewer children might be exposed to adverts


of foods high in fat, sugar and salt on both broadcast and nonbroadcast


in absolute terms there are plenty of examples, larger numbers of


children would be exposed to these adverts? That is clearly the case.


Ofcom's prerogative and ours was was to introduce rules that


significantly reduce children's exposure to advertising. Clearly by


banning HFSS ads we are reducing exposure. Media which is popular and


attracts a large childhood audience, delivering a handful of adds to


them, our view is that the measures we have putting place have


significantly reduced children's exposure. I do not know if it is


because of the non-fragmentation of broadcast media we have precise


figures on what would be the reduction in children's exposure to


nonbroadcast HFSS adverts. Will there be times when children still


see adverts? Yes. Content restrictions are in place. For under


12 is, any HFSS adverts cannot include promotions or celebrities


popular with children. I was watching Saturday night television


the other week and I counted seven adverts that are high in fat sugar


and salt in one segment of advertising on The Voice. I know


from audience figures that the threshold... It is below the


threshold, it is the proportion, but total numbers are thousands of


thousands of children exposed to these adverts. What is your view on


the impact? I would probably go back to Ofcom's consultation and its view


was that restrictions beyond those that are proposed around children's


programming were not merited on the basis that public health was


uncertain from restrictions and the lot of broadcasters was too great


including the loss in terms of reduction in UK originated


programming including children's programming. I imagine the committee


are passionate about programming in the regions and what might happen to


our advertising sector but we are equally if not more concerned about


the burden the NHS had to contend with as a result of that advertising


and wonder what the view is of how we reconcile both two contrasting


and conflicting differences. I have been speaking for a long time. Our


concern would be that if the evidence suggested that advertising


had a greater effect on children's food preferences and the evidence


seems to suggest I think I have much greater sympathy with that view.


Evidence suggests that it has a modest impact on children's food


preferences, some length with children's diet but the evidence


falls short of establishing a link with obesity. The calculation that


seeing adverts equals obesity is not proven. Multiple and complex


factors, schools policy, parental, public understanding of the


division, perhaps more in the dock and advertising. Does anyone else


want to respond? I would not put the benefits of advertising above the


health of our children. That is the last thing I'd want to do. We have


tried advertising control, a global standard, the UK's tight advertising


market. We are compliant with all of the gods and practices that exist


and have been very supportive of the latest change particularly trying to


bring that cold in line with the broadcast code is important. It is


difficult to understand exactly how you prevent it happening online. It


is a much more difficult environment. I do not have an answer


how to make it better online. It think it is better on broadcast TV,


much tighter ability to regulate, but if you look at where children


are consuming media, it is increasingly online so it is


important we have brought the codes together. As a company we would go a


step further, the vast majority of her marketing money goes behind zero


sugar and zero calorie variants to try to encourage it. I am conscious


of the issue around high fat, sugar and salt and we have deliberately


changed the way in which we do our marketing to try to support zero


sugar variants much more to encourage people to make some


lighter choices of that is what they want to do. To conclude, does that


than you have mentioned that is going to be introduced on all


nonbroadcast media extent to games and apps connected to foods that are


high in fat, sugar and salt? Very much so. Anything tied to a


childhood audience. Does that mean the food companies themselves cannot


sponsor those games? Correct. The soft drinks industry levy is perhaps


the eye-catching element of the childhood obesity plan published by


the government. Something that we as a committee supported, albeit in a


different form. What would you say is likely to be the impact of the


levy on the soft drinks industry? I know that it was part of the


committee's report and it became the only hard and fast action that I can


see in the charter strategy as it came out. I do not think it is an


effective measure on its own for tackling obesity rates of childhood


obesity rates. If you look at the soft drinks industry over the last


decade and the shape of their soft drinks industry and how it has


changed, it is remarkable. If you turn back the clock ten years we


were selling three regular sugared soft drinks for everyone zero sugar


or diet drink and today it is 1-1. That is a massive shift in the


make-up of the industry. Selling 44% less sugared soft drinks today than


a decade ago. Yet obesity rates are up. It is hard to draw a causal link


solely between soft drinks consumption and obesity rates. The


levy itself is designed to encourage reformulation. The report in the


area of obesity I have felt most affinity with this the Mackenzie


Institute report and it said there were two primary things


manufacturers could do, one was reformulate products and the other


was portion sizes which poll has referred to. On reformulation the


soft drinks industry has been on a very rapid process of re-formulating


products without a levy. We are competing ultimately in the


marketplace to provide drinks that people want to buy and increasingly


people want to buy lower sugar low calorie drinks so we are competing


and the market is encouraging us to change recipes and reduce sugar


content and I am sure that will continue. As a company I do not


think it is going to persuade me to do something I was not planning to


do something already because we were planning to be the formulating


products, changing recipes, and indeed since I started we have


reformulated 28 of our leading drinks, it reducing sugar and


calories, and 50% of what we sell is zero calorie. Reformulation is being


done already. Portion control of the other big thing. From the Mackenzie


work it seemed top of manufacturers. It will have less impact on portion


control. Man on reformulation. Could I extend the question in terms of


the British Retail Consortium's stance? We did not express a very


strong view either way when the levy was suggested. We have accepted it


and never really expressed disappointment of support, we


accepted the measure was coming in and our response to the consultation


focused on the practical implications, definitions, scope and


so on. I agree with everything John has said, both drinks has been one


of the categories in which most work has been done in terms of sugar


production. A number of the members are working or have stepped up the


reformulation approach to soft drinks ahead of the levy in 2018. If


you could also give your views with regard to impact on the industry but


also on public health. Thank you for asking me the question. It is


something I have reflected on and done research on. I come back to two


points. I raised one when I was talking about umbrella. If you set


the levy to Lord then you the price of sugared drinks but not so high


that it may deter people buying and equally you make to provide


incentives for non-sugar reduced sugared drinks to sit under that


umbrella of the higher price. You could end up raising all prices


which is not the desired effect. The desired effect is maths


substitution, to get consumers to move from buying sugared products to


zero sugar products. Pricing incentives have to be right. Be


clear. I do not want to punish the industry by arguing for a high levy,


I just want to make sure that they actually do formulations and


consumers shift to those re-formulations. The secondary


aspect, the higher you make the levy, the more difficult it is to


give a really generous bargain discount on larger quantities


because those large quantities of also got to carry the levy into them


as well. I see a double benefit of the high levy. Firstly you raise


prices in such a way that it steers consumers to buying the reformulated


products. Secondly it reduces the generosity of the quantity discounts


simply by virtue of those larger quantities having to pass on the


levy you are raising. What is your view in terms of the way it has been


designed and tiered? There are two alternatives. One is to introduce


the levy on the manufacturers and importers which is the route that


has been proposed and chosen. Secondly you could introduce it


through a value-added tax at retail level. I have argued that the


appropriate level is so directed towards manufacturers and treated


almost as an excise duty like alcohol. Because of this problem


that when it comes to retail pricing the retailer will steer consumers


towards taking very large volumes of drinks and if you are only doing


that percentage basis on that you are not achieving what you want to


do, in fact you might encourage more consumption. I can see a perverse


effect of that was applied at retail level. I am well aware that there is


no guarantee necessarily that retailers will pass on the levy in


the percentage amount that is expected, they could pass on more or


less. If you set the level high enough, one way or another they have


to pass it on. They cannot cross subsidise with other products, that


would be a risk I would be concerned about. What do you think the level


needs to be said that is? The Office for Budget Responsibility has


estimated that it might equate to 18p per litre or 24p per litre


depending on the concentration of sugar.


I think that is the minimum. If you really wanted to be effective, those


are what we want in encouraging reformulation and encouraging


substitute products, I would look at a double. That would make a very


profound effect and act as a really clear signal to everybody, that is


the general public, consumers making purchases, as well as the industry.


I know it sounds drastic and hard hitting the industry, but as I think


we have already heard from John, for the industry, they are moving in the


direction anyway of reducing sugar in drinks. If you structure it


right, all it will do is accelerate that reformulation and move towards


less sugar consumption. I know you doubt the effectiveness


of this whole idea in any case, but what level do you think the lobby


would have to be set out to have an impact of some kind? I don't know, I


think it is a hypothetical question. I am not sure I am particularly well


placed to guess what level you are looking for. I would say it is a


pretty hefty levy exactly as it is. On a sector of our food consumption


and drink consumption where sugar is collapsing as a percentage, down 44%


in the last decade. And by every measure, manufacturers like Koepka


are doing the right thing and taking things out of their products. --


manufacturers like Coke. The total sugar consumption is not declining


at the rate that it is from soft drinks. So it seems strange to me


that a ban on what is already an extensive levy by international


standards on the one part of the food and drink industry where sugar


has really fallen fast. Assuming the levy goes ahead next


year, what encouragement can you give that the associated cost will


actually be passed on those consuming the high sugar drinks in


particular, as opposed to other drinks within your brand? I can't


make many specific references to retail pricing -- I can't make any.


Prices in stores are at the discretion of the retailer, not


bound by manufacturers. I would observe that it is a very


significant additional cost to my business. I am in business and need


to recover my costs. So between that and the other costs we are having


added to our business over the next year also, I will seek to make sure


those costs get covered. Sorry, can I just clarify, we have


heard about it being an umbrella costs spread over your entire


product range, we have heard very clear evidence that it... For it to


be effective there needs to be a price differential, will you pass


that on to retailers? It is very important. I will not go into our


commercial relationships with customers, but the principle which I


think you are trying to get to, I understand, I think the principle


which you are trying to get to, given how hard I am working to try


to reduce sugar in my portfolio it would not be in my interests to try


to fight the way the levy is passed. At we want to hear that you will


pass that differential onto the retailer. You can't control what the


retailers do, but if you spread it across your whole product range as


an umbrella increase to observe it into other parts of the product


range and subsidise the sugar, that would be unreasonable. That is not


our intent. Would it be passed on in full proportion? Genuinely, it is up


to the retailer. From the point that you still retain control, would you


be passing on... I will look to recover my costs... Broadly in line


with how the levy is applied, I will seek to recover it. Broadly in line,


or in line? It is very important. I am not seeking to do anything other


than exactly what you suggest, to pass it on as it has been


recommended by the government. That is what you seek to do? Thanks,


James. What is the perception of other panel members in terms of the


likelihood that the high sugar drinks will be the ones that


experience the price increases in the shops?


At the moment my members are trying to understand what projects will be


affected and 2018, because as I specified before, it is going ahead


and plan to conclude before 2018, so it is hoped that the quantity of


products affected by the levy would be the minority. We accept that some


would-be cupboard, the retailer would have to decide how they


approach that and how that translates in terms of cost.


Professor Dobson, what is your thought as to a proportion of the


soft rinks industry, how the proportions will change between high


sugar and low sugar, do you think there will be a market alternation


in consumption between the two? Yes, I think looking at this


particular industry, I want to separate out children and young


adults market, what they might be substituting between the other soft


drinks as opposed to maybe some adults, particularly in a non-retail


environments like going out, an opportunity where they might be


substituting alcohol. There might be two different effects. It would lead


a situation where if the levy was sufficiently high and was passed on


and then the retailer was also prepared to pass that on, you would


get a premium price for the sugary product. That would be for the


industry to decide how they approach that premium priced products, that


they would clearly seek to position it as a premium product. So for


special occasions when you might need a high level of sugar, I would


suggest that that would then appeal more to an adult market. The crucial


issue we have discussed today is about childhood obesity. I think


that bad, clearly, the effects are likely to be much more about


substitution towards reduced sugar products for two reasons, one is the


pricing incentive and secondly there is a very strong signal to consumers


and the public that the right thing to do is to substitute. So the


default does not become a sugary drink, the default becomes a low


sugar or reduce sugar drink. That is what we are trying to achieve here,


I think. There are issues about speed, Ireland assemble the industry


we are talking about major investment and time to adjust. I


thought it was an interesting move to design the levy with


forward-thinking in mind and allow for that adjustment rather than be


automatically introduced. But we want to see that perhaps switch in


consumption patterns. I predict we will see just sugar drinks become


the minority, they will either be left with energy drinks, where you


need to sugar for performing in sports and working out, or as a


premium product designed for adults where they have a high sugar


content. Do you worry about the emergence of mid-sugar drinks such


as Coca-Cola Life, which at 30% lower sugar than standard Coca-Cola


but nevertheless are still quite sugary, and the mixed messages that


sends out and whether actually there is a risk that sugar intake could


increase among some people who are currently drinking the zero sugar


alternative? Any improvement is an improvement. I


think it is a sizeable improvement. I think that is the critical issue.


The message has to, cross, reduce the sugar content. One of the issues


we have touched on, let me reinforce, is about portion sizes --


the message has to, cross, reduce the sugar content. I am delighted to


see new products coming onto the market where they are being


repositioned for a reduced norm. The advent of 250 ML pounds as opposed


to 330, for example. -- 250 ml cans. If it says that the recommended


portion surfing is ml -- two in June 50 ml, they will consume more when


the norm is 330 ml. Encouraging drinks to be packaged as 250 ml will


be a step in the right direction. I think the industry is making that


move, encouragement to move quicker would also be helpful. I come back


to the great enormous disparity in units pricing. B make this concrete


so we really know what we are talking about. A small bottle of a


carbonated drink, working at 25p per 100 ml, compared to a multi-buy


after working out at 5.7 p, that is a huge comet huge -- huge, huge


incentive to bulk buy, and edit the many consumers adhere to just


consuming one or two too rigid and 50 ml portions. As to the mid-sugar


drinks, do you think there is the possibility of consumer confusion


where those on zero sugar products do not quite appreciate that the


mid-sugar brands are full of far more sugar? Coca-Cola Life, if that


is your example, it is a tiny proportion of the Coke business,


less than 1%. The majority of people who have tried Coke Life had


switched from Coke Classic, but it is a tiny part of the business. The


focus for me, earning the business, is the best products to help people


make lighter choices are the zero sugar and zero calorie versions, so


if I take a much bigger part of the portfolio, which is Coke Zero, it


has done OK but it never really set the world alight. When we asked


consumers why it was not working, why are you not effectively moving


from Coke Classic to Zero, 50% of consumers did not realise that the


zero men zero sugar. So we relaunched at last year, we have


called it Coca-Cola Zero Sugar, sales are 40% up. You think it is a


light bulb moment, that is the intent, to try and encourage and


nudge consumers into lighter options, that is the intent. It is


definitely the intended Coke, I believe it is the intent in the soft


rinks industry, therefore, again, back to my earlier point, it is


strange to focus in on the one part of the food and drink industry that


has been so successful at reducing sugar levels versus any other part


of the food and drink industry. You have a follow-up question? Professor


Dobson almost made my case for me, it is coming back this in thing you


mentioned, Mr Woods, control. Portion It is easier to shrink


individual servings and shrink chocolate bars, but when you buy a


large bottle it is very hard for people to know how much is 250 ml,


if you ask the majority of people hear how much is in my classic glass


of water, I think a few of us would get it right. One of the things that


came out of the report was that the link needs to be much more simple,


on the labelling, spoonfuls of sugar, so it is very visual. That


does not help to divide the bottle up. Is there more the industry could


do on a voluntary basis, especially lines on the labelling, especially


now we are coming away from EU regulations, that would help? I


think that 250 ml cancers are very interesting area, we launched those


three years ago and we now have 250 ml cans in 12,000 stores up and down


the country, distribution is growing. They are becoming more and


more available. On the larger sharing bottles it is quite


difficult. People do not share, that is the problem. People do share,


that is what they do, but you are right, it is quite difficult to


judge. We have looked at the idea but not implemented it off-putting


portion markers on the side of the bottle, which I think you see


answered juices. On the side of all our packs we have just introduced


the number of portions which the pack contains, so a label that says


on a one litre bottle, this is ball portions. It is not quite where you


are going but it is starting to move in that direction. As for labelling


in the general sense, the Government has a recommended labelling scheme


which is colour-coded GDAs. At Coke B were one of the first companies to


adopt that and are still in only around a third of major packaged


goods companies which have adopted the Government scheme. The issue is


not, could we have a new labelling scheme question it is, can we all


use the same one? There is a Government recommended scheme and it


should be incumbent on manufacturers and retailers to use that, then


there would be a clearer understanding at a level playing


field. Does the Government scheme need more teeth if people are not


complying with it? I just wish more people... I don't how to make more


people comply, I guess that is for you to decide. I know at Coke the


decision we made was that consumers found it useful to put that


labelling scheme on our packs. So we put that labelling scheme on the


packs. It was less about the numbers on the GDA labelling and more about


the colour codes, the colour codes are quite intuitive. It is the


visual side, isn't it? Moving on to Andrew.


Thank you, starting with Professor Dobson, we focused a lot on the soft


rinks levy, it is important number Government's aspiration to take 20%


of sugar out of breakfast cereals, yoghurt, biscuits, cakes,


confectionery, puddings, ice cream and other sweet goods as well. What


impact do you expect those measures to have on the food and drink


industry? Measures will fail because they are


not targeted. They will have the same problems as the responsibility


deal relying on one-to-one agreements as opposed to an industry


requirement to do it. The reason I think the soft drinks industry levy


will work is because it applies to the industry. You either adjust and


reformulate or pay a tax. There's a clear incentive on everybody to move


in a direction. A vague statement we want to just without identifying


where, how you're going to achieve it, that is not clear from what is


stated, is clearly not going to be a successful strategy because it does


not even tell you where the starting point is of where you are going to


go with it. I have grave concerns about almost a broad aim rather than


an action by which this was supposed to be about. It needs to be much


more categorical on the product categories where they would like to


see the reductions at work on it on that basis. Thank you for being so


Frank. To be specific, what further teeth would you propose that apply


to measures that would result in successful outcomes in achieving


this 20% reduction across those nine categories mentioned? There is no


stick here. What is the threat if you do not comply? It depends of the


targeted nutrient in this case sugar, there should be some implied


threat that if you do not reduce by this level by a set period then


there would be sugar tax introduced for your particular category. The


government has said, it is vague, but said we will use other levers to


achieve the same aims if there has not been sufficient progress by


2020. Specifically what do you think we need? To make a threat credible


you have to sure what the stick is on this. To make vague suggestions


that there could be further action is not enough. You give the industry


a clear timeline when you would want them to re-formulate and you worked


on that basis and see what will happen. I am pressing you on what


you think should happen, and other tax? Yes. Why stop at soft drinks,


is what you are saying? Yes. In my mind it is not about the tax-raising


aspect of what you want, it is about incentive structure that you want.


You want to change the incentives in the way the industry formulates its


products, the way in which they are sold under way in which consumers


buy them. You want all of them to substitute something that is reduced


sugar. That is what your ultimate aim is. We have seen the


effectiveness of the soft drinks industry levy because we are aware


some companies are already be formulating and planning, whether


brand manufacturers or own label. We are seeing the effectiveness. It is


a very good device if you are clear on it, provide the incentive and say


the way to avoid this is to make the changes now or work a structured


plan with a clear timeline. It is the lack of a clear timeline and the


lack of consequences if you do not work to it that troubles me. You


have been admirably clear. Can I ask from a comment from the British


Retail Consortium? We are more optimistic. I would not say the plan


is going to feel. I think it will have certain success. To get full


success certain things need to be introduced. We have called for a


level playing field. We understand that this time around more


conversations are being had with companies that perhaps have not been


engaged before. We strongly believe that the regional ambition, which


was to engage with every single company that has 15 plus outlets in


the country, should be pursued, and that is the minimum level of


engagement we need. To challenge you, the soft drink levy has been


really effective already, why not replicated for these other nine food


categories? I believe there is a way we can reform. We add in the process


of moving towards products that are lower in sugar unlike in the soft


drink category is not alternatives in the case of sweeteners or other


ingredients are freely available to get products that are lower than


sugar. The driver that has been acknowledged to reduce sugar in some


of the categories, for example chocolate, it is different


approaches being used for different categories. The additional element


that we believe is required, having gone through detailed category


meetings for over ten categories that have been identified, is a


little bit more detail. We feel the approach of having maximum targets


in the way we have for assault, as opposed to overall production of 20%


per category, we feel these will enable companies to have a bit more


guidance as to what a reasonable level for certain types of


subcategory would be. What is achievable and reasonable as the


quantity of sugar. To finish, to ask each of you how you think this


should be evaluated and success measured? It is a really interesting


question. There's a number of elements and this is being


discussed. The focus at the moment is on the reformulation element.


There is some measuring tools that have been discussed that will show


how much we are progressing. There is talk about measuring the baseline


for each one of the categories and measuring it in a year and that


would give is an indication of whether we are progressing in the


right direction. There is other aspects such as how we make sure or


understand that we are moving in the right direction for portion sizes.


It is more difficult to understand what that measure would look like.


Talks about volume of sugar but that would not necessarily specified or


correlates directly. That element is unclear. We are thinking about what


that measurement might be. It has been suggested that sales figures


might go a long way in indicating that progress is being achieved. I


am not sure a tax is a good way to achieve the goals set out. I am


talking about the whole plan. In 2020. It is not about raising


revenue. This is about trying to reduce childhood obesity rates. You


have to find a way, I do not know what the measure is, but that is the


goal. It strikes me that what we have is a very narrow firm policy


which is the soft drinks industry levy which is targeting a sector


where sugar consumption is the cleaning very fast so I would be


surprised if you use childhood abuse AT should end goal of the measures


that have been argued so far been make much of a difference. You need


measures, the end measure has to be whether we see the curve coming back


down, and that was why there had been a call for extending the


measurement programme of children, but that will take quite some time,


so you need short-term measures. I am not sure what they are four


sectors outside of soft drinks. OK. Evaluating the approach, not just


one piece of it. My comments are specific to advertising regulation


and clearly one of our concerns would be to monitor whatever the


consequences of the ban coming in, Ofcom was concerned about other


areas where HFSS came to. We need to be vigilant about changes in the


market. We need to stay on top of the evidence base. As we always do,


we want the success of any measure we take, to try to improve on any


kind of ambiguity in the rules. Talking about the extent to which it


is clear to advertisers there are clear audience measures they can use


to apply the 25% test. It is the concern to remain vigilant.


Professor. I reflected that there are aspects that trouble me about


the action plan in terms of its lack of direction beyond the soft drinks


industry levy. I like to see very clear targets and milestones to


achieving those so it is a very clearly understood plan that


everybody who is involved in the industries and consumers can see. It


is that lack of commitment and direction that troubles me, that we


could be here in a few years, nothing is improved, nothing is


changed. There has been reformulation of some products but


not enough to stop what is an epidemic. Whichever way you look at


it, that is what has happened. We know that these children and


overweight children are likely to become obese and overweight adults.


That imposes huge health costs, has the burden on society and reduces


the quality of peoples lifestyles and living. This is the fundamental


that we as a nation get this right and we have an opportunity and we


have to seize that opportunity. I would like to see more direction on


price promotions. They are an issue. Why? Because of temptation.


Temptation awaits us all. I suffer from the doughnuts in the petrol


station. I suffer from temptation all the time. I am always reminded


that the success of many industries and companies relies on


availability. Coca-Cola has been enormously successful. Amazingly


successful company, because of trying to keep products within arms


reach, accessible, and that is the same for many food and drinks


companies. The one thing that is not even mentioned in the policy as far


as I can see is about food, drinks and nutrients in and physical


activity, is the thing that is in this container in front of us, tap


water. Not bottled water necessarily. Almost free. If we


encourage parents and children to drink more, make sure we put it


within arms reach for them, what a difference it would make. For


example, why is it you cannot go to a fast-food restaurant and be served


tap water? You have to order a value meal, and burger, fries and a


carbonated drink. Why are they not giving you tap water and taking off


the price of the carbonated drink in the value deal? You are being


encouraged. Why is there not a water fountain available there so that


rather than have a freebie fill of a sugary drink you can have free


water? There are other environments. Make it a policy that for children


everywhere and schools everywhere, there is freely available tap water


available to them. Get that message over to parents of that when they


sit down in the evenings ready for dinner they are serving water, not


another drink. We are doing our bit. We are. I reflected on that. I am


conscious of the time. One final question. I imagine you will be


aware of the Channel 4 dispatches programme that was on our screens


just over a three months ago, the secret plan to save that Britain.


The original draft obesity strategy. I thoroughly recommend the


programme. It should want the government originally intended to


present in their strategy. Many things in the draft unfortunately


did not make it to the final strategy. In the draft plan there


was a sentence which said that we must recognise increasing amount of


exercise children undertake will not in itself solve childhood obesity,


the number of calories you burn through physical activity is dwarfed


by the amount we can easily consume through what we eat and drink. Would


you agree? That exercise on its own will fix obesity? No. That what you


burn through physical it ever day is dwarfed by the amount you need to


drink. That is why we are getting bigger, we consume more calories


than we burn. That seems clear. We have few before us as one of the


companies, of which there are many, who do your bit in the field of


tackling obesity. Perhaps you can share with us why it is that you the


company spent so much of your income on physical activity programmes? On


your website it is over ?6 million. Subtitles will resume on 'This Week


In Parliament' at 2300.


Recorded coverage of the Health Committee's session on childhood obesity, with evidence from academics, Coca-Cola and public health minister Nicola Blackwood, from Tuesday 7 February.