10. Impact and support (Qs 14-16)
10.1. One purpose of the consultation was to help inform the development of a Business and Regulatory Impact Assessment and a Health Inequalities Impact Assessment (which includes within it an Equality Impact Assessment). In respect of the Business and Regulatory Impact Assessment, questions 14 and 15 assessed the impact that the policy would have on the sale, distribution and/or manufacturing of discretionary foods as well as what implementation support is needed. For the Health Inequalities Impact Assessment, question 16 sought views on how the proposed restrictions would impact particular groups of people.
Question 14: If you sell, distribute or manufacture discretionary foods, please comment on how the restrictions in this consultation paper would impact you.
10.2. In total there were 56 specific responses to this question (i.e. excluding blanks, ‘N/A’, ‘no comment’, ‘don’t know’ and general ‘no restrictions’ answers).
Non-industry and individual views
10.3. Four of the respondents were from public and third sector organisations noting that they would need to make changes to food outlets, canteens and vending machines.
10.4. Twenty-five responses were from individuals with most flagging various negative impacts. Of these, many suggested there would be a negative impact on business sales and profits and few noted concern for small businesses. These responses should be treated with caution however, as it is not known whether these individuals are drawing on any relevant experience or knowledge.
10.5. Of the 39 industry organisations that responded to the consultation, 27 responded to this question - 14 manufacturers, 7 industry representative bodies, 5 retailers and 1 Out of Home provider.
10.6. Most industry organisations that responded noted the introduction of the proposed measures would have a significant impact on the way the industry operates, and few noted that they are coming at an exceptionally challenging time for the industry.
10.7. There was an exception to this, with one large industry organisation describing the impact as ‘slight’, only impacting on some of their products. It was noted that the type of promotions subject to restriction are a relatively small proportion of their overall marketing approach. The main impact they noted was the limiting of their ability to market certain products to customers and particularly with regard to new products.
Views of industry representative bodies
10.8. The responses from the industry representative bodies included the following points (each made by few):
- The measures proposed would have a significant negative impact on retailers’ turnover and therefore their ability to operate, run and maintain viable businesses in Scotland. They noted that wholesalers and organisations that specialise in discretionary products report that as a consequence of the approach significant staff redundancies could be incurred;
- It was suggested that small Scottish manufacturers’ ability to introduce new products to the market could be stifled through restriction of low cost marketing tools. It is anticipated that small local manufacturers would be impacted more than large companies with big marketing budgets that could adapt;
- They noted that wholesalers report that it is impossible to accurately assess the impact without greater clarity on definitions. However, an industry representative body estimates the proposals could take up to £305 million out of the Scottish wholesale sector; and
- It was suggested that additional costs would be incurred due to a lack of a joined-up approach across the UK. For example, wholesalers may have to hold dual stock without a unified approach.
Views of manufacturers
10.9. The responses from manufacturers included the following impacts (each made by few):
- Small Scottish manufacturers, brands and local and craft producers felt that they would be put at a competitive disadvantage. Some reported it would impact fundamental business, growth plans and their workforce;
- One small manufacturer described how small brands rely on the affordable marketing methods that will be restricted in Scotland, which disrupts shoppers’ usual habits. Without these available, they anticipate that one of their factories involved in the production of discretionary products would likely close, with the loss of ten jobs;
- Restrictions on promotion would result in devaluation of brand;
- Compliance will be costly – simple labelling changes can cost thousands of pounds. It was suggested that compliance would impact on businesses’ operations and ability to invest;
- There will be reduced incentive to reformulate products in line with reformulation programmes and there would be risk of stalling the success of these calorie reduction programmes;
- There will be no incentive to bring reformulated soft drinks to the Scottish market; and
- One manufacturer anticipated that if there were not sufficient exemptions for specialist confectionery stores, the business case for a proposed own-brand store in Scotland would be undermined.
Views of retailers
10.10. The responses from retailers included the following impacts:
- One large retailer highlighted how the proposals would prevent them from discounting a meal deal, which according to government guidelines is a ‘healthy’ lunch. They indicated that the cost of the items separately would be double and demonstrated how a lunch with a higher calorific value could still qualify for the meal deal. As a consequence of the restrictions, customers would have to pay more, and there would be significant confusion for colleagues and customers; and
- Another large retailer noted that they had spent many years promoting the Scottish food and drink sector, but the restrictions would significantly restrict their ability to do so in the future.
Implementation Support for Business
Question 15: What support do sellers, distributors and manufacturers need to implement the restrictions effectively?
10.11. In total there were 245 specific responses to this question (i.e. excluding blanks, ‘N/A’, ‘no comment’, ‘don’t know’ and general ‘no restrictions’ answers). Of these 194 were from individuals and 51 were from organisations (of which 26 were non-industry organisations and 25 were industry organisations).
Views of individuals
10.12. Many of the individuals that responded felt that clear guidance would be needed for industry on what is encompassed within the restrictions, why restrictions are needed, what changes they will need to make, how restrictions will be enforced and what the penalties are. More specific suggestions from few also included providing online resources, a helpline and one to one consultation and support for small businesses not only on how to implement the changes but also on how to maintain sales and profit via alternative methods. Financial support to implement changes or develop alternative products and promotions was also suggested by few.
10.13. Few individual respondents believed that no support should be provided, predominantly on the basis that if the rules are clear, the onus should be on industry to make any necessary changes without any further costs of additional support funded by taxpayers.
Views of organisations
10.14. Many of the organisation respondents that gave a view on the topic thought that the Scottish Government needs to ensure that industry partners and members of the public understand the need to implement change and support plans to do so. One third sector respondent highlighted that it would be important not to lose the commitment and goodwill from the Small or Medium Enterprise (SME) sector and this could be achieved by providing support and flexibility. Retailers and manufacturers require clear practical obligations that can be put into place - for example specific details regarding the definition of foods included in restrictions.
10.15. In regards to resources, few public sector respondents felt that sector specific guidance needs to be produced, in collaboration with industry, which is available in different languages and online. Few non-industry organisation respondents noted resources should include examples of good practice, and use visual graphics to demonstrate restrictions. Few organisation respondents noted that as small independent businesses are likely to find implementing changes more challenging, resources should focus on their needs. In addition to dissemination of resources to Scottish manufacturers and retailers, few industry representative body respondents and few manufacturer respondents highlighted that resources would need to be disseminated to food and drink manufacturers across the UK who supply to Scotland.
10.16. Few organisation respondents indicated that a well-resourced training and awareness programme is needed for retailers and manufacturers. They felt that local workshops should be provided and respondents anticipated that accessible, visible on-site support should be available where requested and email and telephone support should be available. In addition to guidance on implementation, training should include components on healthier options and how to market them, and awareness raising of the implications of non-compliance. It was flagged that training will also be required for enforcement officers, and enforcement bodies will require clear and detailed guidance provided well in advance of implementation.
10.17. Few organisation respondents highlighted that further clarity on issues was needed before they would be able to comment, and few, that independent research should be conducted to assess what is required.
10.18. Other support requirements, suggested by few, included:
- Clear guidelines would be needed especially for non-packaged food and food sold by the Out of Home sector; and
- An appropriate length of time to plan and implement changes, which the industry should be consulted on.
Health Inequalities Impact
Question 16: How would the proposed restrictions impact on the people of Scotland with respect to age, disability, gender reassignment, pregnancy and maternity, ethnicity, religion or belief, sex, sexual orientation or socioeconomic disadvantage? Please consider both potentially positive and negative impacts, supported by evidence, and, if applicable, advise on any mitigating actions we should take.
10.19. In total there were 429 specific responses to this question (i.e. excluding blanks, ‘N/A’, ‘no comment’, ‘don’t know’ and general ‘no restrictions’ answers). Of these 373 were from individuals and 56 were from organisations (of which 41 were non-industry organisations and 15 were industry organisations).
No impact view
10.20. Few individual respondents and few public sector respondents felt that the suggested approach targeted all equally and that there was no greater disadvantage to any given group. Few non-industry organisation respondents suggested that separate research/expert input was needed to determine the impacts on the groups listed.
Potential positive impacts
10.21. Some respondents (some individuals and some non-industry organisations) reported potential positive impacts. Nearly half of whom reflected that there would be health benefits for everyone, while few noted specific health benefits to people experiencing socio-economic disadvantages who were considered to be most susceptible to promotions and for whom discretionary foods were thought to make up a larger part of their diet. Few (individuals and one public sector respondent) noted the specific benefits to children who due to the restrictions would be less likely to grow up with weight management issues and consequently less be likely to suffer from obesity related diseases.
Potential negative impacts
10.22. Many respondents to the question (across all respondent types) reported potential negative impacts. By far the greatest concern, flagged by many (across all respondent types) was the likelihood of the restrictions impacting on people who were already socio-economically disadvantaged. Most respondents that held this concern (individuals, some industry organisations, and some non-industry organisations), suggested that since discretionary foods are cheap and the purpose of the policy is to restrict promotion of these items, this would make food shopping more expensive. They thought this would have greatest impact on those on low incomes who may rely on the types of promotions targeted and who are more likely to consume large amounts of these products as a cheap way of meeting their calorie needs. One manufacturer respondent highlighted concern that the restrictions would result in socio-economically disadvantaged groups having a reduced ability to identify value.
10.23. Few individual respondents and few non-industry organisation respondents highlighted that with these restrictions in force, those on low incomes would still lack the knowledge and/or motivation to make healthier choices, and would therefore still buy these foods, but would simply be poorer as a result. Few public sector respondents noted that this would further levels of disadvantage and create a two-tier system where only those who can afford to would have access to full dietary choice.
10.24. Suggestions to mitigate this issue, each expressed by few individual respondents and few non-industry organisation respondents, encompassed:
- Educating people on how to cook healthier meals cheaply;
- Educating people on what foods are healthier;
- Educating people about the reasons for the restrictions and the damage caused by the overconsumption of discretionary foods, to raise awareness of the need to switch to healthier choices;
- Reducing the costs of healthy foods; and
- Providing promotions on healthier alternatives.
10.25. Other groups that respondents thought may potentially suffer negative impacts included:
- Ethnic minority groups – few individuals and public sector respondents suggested that many takeaways are run by ethnic minority groups such as Chinese and Indian takeaways and therefore they may be disproportionately affected by a reduction in sales. There was also suggestion that some ethnic minority foods do not fit as clearly in to the discretionary categories listed and any misunderstanding of the requirements may leave them increasingly likely to suffer penalties for non-compliance;
- Disability – few individual respondents thought that positioning restrictions may affect access to certain foods for those with a physical disability;
- Medical conditions – few individuals and one ‘other’ organisation respondent noted that certain medical conditions are managed via the consumption of products that fall within the discretionary definition and that it is unfair for costs to be increased when they are consumed for medical reasons and not due to poor dietary choices;
- Those with special dietary requirements – few individual respondents suggested that if promotions on specialist foods (such as gluten free, vegan etc.) are restricted, these may be made more expensive, but since there is already limited choice/availability of these foods, consumers cannot buy alternatives and consequently will have to pay more;
- Elderly – few individuals, one third sector and one industry representative body respondent suggested that they may be likely to obtain larger amounts of their calorie intake via consumption of discretionary foods and as a result their food costs would be more expensive under the approach; and
- Religion – few individual respondents noted that the restrictions may affect the purchase of foods required at celebration times or in relation to religious beliefs.
10.26. Mitigating actions were rarely offered for the impacts noted above.
10.27. Few individual and few organisation respondents suggested there was a need to undertake work with relevant groups to determine what the impacts may be, and to consider whether the approach was still appropriate and, if so, find ways to redress the impacts or create appropriate exemptions.