Processed Food Manufacturer Profits Set to Be Hit by Plain Packaging Plans?
Since May of 2017, plain packaging rules for cigarettes have been in force in the United Kingdom, meaning that all types and brands have had to be contained in the same uniform, plain packets. Not only that, but each and every packet of cigarettes has also been required to carry a graphic warning of the danger to health that smoking presents. The ban actually came into force in May of 2016, but retailers were given 12 months in which to sell all of their existing stock.
The move by the UK government was designed to help drive down the numbers of people who smoked cigarettes and whilst there is no empirical evidence yet to say that it has worked, studies like those performed by UK Health review body Cochrane, suggest that it might http://bit.ly/2EstHHm.
The most popular biodegradable plastic that exists on the the market today is known as PLA (aka Polylactic Acid) and whilst it is, technically, classed as being biodegradable, it takes some pretty exceptional conditions to do so. In order for PLA to be broken down, it must be subject to extremes of heat, rather than happening in a way that nature could deal with on it’s own.
With a much-publicised obesity epidemic ravaging the UK population and sugary drinks and highly processed foods being cited as being one of the primary causes, it has been suggested by none other than Dr Wolfram Schultz, an award winning neuroscientist from Cambridge University, that similar plain packaging legislation could be used to combat the problem.
Whilst it might be a wise move for the health of the UK populace, this change in food packaging law is likely to cost UK processed food manufacturers hundreds of millions of pounds. This can be seen in greater detail in a valuation report produced by Brand Finance consultants http://bit.ly/2EtWyep, which analysed what impact plain packaging legislation would have on manufacturers of a range of food and drink products, including alcohol.
Within the report, it would seem that the likes of PepsiCo and Coca-Cola would have the most to lose, with alcoholic drink manufacturers Heineken, Pernod Ricard and InBev also seeing their products covered by any potential rule changes.
Brand Finance CEO, David Haigh, suggested that removing iconic branding from food packaging would leave their products almost unrecognisable, meaning that brand loyal customers might easily choose not to buy them in the future.
This notion does carry some weight, as the world’s major food corporations have spent billions creating their brand and the way that many of those have pervaded the average person’s consciousness over the years, is not something that should be underestimated. It’s the silent hand that guides our retail purchases without us evening realising.
In addition to the lost revenue for the food manufacturers in question, there’s also the fact that the huge number of people employed in advertising and design services would be heavily affected, as they rely hugely on contracts from the major manufacturers mentioned earlier for their livelihoods. They would most probably suffer as a result.
It would seem like there’s no smoke without fire and whilst the discussion is going on, the chances of us seeing plainly packaged, so-called unhealthy food on our supermarket shelves in the near future, is that much greater. It would also seem that whilst the food and drink industry would be hit quite hard, the benefit to the health of the UK population could be quite profound and perhaps make any negative impact worth bearing.
Until such a time when a ban on packaging branding on foods and drinks that are deemed to be less than healthy is realised and we see what effect it has, the debate is likely to rage on and on.