Investors have the power to make food companies put health first – and make money | Comment and opinion

In what could be described as the UK’s toughest job interview, the race to become the next resident of No 10, the leader of the Conservative Party and the country, has resulted in an epic amount of slander in TV raids. We have seen candidates pledge to reject important policies designed to protect children’s health, declaring them intrusions of the “nanny state”.

As the candidates finished their speeches, the NHS released the latest set of childhood obesity statistics. The data revealed that more than one in three six-year-olds in England (37.8%, in fact) are overweight or obese. Although we have surpassed the unusually high childhood obesity levels of the Covid-19 lockdown restrictions, this data confirms that we remain on an upward trajectory compared to pre-pandemic years.

In this context, policies such as restrictions on advertising and promotion of HFSS products are indispensable. Labeling foods and beverages as “good” or “bad” or removing personal choice is not the goal. Instead, these policies are essential to ensure that we all have access to foods and beverages that are high in fibre, higher in fruits and vegetables and lower in sugar, salt and saturated fat, if we wish. We are currently inundated with the opposite. These policies are not “anti-business”. In fact, they support market leadership by providing a level playing field in health.

Given that these policies have been announced for a long time, the question is whether the companies have done their homework. A snapshot survey of the nutrient profiles of around 100 popular products from five major manufacturers published by Action on Salt last week painted a mixed picture. While the majority of products surveyed were deemed “less healthy” according to the government’s HFSS model, only two out of 20 Danone products fell into this category, compared to 14 out of 20 at Kellogg’s and Unilever.

It is difficult to compare companies in this way because company reports on the proportion of sales volumes and revenues generated by “healthier” products are lacking. As restrictions on HFSS products begin to be phased in, this information is not only critical to understanding companies’ efforts to support public health, but is also a significant issue for their shareholders. Investors need to understand the extent to which companies are prepared to adapt to these rules to mitigate potential revenue losses.

Although it is in the interest of food manufacturers to provide this information, only a few companies do. As of last year, UK-based Premier Foods, AG Barr and Britvic began disclosing their percentage of non-HFSS sales. Premier Foods has gone even further and committed to doubling its sales of healthier products by 2030. Globally, Danone, which reports sales volumes of healthier products using the European Nutri models -Score and Australian Health Star Rating, is the shining exception. to the rule.

Investors in these companies may be more robust in exercising their shareholding rights to drive the kind of change needed. As illustrated by the filing of a shareholder resolution at Unilever last year, which led to the company making high-profile commitments to the market, investors can have a positive impact on the entire sector. in a short time. Ultimately, shareholders may well be the key players in driving the kind of market transformation that the “nanny” has so far failed to deliver.

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