How the nutritional content of food is labelled is a subject that causes fierce debate in markets around the world. And last week Tesco stunned the UK grocery sector with an announcement that marked something of a U-turn on its policy on the issue.

Tesco has long been a proponent of labels that gave guideline daily amounts, or GDAs, of the nutrients shoppers should consume each day over the "traffic light" system, which campaigners have long argued consumers prefer. The UK's largest retailer said on Wednesday it would now use a "hybrid labelling system", which included both GDAs and traffic lights, after "new customer research".

"We are committed to doing what is right for our customers and therefore have decided to bring together the distinct benefits of GDAs and traffic lights," Tesco CEO Philip Clarke said.

In the first of his new, monthly Consuming Issues [put in italics, please] column, just-food contributing editor Ben Cooper argued Tesco's announcement has left UK food manufacturers isolated.

Through the Food and Drink Federation, UK manufacturers had stood alongside Tesco in their preference for GDAs. For suppliers, it is not a great time for that consensus to come to an end. The UK government wants to see a single, consistent approach to front-of-pack nutritional labelling and has just completed a consultation that will help shape the eventual format it will recommend.

The Government welcomed Tesco's announcement, which suggests it is now very likely to recommend a "hybrid" system using GDAs and traffic lights. And one should not under-estimate the impact this could have on manufacturers supplying the UK market.

One overseas manufacturer supplying the UK made a major acquisition in the country last week. The change in the UK operations of US food group Hain Celestial is, as one Wall Street analyst put it last week, like the difference between night and day.

Hain Celestial found its first five years in the UK something of a challenge. It made a profit in the first 12 months but then saw successive years of losses. Some companies would, perhaps, have thrown in the towel but Hain Celestial's management persevered and, in the last ten months, the company has made two acquisitions that have marked it out as a serious player in the UK.

Last autumn, Hain Celestial acquired UK chilled foods firm Daniels Group, a company that owned brands including New Covent Garden Soup Co. Last week, however, the company, through its new UK arm Hain Daniels, struck again, swooping to agree a deal for a clutch of brands owned by Premier Foods.

Hain Celestial struck a GBP200m cash-and-shares deal to acquire brands including Hartley's jam, Sun-Pat peanut butter and Gale's honey. Premier, which is looking to sell assets to cut its debt and focus on fewer brands, has long deemed the assets as no longer central to its future; Hain Celestial, however, sees potential not just in the brands but also in the platform it could provide it for further growth in the UK.

"Our announcement today of the acquisition of market leading grocery brands from Premier really establishes Hain Daniels business in the UK as a scale player across all sectors fresh, chilled, frozen and now ambient grocery," Rob Burnett, Hain Daniels' chief executive, told analysts last week.

Hain Celestial has already indicated how the Premier deal could provide a platform for growth; Burnett also revealed the company will launch its US Greek yoghurt brand Greek Gods in the UK later this year.

Last year, when Hain Celestial announced the Daniels deal, president and CEO Irwin Simon said the company had realised it had to grow to succeed in the UK. "You're kind of fish or fowl there, you're not important to the retailers," he said. "My philosophy was you either sell and get out or you get bigger."

In under a year, Hain Celestial looks to have established itself as a significant supplier to UK retailers.

Until next time...

Dean Best
Managing Editor
Web: http://www.just-food.com
Email: editor@just-food.com
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