Blog: Dean BestRegulatory tug-of-war begins again

Dean Best | 18 January 2010

Just two weeks into 2010, the tug-of-war between industry and the regulators started again in earnest last week on both sides of the Atlantic.

In the UK, just days after the country's leading opposition party said it would set up an ombudsman to police the supermarket sector, the Government announced that it too would back the creation of a watchdog to oversee relations between retailers and suppliers.

The plans produced a predictable response - suppliers cheered the news, while retailers were less than happy. The British Retail Consortium even claimed an ombudsman could cost consumers "millions of pounds" and, interestingly, said the establishment of a watchdog would favour multinationals over smaller suppliers.

"This is not about farmers; very few deal directly with supermarkets," BRC director general Stephen Robertson sniffed.

Farmers, however, said the Government's plans were "a victory for common sense and the consumer". And, while the retailers issue dire warnings over prices, consumers generally believe the balance of power rests with retailers - to the detriment of supplier and shopper.

A watchdog may rankle with retailers but, given Labour and the Conservatives are supporters of an ombudsman, it is seems to be only a matter of time before there is a new, key stakeholder in the UK grocery sector.

In the US, food makers are facing more pressure to cut the amount of salt present in the products they sell. Health officials in New York last week announced plans to push for a 25% cut over the next five years. The proposal was led by health advocates in the Big Apple but has been developed by cities and states across the US and could affect businesses and consumers nationwide.

The link between salt intake in heart-related diseases has shone the spotlight on product recipes and consumers on both sides of the pond are now becoming more aware of what is in the food they buy - and are changing what they buy as a result.

In recent months, US food makers have launched a series of reformulated products to meet this changing demand - but also to head off the threat of regulation.

Suppliers welcomed the New York salt proposals but were quick to point out the work they had already carried out to change recipes - and to demand a "holistic approach" incorporating other dietary factors, not just sodium.

Changing recipes has been a key concern among suppliers in many Western markets amid the growing clamour for industry to help tackle obesity and chronic disease.

In the UK, Mars has joined the likes of United Biscuits in cutting the amount of saturated fat in some of its most popular brands.

Mars, Snickers and Milky Way bars are among the confectioner's products that will contain at least 15% less saturated fat - at a cost, the company has claimed, of EUR10m (US$14.4m).

Food makers have long claimed that reformulation is a costly process - both in terms of cash and time. Mars said its move on saturated fat took five years.

However, one trend that the recession has not dampened is consumer demand for healthier products and Mars will be hoping it can gain chocolate sales with this move - not least during the summer when the company's sponsorship of the England football side comes to the fore during the World Cup in South Africa.


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