UK/USA: Cadbury, Hershey could be target of obesity lawsuits
UK soft drinks and confectionery firm Cadbury Schweppes is the European food company that is most at risk from lawsuits claiming its products contribute to obesity, according to a research report by JP Morgan.
The company, which makes Dairy Milk chocolate and Dr Pepper, is beaten only by US confectionery company Hershey in a league table of food producers most at risk from obesity lawsuits, reported the Independent.
The next few places in the league table are occupied by US soft drinks and snacks companies Coca-Cola and PepsiCo, followed by US food giant Kraft. Anglo-Dutch food and consumer goods giant Unilever ranks eleventh.
JP Morgan's report said that 88% of Cadbury's group sales fell into the category of "not so healthy" food, compared to 95% of Hershey's products and 23% of Unilever's.
The report also warned that the obesity "epidemic" poses a serious threat to the food industry. Besides potential obesity lawsuits, there is an increased risk that advertising, labelling and distribution will be more tightly regulated, forcing manufacturers to change marketing practices and spend more on consumer education and research, all of which could hit growth and profit margins.
US food giant Kraft announced this week that it would take steps to cap portion sizes and provide more nutritional information in response to rising obesity rates.
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