USA: Kraft: cutting itself down to size (COMMENT)
As US obesity levels rise, Kraft has been under increasing pressure to promote a healthy lifestyle. After a court case involving Kraft's Oreo biscuits, new reforms are set to reduce portion sizes and to remove all advertising from schools. While Kraft's move makes sense, it will not be able to completely distance itself from the obesity issue.
Amid growing health concerns over Kraft products, the food manufacturing giant has announced plans to cut back on fat levels and withdraw all advertising from schools.
Kraft, the second largest food and beverage company in the world after Nestlé, has been under pressure by both consumers and the government to combat what is now seen as an epidemic of obesity in the US. In May 2003, Kraft was threatened with lawsuits over the labelling of the fat content of its Oreo cookies. While at the time the company claimed the charges were "unwarranted and unjustified", the recently announced plans are specifically aimed at making consumers more aware of what, and how much, they eat.
Kraft is forming an advisory council that will help it to determine new standards for its products. Proposed measures include caps on portion sizes, improved guidelines on nutritional values and the elimination of all in-school marketing.
Other food retailers have been under similar pressure - McDonald's was taken to court at the beginning of the year on the charge of promoting obesity. The first claim was dismissed, but the plaintiffs filed a new case just a month later.
While consumer lawsuits against corporations such as Kraft and McDonald's rarely succeed, reports of them in the press do not help either the companies' images or their share prices. Kraft weathered the announcement of the Oreo suit fairly well, but it would still rather not put its reputation on the line again. Expenses incurred in implementing the new reforms are simply safeguarding the company against future consumer dissatisfaction.
In a country where over two thirds of the adult population is overweight, there is plenty of fuel for the fire and new lawsuits are likely to continue emerging for some time. It makes sense for Kraft to remake its image as a problem solver rather a problem maker, but as a major producer of snacks and confectionery, the move might not be enough for Kraft to distance itself from the issue.
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