Food and Drink Federation – Supplementary written evidence (FPO0094)

 

 

Additional data request

 

Request

 

Kate outlined differences between the amounts of promotional discounts applied to higher and lower sugar products, stating that "there is a very slightly higher promotional discount on the higher sugar products". Please could you share the data she was discussing, and explain how it relates to the figures that were quoted by the other witnesses which would seem to suggest that there is quite a substantial difference on promotions between "healthier" and "unhealthier" food. (Mhairi quoted CRUK research on the types of food bought on promotion and Dr Mulrooney quoted the Food Foundation's Broken Plate figures on advertising spend.)

 

FDF response

 

Regarding the evidence base underpinning Kate’s statement that roughly similar levels of promotions on healthy vs unhealthy foods, but that people choose to take advantage of promotions on less healthy products and so volume of spend might be greater.

 

NHS Scotland’s Rapid evidence review: The impact of promotions on high fat, sugar and salt (HFSS) food and drink on consumer purchasing and consumption behaviour and the effectiveness of retail environment interventions

 

From pages 10-11:

 

Although it appears healthy and unhealthy food and drink are promoted equally in retail settings, many foods and drinks which are high in fat, salt and sugar are bought on promotion more frequently than other healthier categories – around 50% compared to around 30% respectively […]”

 

“As mentioned above, a UK-wide study covering 11 major retailers estimated to be 70% of the total grocery market found no difference in the prevalence of promotions offered on healthier and unhealthier foods…...In addition, the study suggested that the same level of discount resulted in a larger sales increase on unhealthy foods than that for healthier foods, with sales increasing by 7.7% for every Standard Deviation Point* decrease in nutritional value. This suggests that like-for-like promotions of unhealthy food and drinks generate disproportionately greater sales than promotions on healthy food products.”

 

Regarding the level of the discount, the PHE evidence review found there is only a 1% difference between total food and drink and higher sugar categories.

 

Public Health England’s Sugar Reduction: The evidence for action. Annexe 4: An analysis of the role of price promotions on the household purchases of food and drinks high in sugar

 

From page 31:

 

the average promotional discount is 34% for total food and drink, but a marginally more generous 35% for higher sugar categories.”

 

 

 

Assessment of profitability request

Request

 

Kate also undertook to research - can a way could be found of assessing the profitability of different foodstuffs? This is in reference to the assertion that has been made in evidence to us that "healthy" foods are less profitable than "unhealthy" foods.

 

FDF response

 

FDF cannot discuss and does not keep information on product costs and margins given Competition Law. Food and drink manufacturers typically operate on low profit margins and face the same challenges in terms of managing seasonality and price volatility. As a result, we do not foresee that there would be any correlation between profitability and the perceived ‘healthiness’ of an individual product.

 

13 March 2020