Food (Promotion and Placement) (Scotland) Regulations 2025: business and regulatory impact assessment

4. Options

4.1 Options Developed

The Scottish Government has considered a broad range of options to deliver a healthier food environment and, in particular, to support people to make healthier choices and to reduce over-consumption of HFSS products.

Four options were set out in the partial BRIA that the Scottish Government considered, including a range of modelling to support consideration of the impacts and effects of the range of options identified. The assessment of these options has been undertaken and is summarised below.

Option 1 – Do Nothing

In this scenario, there are no new Regulations on the promotion of HFSS foods which would be brought into force. There is therefore likely to be no impact on current population weight trajectories.

Option 2 – Narrower food category, no exemptions to business types or size

This option included price promotions and location restrictions with no exemptions based on size of business or type of business in addition to applying a narrower range of foods that would be subject to nutritional assessment and potentially restricted if they met the definition of being HFSS.

Option 3 – Location and price promotions, exemptions for some businesses

This option includes restricting price promotions and location promotions, applying the ‘targeted foods’ list, those foods that are contributing most to childhood obesity. It would exempt small and micro businesses from restrictions and stores with a small floor size from locations restrictions but included Out of Home businesses such as restaurants and cafes.

Option 4 – Location and price promotions, with addition of temporary price reductions and meal deal restrictions

This option included, in addition to location and price promotions, the proposals set out in the 2024 consultation for potential restrictions on meal deal and temporary price promotions.

4.2 Conclusion

The Scottish Government assessed the potential impacts of Option 1 – not regulating promotions off HFSS products - but, on balance, concluded that this option would not deliver its aims in improving population health. Given the scale of overweight and obesity at a population level, and the health harms caused by this against a backdrop of significant pressure on the health service and other public services, it was considered very unlikely to achieve the Scottish Government’s policy aims based on available evidence and stakeholder feedback.

With around two thirds of adults living with overweight or obesity and a third of children at risk of overweight (including obesity), addressing obesity is a public health priority. Given population trends on health, in particular on health inequalities,^[21] and forecasting by Public Health Scotland that indicates a significant increase in disease in the coming decades due to factors including diet,^[22] this option would likely see a continued significant impact of diet and overweight/obesity on health outcomes. This is likely to have a significant effect on population level health and wellbeing in addition to significant costs and pressures on public services including the health system as well as impacts on the wider economy due to reduced labour market participation due to ill health.

Non-regulatory options were considered, such as guidance or voluntary restrictions – however, these were not considered to meet the aims of the policy. Voluntary measures are not considered to be as effective as enforceable restrictions. There is evidence internationally that voluntary restrictions are ineffective at achieving significant public health effects.^[23] It is likely that some retailers would comply, with others potentially choosing not to, which could potentially limit significantly the effects on public health and put retailers choosing to comply with voluntary guidance at a competitive disadvantage.

Option 2 proposed that food types that would be nutritionally assessed and potentially subject to restriction were ‘discretionary’ foods, a relatively narrow list of food types. It also considered the potential for maximum scope of businesses that would be subject to the regulations, including out of home businesses. Discretionary foods are a narrower subset of the food types considered ‘of most concern’ in relation to children’s diets.^{[24] [25]} The Scottish Government assessed this narrower list of food groups to be unlikely to sufficiently meet its policy objective given population levels of overweight and obesity. The Regulations instead include the targeted foods list as set out in equivalent regulations in England and Wales.

Option 4 included temporary price reductions and meal deal promotions – in addition to the price and location promotions considered by the other options. The Scottish Government announced in June 2025 that it would not be proceeding with consideration of TPRs and meal deal restrictions at this time, but would consider these in future, along with stakeholder feedback, as part of future activity on diet and healthy weight.

The regulations align most closely with Option 3, which strikes a balance between achieving public health impacts and the potential regulatory burden on businesses. In line with Option 3, the Regulations will apply to the wider category of targeted foods proposed and will restrict price and location promotions. Exemptions are available in some instances where restrictions in some settings may be challenging to implement or have a substantial impact on business delivery (e.g. smaller businesses, stores with a small floor size and specialist retailers). However, unlike Option 3 in the partial BRIA, the out of home sector will only be included in so far as they offer free refills of sugary drinks.

In arriving at this decision, the Scottish Government considered the broad range of evidence available in addition to the feedback across the several consultations and large number of stakeholder engagement sessions. A theme throughout these consultations and engagement sessions from almost all business stakeholders was a strong preference for, as far as possible, regulatory alignment with England and Wales. Whilst the Scottish Government recognises that regulatory divergence from other UK four nations may be preferred in some cases to achieve a policy aim, in this instance the risk that regulatory burden placed increased costs on businesses that were then passed to consumers was a concern, given the backdrop of cost of living and inflation in recent years.

Businesses that will be in scope of the regulations include those with 50 or more employees, and location promotions restrictions will apply to qualifying businesses in store with a relevant floor area of 2000 sq. ft. or more. Practically, it may not be possible for smaller stores to comply with location restrictions, and it was considered potentially disproportionate to require stores of that size to comply with restrictions on locations promotions at this time. Location promotion restrictions will apply online regardless of store size.

Similarly, given the challenges of some out of home business groups to provide nutritional information to assess whether products would be in scope, and the evidence that a minority of calories are consumed from out of home purchases,^[26] out of home businesses will be exempt from the regulations at this time (except in relation to free refills of HFSS drinks).

Chosen Option

A full analysis of the costs and benefits of the range of options previously considered is available in the partial BRIA. The analysis below summarises the range of evidence and analysis on the final scope of the chosen policy option and a summary of the cost and benefits.

A range of modelled estimates is provided to reflect the inherent uncertainty around the central modelled results. While every effort has been made to provide as accurate estimates as possible, the results should still be treated as illustrative given the dynamic nature of the food and drink market and challenges in precisely predicting the response of businesses and individuals to the policy.

As set out in the partial BRIA, across all options set out on restricting price promotions, the cost to businesses of compliance was substantially less than the estimated health (and therefore societal and wider economic) benefits over the same period. At arriving at a final set of Regulations a number of factors have been taken into account in addition to modelling including population levels of obesity and evidence on the effects the policy may have in reducing this; the modelled costs to business, feedback from business on compliance and the potential regulatory burden; and the risk that increased regulation may increase costs to businesses, which may lead to higher prices for customers.

Foods in scope of restrictions

The regulations provide for which products that are in scope of the restrictions. This includes a two part assessment of whether prepacked products are within scope, which consider whether the foods are:

1. Targeted foods - The product falls in one of the categories of food and drink in Schedule 1 of the regulations (e.g. pizza, ice cream, breakfast cereals); and

2. HFSS - the food is in one of the targeted categories and is “less healthy” according to the 2004/2005 Nutrient Profiling Model.

The food categories are aligned with the UK Government’s equivalent regulations in addition to Public Health England’s Calorie and Sugar reformulation programme^[27] and Soft Drinks Industry Levy.^[28]. These are categories that are of most concern in contributing to childhood obesity, and therefore restriction of promotion of these categories of foods is most likely to achieve the policy aims.^[29]

Consistency across the UK in respect of both the food categories within scope of regulations and category descriptors minimises the regulatory burden on businesses that operate across England, Wales and Scotland and reduces the risk that increased costs due to regulatory divergence are passed on to consumers.

The 2004/05 Nutrient Profile Model (NPM) will be applied to targeted foods, including reformulated products, to determine whether they are HFSS for the purposes of these regulations. The 2004/05 NPM is an evidence based tool which is well understood by the food industry. It is commonly used in ensuring food advertising meets relevant advertising codes.

A category based approach alone (i.e. ‘types’ of food and drink) would not allow for identification of non-HFSS products within food categories. Using nutrient profiling ensures that the regulations are proportionate and do not restrict non-HFSS foods within targeted categories. This is in line with the approach taken in England and Wales.

It also allows manufacturers to reformulate products so that they are no longer assessed as being HFSS, and would therefore not be subject to promotions restrictions, with restrictions applied based on whether they are HFSS rather than solely what product type they are. A finding from a University of Leeds evaluation of location promotions in England stated that, “there was also considerable reformulation by industry (lowering fat, salt or sugar from products or adding fruit, vegetables, nuts, protein and fibre), with three out of four retailers saying the legislation changed their reformulation plans.”^[30]

Feedback from the 2024 consultation from industry respondents generally set out a preference to align with equivalent regulations in England.

Given the population level consumption of free sugars, and that added sugar drinks are a significant contributor to that, the regulations restrict the offering of free refills of added sugar drinks including in out of home settings. Whilst out of home settings are otherwise exempt from these restrictions, this specific restriction is anticipated to contribute to a reduction in the consumption of high sugar beverages.

An assessment by Food Standards Scotland found that over 50% of out of home eating occasions included a soft drink, and that more than 30% of regular cola and other fizzy drinks were sold on promotion. Sugar containing soft drinks remain a significant contributor to sugar in the diet (contributed 9% in adults (16+) to free sugar intakes in 2021) and evidence suggests that consumers purchasing drinks under these promotions make use of the free refills, increasing free sugar intake.^[31]

There has been no evidence to suggest this approach is significantly impactful on the out of home sector or is likely to have a significant effect economically either on the sector or on individual businesses.

Locations and Price Promotion Restrictions

There is consistent and extensive evidence from a range of studies that non-price promotions (positional or placement or location promotions) influence consumer choice of food (to either purchase healthy or unhealthy products) in both retail and out of home settings.^[32]

Findings from the University of Leeds evaluation of the location restrictions in England found that, “the combined results from three retailers show a statistically significant reduction in the sales of in-scope HFSS products, as a proportion of total sales by weight and by unit volume, in stores in England, following the introduction of the legislation.” The study observed a ‘step change’ in purchasing habits after the legislation was introduced, ruling out wider cost of living being the driver for the change. This suggests that restriction of locations promotions is effective at reducing purchasing and, therefore, consumption of HFSS products.

Purchasing of food online is a growing market,^[33] a trend that accelerated due to the COVID-19 pandemic. Food Standards Scotland analysis of 2019 to 2022 data^[34] suggests 8% of retail food and drink volume in 2022 was purchased online.

Given the growth of online food shopping the application of restrictions online for placement of products would both enhance the public health benefits of the policy and ensure parity across types of business, both in physical stores and online.

Applying restrictions to physical stores and online prevents one outlet increasing its promotional activity to capture promotional sales lost by another, which would undermine the expected health benefits of the policy, including the aim to support healthier choices and healthy weight. Given many online retailers sell to customers across the UK including in England where these restrictions have been in force for online stores from October 2022, the implementation costs of this approach are not anticipated to be significant.

Industry respondents to the 2024 consultation generally agreed that the definitions given for locations promotions were clear. The majority expressed a view that the Regulations should align with those in England and Wales.

Data from around 30,000 British households between 2013 and 2015^[35] showed an estimated volume uplift for multi-buys of 25%. Given these types of promotions encourage an increase in the amount of product purchased, they can encourage increased consumption of HFSS products.

As set out in the partial BRIA, modelling was carried out on two options for identifying foods in scope of restrictions:

• Discretionary foods – the Food Standards Scotland list of foods that provide the main food and drink contributors to intakes of calories, fats and sugars
• Discretionary and additional foods – the broader range of food types as set out in the UK Regulations.

Tables 18 and 19 in Annex A set out a range of modelled scenarios on the potential costs of price promotions restrictions to retail business (discretionary foods only for multi-buy restrictions and discretionary and additional foods for multi-buy restrictions).

The modelled recurring annual cost to retail businesses of multi-buy only restrictions for discretionary foods is estimated at between £200,645 and £601,935 annually (Table 18). The recurring annual cost of multi-buy only restrictions for discretionary foods and additional foods is between £260,954 and £782,862 annually (Table 19). Whilst this modelling makes assumptions given the challenges of attempting to nutritionally assess every available product, it’s clear that the costs to business of using a broader range of food categories is unlikely to be significant. This modelling does not account for reformulation and the profit reduction modelled may therefore be smaller if, for instance, a significant number of manufacturers reformulate products to that they are no longer assessed as HFSS.

For manufacturing businesses, the modelled net reduction in profits for multi-buy and location promotions is not significantly different between discretionary foods only and discretionary and additional foods (£746,275 and £887,607 respectively). As for retail business costs, this does not account for reformulation which is evidence from evaluation in England suggests has been a significant feature of manufacturer response to regulation since 2022.

Businesses in scope of restrictions

The majority of food and drink sales occur in medium and large businesses, reflecting the dominance of supermarkets in the grocery sector. Of a total turnover of around £16.5 billion in the food and drink retail sector potentially in scope in the year 2024, almost £14.2 billion or 86% was in businesses with 50 employees or more.^[36]

The Regulations will apply to businesses with 50 or more employees ensures a significant majority of the market is in scope whilst excluding smaller retailers who may experience differential impacts as a result of their size. This strikes a balance between maximising the public health effects of the policy, whilst taking a proportionate approach for micro and small businesses that may experience high costs, relative to revenue, of complying.

Table 11 in Annex A estimates the non-recurring familiarisation costs to different business sizes of complying with restrictions. Whilst it is clear the majority of these costs are experienced by larger retailers, the costs for small and micro businesses are significantly higher relative to size. For instance, small and micro businesses in food and drink retail are only responsible for 14% of the turnover in the sector but would face 82% of the non-recurring familiarisation costs.

This analysis sets out that this modelling is likely an overestimate because larger businesses that operate across the UK will have been operating in areas where restrictions are already in force. It is anticipated that complying in Scotland, following implementation in England for instance, is likely to cost less. However, this will not be the case for small and micro businesses who are more likely to be based in Scotland.

Franchise businesses are in scope of the restrictions if the headcount of the whole franchise is 50 or more employees. Whilst individual franchises may be smaller than this total, a franchise arrangement provides franchise operators with a range of benefits including central administrative support, access to guidance and training and other support for compliance, in addition to constraint on how the franchisee operates the store, displays products and what products are available for sale.

The regulations align with the equivalent regulations in England, and cover franchise-type arrangements. Some symbol group arrangements are likely to be in scope of the definition of franchise arrangements. The Scottish Government notes the complex nature of many symbol group arrangements, and this will be a key focus of engagement with business on implementation, building on the symbol group operator guidance the UK Government that is available in England.

The exemptions from some restrictions proposed strike a balance between achieving public health aims and minimising the administrative and compliance costs which for some smaller and micro business may be relatively significant.

It may not be possible for some specialist businesses (such as chocolatiers or sweet shops) and businesses with a small floor space to avoid displaying HFSS goods in prominent locations, particularly where the majority or all of the products offered for sale are likely to be assessed as HFSS.

For practical reasons, specialist stores are exempt under the Regulations from restrictions on location promotions because including these businesses within scope would prevent them displaying products in relatively large areas of their stores that are almost solely offering HFSS products for sale.

The policy aim is intended to reduce consumption related to promotions that evidence shows are often responsible for impulse purchasing. In most instances a person entering a specialist store is intending to purchase a product and the location of HFSS products within that store is not expected to have a significant effect on purchasing behaviour. These stores will be subject to price promotions restrictions (if they are a business in scope of the regulations).

No evidence has been identified as to the share of overall food and drink purchases that are made at specialist retailers, though it is expected to be very small.

In addition to specialist retailers, the Regulations exempt store that are less than 185.8 square metres (2,000 sq. ft.) from location exemptions. Implementation of location restrictions is unlikely to be feasible in these settings given the small floor size available for product display limiting the ability of stores of this size to display products in an alternative arrangement, for instance not in front-of-store areas or by checkouts. Given the significant share of food and drink purchases that are made in larger stores, this is not anticipated to significantly reduce the public health effects of the policy.

Health Impacts

These Regulations are anticipated to contribute significantly to wider Scottish Government efforts to prevent ill health which also has a range of benefits including improving the health of the labour market through increased participation and reducing pressure on public services.

Modelling undertaken by NESTA on the potential impacts of location promotions restrictions estimated that the potential reduction in relative obesity for adults in Scotland as a result of that aspect of policy to be 16%.^[37] The modelling undertaken on one aspect of price promotions (volume based promotions) that are equivalent to part of the restrictions in these Regulations estimated that the potential reduction in relatively obesity was 1% for adults in Scotland.^[38] Whilst these figures are subject to significant uncertainty and based on assumptions about the real world effects of the policy, it suggests that the implementation of location and price promotions is likely to have a high impact on reducing obesity and overweight in Scotland at a population level.

Modelling set out in Annex A considers the potential effects of the Regulations on economic output, NHS costs, social care costs and ‘quality adjusted life years’ – a method of modelling the financial value of improved health. Over a 25 year horizon the modelling estimates the policy will generate between £2.0 - £2.4 billion of benefits in Scotland, as a result of the improvement in health resulting from reduced consumption of HFSS products.

In the 2024 consultation, the modelled costs and benefits for all options that introduced restrictions showed a significantly higher benefits compared to costs to industry and business. In arriving at these Regulations, the potential costs and benefits have been considered in addition to feedback on the practical effects of potential regulation and certain business types or sizes that might be differentially impacted by some of the options in the consultation.

In summary:

• a high proportion of the food and drink market is captured in scope of the Regulations, which is likely to achieve significant public health effect;
• for business types (specialist businesses), and sizes (those with less than 50 employees and those with a floor size less than 2000 square feet) various exemptions have been included to reduce the impact and potential costs on these businesses that may have been differentially impacted otherwise;
• all options modelled as set out in the partial BRIA showed significant benefits of restricting promotions compared to costs over a 25 year horizon – these Regulations strike a balance between achieving public health effects that are significant whilst minimising the impact on businesses where possible; and
• most businesses responded to the 2024 consultation setting out a view that the Scottish Government align with equivalent Regulations in England and Wales, which these Regulations are intended to achieve.

4.3 Summary of Costs and Benefits

The following tables (Table A and Table B) set out the modelled costs and benefits of the Regulations.