With Scottish Food & Drink Fortnight in full flow, the Scottish food & drink sector will be rightly celebrating its many successes. However, there are a number of new challenges on the horizon.
One such challenge is the UK Government's plan to restrict the advertisement of so-called "junk food" to children, on which it consulted in 2019 and 2020. Originally concerned mainly with TV advertising, the proposals now extend well into the online sphere.
The Government intends to:
- implement a 9pm watershed on television advertising (including in UK-based on-demand program services) for high in fat, sugar and salt ("HFSS") products; and
- introduce a blanket ban on paid-for online advertising of HFSS products.
The changes are due to be implemented in 2022 and will apply on a cross-UK basis. The restrictions have been scaled back somewhat from the original proposals, in particular to exclude SMEs (i.e. businesses with fewer than 250 employees), but they still have the potential to dramatically limit the ability of many food producers, retailers and restaurants to market their products
What products will be caught?
The definition of HFSS products has attracted a lot of scrutiny. The Food Standards Agency introduced a Nutrient Profile Model ("NPM") in 2004/05 which scores food and drink products based on "positive" and "negative" nutrients. The Government has indicated that a wide variety of products, if they meet the test of "less healthy" under the NPM, will be within the scope of the restrictions. Included in the list of products potentially within scope (see Appendices 1 and 2 to the consultation response) are:
- Soft drinks, juice drinks and milk drinks (each with added sugar);
- Crisps and savoury snacks;
- Breakfast cereal;
- Chocolate and sugar confectionery, ice cream, cakes, sweet biscuits, morning goods (croissants, pains au chocolat, etc.), puddings and dairy desserts and sweetened yoghurts;
- Pizzas, chips and potato products, ready meals and breaded / battered products; and
- A wide range of foods, including sandwiches, starters and main meals, sold in the "out-of-home" sector (which will catch restaurant, takeaway, sandwich shops and other retail food chains).
Who will be subject to the restrictions?
The watershed obligation in relation to TV and UK-based on-demand advertising will apply to broadcasters. For paid-for advertising online and on non-UK-based on-demand programme services, the restrictions will apply to the advertisers themselves.
How will the restrictions be enforced?
The Government proposes that OFCOM will supervise enforcement of the restrictions, but with day to day enforcement led by the Advertising Standards Authority ("ASA").
The ASA will promote voluntary cooperation and deal with complaints relating to non-compliance. OFCOM would act as a backstop, using regulatory powers to deal with serious or repeated breaches or where the ASA's interventions had failed to satisfactorily tackle non-compliance. OFCOM already has the power to impose financial penalties for certain regulatory breaches, and it is likely that it will be given similar powers to enforce these restrictions.
Will there be any exemptions?
There are a number of important exemptions to the proposed restrictions. As noted above, small and medium sized enterprises, defined as those having 249 employees or fewer, would have an absolute exemption.
Because the online ban applies to paid-for advertising, "owned media" (e.g. businesses' own social media feeds and websites) will not be covered by the ban, and nor will transactional / point of sale information about products the customer has sought out for themselves.
The owned media exemption should alleviate one of the biggest concerns about the original proposals, which was that small businesses such as cafes and bakeries would lose the vital ability to promote their goods on their own social media feeds. However, what is given by this exemption may be taken away by other UK Government plans to restrict online promotions (see below).
There is also an exemption for business-to-business advertising. In addition, companies that produce, retail or otherwise trade in HFSS products will still be free to advertise their brands online and on television, so long as no identifiable HFSS products feature in the adverts.
Potential legal challenge?
The scope of the proposed restrictions remains very broad notwithstanding the exemptions that have been introduced through the consultation process, and the policy has attracted significant criticism. For example, the Food and Drink Federation noted that the restrictions would make it difficult for companies to advertise products that have been reformulated in order to comply with other aspects of UK Government policy. In addition, the realisation of the desired outcome – a reduction in childhood obesity – is subject to a number of uncertainties.
Under Article 10 of the European Convention of Human Rights ("the Convention"), restrictions on freedom of expression need to be a proportionate means of achieving a legitimate aim. The same rule applies to restrictions on the right to peaceful enjoyment of possessions (which can include IP, such as that in branded food and drink products) under Article 1 of Protocol 1 to the Convention. While commercial expression such as advertising is afforded less protection under the Convention than, for example, political speech, and the A1P1 right also receives only limited protection, it will still be for the UK Government to demonstrate why the particular restrictions it proposes are proportionate in all of the circumstances.
There are prima facie arguments that could be made on proportionality, particularly the case in the online sphere, where the blanket 24-hour ban has a less obvious connection to children than a 9pm watershed for TV adverts. There may therefore be an argument that the objective could have been pursued through less restrictive means, such as targeting the ban at sites aimed at or likely to be viewed by children.
Proportionality in relation to Convention rights also requires that the impact on the infringed rights should not be unduly severe when balanced against the likely benefits of the restriction. Disgruntled food and drink (and indeed advertising) businesses and groups have been making arguments along those lines already. They point out that the restrictions could have a potentially very significant effect on their businesses, while critics of the proposal (both those who say the proposals do not go far enough and those who say they should be dropped or scaled back) have pointed to estimates – based on the Government's own impact assessment – that the TV restrictions will remove only around 1.7 calories per day from a child's diet and the online ban fewer than three calories per day.
From a proportionality perspective the proposals could conceivably fall between two stools – sufficiently restrictive to engage the Article 10 rights of the affected businesses, but not effective enough to justify the burden imposed on them.
As always the devil will be in the details of the eventual legislation, but a Convention rights challenge would not be a surprise.
Other anticipated regulation of food and drink products
The UK Government is also seeking to limit the promotion in England of HFSS products in store and on retailers' websites, announcing at the end of December 2020 that it intends to ban volume offers (such as buy-one-get-one-free promotions) and limit the in-store and online promotion of prepacked HFSS products. These new limitations will prevent the promotion of prepacked HFSS products at checkouts, on aisle ends and at shop entrances, and online on entry pages, landing pages for other food categories, and shopping basket or payment pages.
These measures, due to commence in England in April 2022, will apply to businesses with more than 50 employees (though the limitations on in-store promotions will only apply in shops larger than 2,000 square feet, so smaller branches of large businesses won't be affected).
The Scottish Government included measures to restrict the promotion of HFSS foods in a previous consultation but has yet to introduce concrete plans. The Scottish Government's Programme for Government 2021-22 commits it to progressing legislation to impose restrictions "on unhealthier food and drink promotions" in the lifetime of the current Scottish Parliament (i.e. by 2026). Restrictions on promotion south of the Border may therefore form the basis for similar Scottish restrictions in due course.
In the meantime, the Scottish Government last week published an "Out of Home Action Plan", intended as the first step in a framework to promote healthier eating out of the house. The Action Plan raises the prospect of, amongst other things, mandatory calorie labelling on restaurant and takeaway menus (the UK Government has already published similar proposals to apply in England). While such new regulations may go down badly with a hospitality industry still trying to recover from the impact of COVID restrictions, they seem unlikely to raise the same potential for legal challenge as the advertising restrictions.
For more information on the issues raised in this article, please contact Charles Livingstone or your usual Brodies contact.
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