March 2015 – The Economics of Restricting the Marketing of Foods and Beverages to Children

Are food and beverage marketing restrictions cost effective?

An Australian study found that the reduction of unhealthy food and beverage TV advertising was the most cost effective way of addressing obesity.

What would the effect be on the industry?

In 2008, Ofcom assessed the overall impact of the food and beverage restrictions on the advertising revenue of television broadcasters. The assessment showed that while there was a reduction in food drink advertising revenue, the change in net advertising revenue actually increased. The researchers conclude that “restrictions on food and drink advertising have not been the most significant factor affecting broadcasters” as advertising revenues went to others areas than the food and drink advertising area.

Lessons from Tobacco has shown that there was little economic impact with tobacco marketing restrictions:

Ÿ The economic impact of tobacco control on small business is virtually nothing and in some cases small businesses have seen an improvement in revenue in parallel with smoke-free policies.

Ÿ Industry predicted the cancellation of the country’s most popular festivals and sporting events with tobacco sponsorship restrictions. However, festivals and events that were once sponsored by tobacco companies are still successful today. For example, the fireworks festival in Vancouver, BC was once the “Benson and Hedges Symphony of Fire” which is now that “Honda Celebrations of Lights”. There are many examples to show that despite the predictions of not allowing tobacco companies to sponsor festivals and events, other companies have picked up the sponsorship and taken over the advertising. The same will hold true for restrictions around the food industry.

The effectiveness of publically funded health promotion messages tend to be overwhelmed by the marketing resources of food and beverage companies.

-Dr. Hans Krueger

Thank you to our speaker

Dr. Hans Krueger is the founder, H. Krueger & Associates Inc., which was founded in 1996 to service the field of health care management. The company provides economic and epidemiological analysis for a variety of major health care authorities and agencies in BC. The company has recently expanded to central Canada, including federal and national agencies.

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