Simon Tuckey has spent much of his career in the food industry in the UK and overseas. Here, he debates the idea that obesity has become so costly to the NHS it’s time to use financial mechanisms to reduce food consumption…
We live in exciting times. Maybe too exciting for most of us. Much has been written about the level of food we import; for the first time in peacetime, last year more than 50 per cent of our food was imported, mostly from the EU.
Today’s twist in the Brexit story for food is the likely effect on the price of sugar if the UK leaves without a deal (French sugar giant Tereos warns of the dangers of a hard brexit).
The rise in raw sugar prices will be more than 100 per cent if the mooted World Trade Organisation tariffs are used, as various government briefings suggest.
DEFRA’s answer to this problem long term is to encourage the production of more sugar. How ironic that while DEFRA does this, Public Health England is working hard with the food manufacturers to reduce sugar consumption, targeting 20 per cent down by 2020. Not very joined up government policy; perhaps no surprise just now!
The newspapers meanwhile are full of stories of citizens madly stocking up their larders with long-life food. I am quite certain that there will be some empty shelves in supermarkets come 30th March or soon after: the logistics arrangements of the food industry are simply too efficient, too tight to cope with any kind of friction on the borders with Europe.
The other big news this week is the Competition and Markets Authority effectively ruling against the Sainsbury/Asda merger on grounds including that it will likely reduce choice and increase prices.
The leaders of the merger plan made much of the £500 million savings that they would extract from suppliers and pass on to consumers in lower prices. Look at the margins of the biggest suppliers said the CEO of Sainsbury – they can easily afford to pay.
What he did not say is that those suppliers are predominantly the makers of long life, low-cost, highly advertised, snack foods like breakfast cereal, confectionery, biscuits, savoury snacks, canned goods, some dairy.
The suppliers of the fresh foods like fruit and vegetables are already on wafer thin margins, largely small in scale and quite unable to generate any savings by dealing with another grocery behemoth.
Who can blame the retailers though: we have embraced the new discount grocers and rewarded them with our business so much that the “quality” grocers feel the need to squeeze prices even lower to catch up.
Restricting individual freedom to consume what we want is difficult but we bit the bullet with seat belts, with smoking and it worked…
It is a sad truth of the food industry that the effect, on our society, of 40 years of dramatic efficiency improvements has been to give us more choice and has led to much lower prices – food expenditure has gone from 30 per cent plus to 10 per cent minus of average household expenditure. Sad why? Because that period has coincided with a huge change in our size.
In the 1960s only 1 per cent of men and 2 per cent of women in England were classed as obese compared to today’s 25.2 per cent of men and 27.7 per cent of women.
At the end of the 1950s, the average man weighed 10.2 stone (65kg) and the average woman 8.7 stone (55kg). Today the average weights are 13.2 stone (83.6kg) and 11.1 stone (70.2kg) respectively.
Fewer people now walk to work or school with more than double the proportion of people owning cars, while television ownership has risen from 75 per cent of households to almost 99 per cent.
Government agencies like Public Health England (PHE) are manfully trying to encourage us to turn our back on the so called ‘unhealthy’ food and manufacturers are working hard to innovate with less calorie filled variants of their popular products. But nothing so far has halted the growth in obesity.
Many commentators seem convinced that big brand food companies could reverse these trends if they just: “stopped advertising”, “ banned promotion”, sold only “ healthy food”.
But the stark reality is that the rules of economics have played out in food just like other areas: if the price of a good falls, the demand for it will rise.
Whether it’s TV, or overseas holidays, or iPads, or cars, or food, modern life has made all these things available for less and so we have bought them.
The newspapers are daily, full of the latest medical evidence on whether we should eat this food or that food, but the simple reality is we need to eat less to be healthy.
“Eat well. Mostly green. Not a lot.” is a good maxim for us all.
Has the time come to use the normal rules of economics to reverse obesity trends? Should food be more expensive not just to make us eat less but also to make us throw away less – it is estimated that we waste a third of the food we buy – homes and restaurants included. Should we not allow retailer mergers precisely because they might reduce prices?
These are unprecedented times and perhaps we need unprecedented solutions? We cannot afford to keep increasing our health budgets to deal with the results of over consumption of food? We should be aiming to reduce calorific intake across the population. If that is correct, then the quickest way to do it would be to increase the cost of food. Certain economic fact.
But not likely to be popular – imagine the ratings of a party that said they were going to put up food prices. In fact, the demand is the other way: the discounters Aldi and Lidl are opening 100 stores each per year; there is a glamour among the Brexiteers to welcome cheap food from around the globe to a tariff-free Britain.
How are we to eat less? Surely the time has come to use tax to encourage a new healthier diet. Tax alterations to price were a crucial part of reducing smoking. Of course there will be issues in implementation – will poorer citizens be penalised more than richer in buying chocolate? But the notion that manufacturers can produce food with healthy characteristics that people will buy and that obesity will reduce is a very long shot. Education about diet has been in play for a considerable time without effect.
Restricting individual freedom to consume what we want is difficult but we bit the bullet with seat belts, with smoking and it worked. We all want a healthier and happier future for all – shouldn’t we at least discuss it?