Blog: Dean BestWhat does McDonald's think about sugar taxes?

Dean Best | 22 March 2016

In the UK food and drinks sector, there is one story on everybody’s lips – the country’s decision to tax sugar. And, during the first day of the Consumer Analyst Group Europe investment conference in London yesterday, McDonald’s was asked for its thoughts

The fast-food giant’s Doug Goare, the president of a group of countries McDonald’s calls its "lead markets" (which includes the UK), was speaking at the event and he gave a carefully-worded answer when asked whether the company "had a stance on national sugar taxes".

"I've heard this question in many forms – if it's not sugar, it's fat. If it's not fat, it's sodium. If it's not sodium, it's going to be something else," Goare began, an indication of how much the issue of nutrient taxes is being discussed within and without the industry around the world.

"From a nutritional standpoint, society is going to make its decisions, governments are going to make their decisions," Goare continued. "We want to participate in whatever those decisions are."

Some will likely see Goare's answer as a something of a non-answer, although, given the size of the McDonald’s business, particularly in the UK, and how much debate there has been over last week's announcement from the Conservative government, he was wise to choose his words carefully.

There again, McDonald’s, like all other food and beverage businesses operating in the UK (and in other markets for that matter, not least the US) are well aware of the rising interest among a growing number of consumers of what goes in their food and the link between diet and health.

The UK levy on sugar will, from 2018, tax a selection of drinks said to have too much sugar and, of course, in this instance, McDonald's is simply the retailer of such beverages, supplied in the UK by the Coca-Cola system. That fact, coupled with being cognisant of increased consumer interest in health, makes Goare's guarded response to the sugar tax question understandable.

Nevertheless, McDonald’s has worked – and is working – to improve the nutritional credentials of what it sells in the country, as it is emphasising in a TV ad airing at the moment in the UK. Your correspondent did raise a wry smile when seeing the ad over the weekend, wondering whether it was a coincidence McDonald’s was trumpeting the healthier elements of its offer – or whether it was a very neat piece of marketing timing.

That perhaps is less important than the fact McDonald's is working to provide consumers with more choice. Of course, campaigners will say the company – like others – needs to do more and there is no doubt competitive pressures would have played in a role in the Big Mac maker broadening its menus. But that McDonald’s has made changes to what it sells is undeniable.

"From our point of view, we want to continue to work on our food," Goare told the audience at the CAGE conference. "One, to make sure it's the best-tasting product that appeals to the customer. But we want to also do it in a way that if we could take out some of those ingredients are viewed in society as being not so good for you – you're not going to do without sugar, or salt or fat – but there's an element [of] balancing a diet. We play a small part of it and we're going to participate in society how ever society brings those nutritional elements to life, whether it's menu labelling, whether it's the way ingredients are controlled."

Goare added: "We want to do the right thing for our customers. We will participate in that industry dialogue, in that government dialogue but I don't think it's [about] taking a side. Our side is on the customer's. We want to make sure we are doing what's right for the customer. We know that the customer today wants great-tasting food that they can count on to be safe and it's being served by a company that's responsible and watching out for their interest."

Later this week, we'll provide a run-down of the key points from the McDonald's presentation at CAGE, including Goare's thoughts on innovation, customising menus - and the company's all-day breakfast menu.

What could surprise UK sugar drinks tax mean for food industry? Click here to read our take - published last week - on what regulatory changes could lay ahead for packaged food manufacturers operating in the country.

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