Restricting promotion of food and drink high in fat, sugar or salt: consultation analysis - SG response

Response to Feedback Raised in Public Consultation

Foods^[1] subject to restrictions

Many public and third sector respondents were keen for the restrictions to be more comprehensive, to include non-prepacked items within scope of regulations as these form a significant part of consumers’ diets.

Industry respondents also set out a view that consistency with the regulations in England was important because it would reduce costs and the regulatory burden of adhering to the restrictions. Some industry respondents set out a view that non- prepacked items should be included within the regulations to create a level playing field between the retail and out-of-home sectors.

Food categories

Following careful consideration of the feedback received to the consultation, the Scottish Government has decided that the food categories within scope of the Regulations should be those proposed in the consultation. This aligns with the position in England and Wales.

These food categories are significant contributors of calories, fat, sugar or salt to the Scottish diet, and are the food categories of most concern to childhood obesity.

Targeting these categories is therefore considered appropriate to help achieve the desired public health effects of the policy.

The food categories are consistent with those set out in the equivalent regulations for England and Wales. The Scottish Government will also be consistent with the food category descriptors set out in Schedule 1 of the UK Government regulations, as far as possible.

On a practical level, the Scottish Government recognises that consistency of approach across administrations in respect of both the food categories within scope of regulations and category descriptors will help to minimise the regulatory burden on businesses that operate across England, Scotland and Wales.

It is important to note that only foods that are high in fat, salt or sugar within these categories will be subject to promotion restrictions, as set out below.

Identifying food and drink products within scope of restrictions

Within targeted food categories, promotions restrictions will only apply to prepacked^[2] food and drink products that are high in fat, sugar or salt (HFSS) as defined by the

2004/05 nutrient profiling^[3] model (NPM). This approach is as proposed in the consultation and is consistent with the equivalent regulations for England and Wales.

The 2004/05 NPM is a recognised, evidence-based tool which is well understood by the food industry. Applying a NPM approach will allow products within food categories that are HFSS to be identified. Products which are non-HFSS within targeted categories will not be subject to promotion restrictions.

Applying the NPM to targeted foods requires availability of information on a product's composition. Further to the consultation feedback, the Scottish Government remains of the view that targeting prepacked items is the most feasible approach to help to ensure that businesses have the relevant nutritional information readily available to apply the NPM and determine whether a product falls within scope of restrictions. This in turn will support implementation of the policy.

Non-prepacked products, such as loose bakery items, will generally be out of scope of the policy at this time because businesses may not be able to apply the NPM to the product due to relevant nutritional information not being available.

The only exception is in respect of the restriction of unlimited refills of soft drinks for a fixed charge, where non-prepacked soft drinks with added sugar that are HFSS (as defined by the NPM) will be within scope of that restriction. Unlimited refill promotions are essentially a flexible form of a “buy one, get one free” multibuy. Soft drinks with added sugar alone contributed around 8% to the average intake of free sugars in children Scotland in 2024.

Price promotions

Price promotions seek to influence purchasing behaviour by prominently displaying to customers either reduced price, or reduced price per item; offering part of an item for free; or offering an unlimited volume/quantity of the product for a fixed price.

The vast majority of public and third sector respondents agreed that the definitions of multibuy and extra free were clear, and most considered the timescale of 12 months to phase out price promotions on packaging sufficient. Individuals’ views were more mixed and most considered the definition of multibuy and extra free to be clear.

Industry respondents almost all agreed that the proposed definitions of multibuy and extra free promotions were clear and noted this reflected the approach taken by UK Government for England. However, many did not feel the proposed timescale of 12 months to phase out price promotions on packaging was sufficient.

Following careful consideration of the feedback received, Scottish Ministers propose that the following price promotions will be within scope of restrictions:

• Multibuys
  • where the purchase of multiple items is cheaper than the purchase of each individual item separately. Examples include: 2 for £1, 3 for 2, buy 6 and get 25% off; and
  • where the promotion indicates that an item, or part of an item, is free. Examples include: buy one, get one free and 50% extra free.
• Unlimited refills for a fixed charge on soft drinks with added sugar that are HFSS
  • this covers promotions that offer the consumer at least one refill of the same drink or of another in-scope drink for free (including top-ups). This is on the basis that unlimited refill promotions are essentially a flexible form of multibuy offer and are not subject to the same difficulties in calculating the NPM as non-prepacked foods.

The price promotions within scope of the policy are consistent with the equivalent policy in England and Wales.

Price promotions that are within scope of the regulations and are communicated to the consumer via any means will be restricted. For example, promotions communicated via the packaging of targeted foods as well as promotions that are communicated to a consumer through associated signage, will be restricted.

The consultation proposed that promotions on packaging be phased out. Following careful consideration of the feedback received, we intend to provide businesses with flexibility to invalidate on-pack price promotions within scope of the restrictions, for example through over-stickering. This is intended to help mitigate concerns raised and minimise regulatory burden. This will be supported by clear and timely guidance to ensure all parties understand what is expected of them and their responsibilities for ensuring compliance.

Location Restrictions

The location that products are displayed can influence purchasing decisions. Key locations where the positioning or display of products may increase the decision to purchase a product, include a) at checkouts; b) at the ends of aisles; and c) at the front of store.

As set out in our consultation, 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).

Public and third sector respondents were positive about most aspects of the locations promotions restrictions covered in the proposals. Most individuals felt the definitions for in-store locations were clear and around half felt the online equivalent locations were clear.

Most industry respondents felt the in-store locations that aligned with those in place across England and Wales were sufficiently clear for implementation and enforcement with the exception of the application of entrance criteria to dedicated food areas.

The Scottish Government recognises that there may be specific considerations in terms of the implementation of store entrance restrictions for stores that offer predominately non-food products alongside a smaller food offer in a dedicated area of the main store such as a department store with a small food hall or café area within the main store. Learning from England and Wales is being actively considered and will feed into work with appropriate stakeholders to produce clear timely guidance material for Scotland that supports effective implementation and enforcement of the policy.

Following careful consideration of the feedback received, Scottish Ministers propose that the display of targeted foods will be restricted in the following prominent locations in store:

1. checkout areas;

2. end of aisles;

3. covered external areas; and

4. store entrances.

Restrictions will also apply to equivalent locations online:

1. on a home page;

2. whilst a consumer is searching for or browsing products;

3. on a favourite products page;

4. on pages not opened intentionally by the consumer e.g. pop-ups; and

5. on a checkout page.

Location restrictions will apply to prepacked targeted foods.

Our final policy position in relation to in-store and online locations is in line with the equivalent policy in England and for Wales.

Businesses within scope and exemptions

Public and third sector respondents mostly agreed the types of businesses within scope of the policy including arrangements for franchises and symbol group stores. Some felt the restrictions should be more comprehensive, including businesses with fewer than 50 staff and businesses that sell non-prepacked targeted foods. Many individuals expressed concern that the price of goods would increase to cover the additional costs to businesses of administering the regulations.

Industry respondents raised concerns about:

• deviation from regulations in the rest of the UK (e.g. inclusion of the OOH sector);
• treatment of symbol stores e.g. they should not be treated in the same way as franchises; and
• the regulatory burden on small business, with calls for exemptions (price and location) for stores under 3,000 sq ft regardless of employee number.

The Regulatory Review Group (RRG) was re-established in December 2023 to promote and develop an environment where both business and government work together to promote better regulation and sustainable economic growth by providing advice on implementation of regulation to Scottish Government.

The RRG welcomed the proposal that small businesses (less than 50 employees) would be exempt. It also set out advice that further work should be considered as to the impact for small businesses operating as part of a symbol group and where responsibilities for compliance and liability will sit.

Data confirms the vast majority of sales occur in medium and large businesses, reflecting the dominance of supermarkets in the grocery sector. Of a total turnover of around £15.9 billion in the food and drink retail sector potentially in scope in the year 2022, almost £13.3 billion or 85% was in businesses with 50 employees or more.

Restricting the promotion of less healthy food and drink is intended to make it easier for people to spend less on HFSS products and make healthier choices.

Having considered the consultation responses, Scottish Ministers have concluded that price and location restrictions will apply to qualifying businesses, including retail, wholesale outlets where there are also sales to the public, and other outlets such as clothes shops where they sell targeted HFSS foods.

A qualifying business will be a business with 50 or more employees that offers prepacked targeted foods, (and non-prepacked soft drinks with added sugar in respect of unlimited refills for a fixed charge) for sale to the public in the course of business (whether in-store or online).

Out of home businesses (such as restaurants and cafes) will not be within scope of restrictions except in relation to unlimited refills for a fixed charge of soft drinks with added sugar.

Manufacturers will not be considered a qualifying business unless they are selling prepacked targeted foods directly to the public.

The Scottish Government intend to be consistent with regulations in England and in Wales and provide exemptions from price and location promotions restrictions for some types of business (including care homes and schools) and for certain charitable activities (such as bake sales).

Concessions, which are separate businesses operating in a designated area within the premises of a qualifying business with their own payment facilities, will be within scope of the restrictions if they meet the criteria for being a qualifying business in their own right.

Franchises and symbol groups

The Scottish Government proposed that restrictions would apply to franchises or symbol groups where multiple businesses operate under the same name (where the total number of employees operating under that business name is 50 or more).

The Scottish Government undertook targeted engagement with business on proposals to include symbol groups within scope of the policy. It is clear from this engagement that being part of a symbol group can offer a variety of benefits depending on the agreements in place. For example, convenience multiples can benefit from promotions and marketing support that mitigates potential challenges around implementation, whereas independent symbol retailers may not receive the same level of administrative support. This depends on the contract entered into with the symbol group operator.

Taking into account feedback from the consultation and outputs from stakeholder engagement, the Scottish Government intends be consistent with the approach taken to equivalent regulations and guidance for England and for Wales.

The regulations will set out the characteristics of the agreements which are considered to be franchise agreements. If a business has entered into an agreement with their franchise partner or symbol group supplier which has the characteristics described, it is considered to be a franchise agreement and therefore within scope of regulations.

If a business has entered into a franchise agreement, in accordance the regulations, the size of the business will be classified by the total employees overall and not the number of employees of the individual franchise or symbol group store.

Learning from England and Wales is being actively considered and will feed into work with appropriate stakeholders to produce clear timely guidance material for Scotland that supports effective implementation and enforcement of the policy.

Exemptions from location restrictions

The consultation proposed the following exemptions for qualifying businesses from location restrictions:

• Specialist businesses with a limited product range, such as chocolatiers and sweet shops; and
• Stores with a relevant floor area of less than 185.8 square metres (2,000 square feet).

Most public and third sector respondents agreed with the exemptions proposals from location restrictions, with individual respondents expressing a mixed range of views.

Just under half of industry respondents felt the proposed exemptions from location restrictions were clear and sufficiently defined to enable implementation and enforcement. A number of additional exemptions were suggested.

The Scottish Government recognises the importance of proportionate and meaningful regulations as well as the practicalities of implementation. On that basis, and consistent with the approach set out in the consultation, Scottish Ministers propose to provide the following exemptions from location restrictions:

• from online and in-store restrictions, specialist businesses with a limited product range (such as chocolatiers or sweet shops) and
• from in-store restrictions, stores with a relevant floor area of less than 185.8 square metres (2000 square feet).

Enforcement

In feedback to the consultation and during engagement, industry and public and third sector respondents tended to support proposals for local authorities to enforce the policy whilst noting that sufficient capacity and resource would need to be made available to enable effective enforcement of the policy. This feedback largely mirrored 2023 roundtable discussions and 2022 consultation feedback.

Businesses raised concern that there is an absence of a consistent approach to enforcement in Scotland and advocated for the establishment of a Primary Authority model similar to that in England. Primary Authority is a means for businesses to receive assured and tailored advice on meeting environmental health, trading standards or fire safety regulations through a single point of contact.

Business concerns have been explored with Food Standards Scotland (FSS) as the public sector food body for Scotland. FSS have advised of longstanding arrangements in Scotland to ensure consistent application of regulatory requirements, including through the Scottish Food Enforcement Liaison Committee (SFELC). It is therefore considered that the current enforcement structures in Scotland are adequate to deliver effective enforcement of regulation of the promotions of HFSS food and drink.

Local authorities will be responsible for enforcing the policy on the basis that they have experience of similar enforcement, have local knowledge and can incorporate enforcement of the policy into other inspection visits where appropriate.

Non-compliance with the regulations will amount to a criminal offence, punishable on conviction by a fine not exceeding level 4 on the standard scale (£2,500). Using powers available under the Food (Scotland) Act 2015 in respect of offences in food legislation, local authorities will be able to issue compliance notices and fixed penalty notices as alternatives to prosecution – with compliance notices being available initially and fixed penalties at a later date.

This aligns with the enforcement regime for other offences in food law. The compliance notice procedure is already in place for other food offences – a compliance notice would require the person or business it was issued to take steps to ensure that they stop committing the relevant offence.

Fixed penalty notices would allow liability for the relevant offence to be discharged by payment of a sum of money. The fixed penalty notices option has not yet been implemented for wider food law, and the intention is that it would be introduced for offences under the promotions regulations at the same time as it is introduced for wider food legislation.

Ministers intend there will be a 12 month period between laying the regulations in Parliament and their coming into force to allow business and local authorities to prepare for regulations. This will be supported by clear and timely guidance – the development of which will provide opportunity for business representatives to engage and support the development of guidance - to ensure all parties understand what is expected of them and their responsibilities for ensuring compliance.

Out of Home (OOH) sector

The consultation proposed price and location restrictions (both instore and online) would apply to qualifying businesses, which would include qualifying OOH businesses such as:

“Cafes, restaurants, takeaways, pubs/bars, bakeries, sweet and dessert shops, vending machines, workplace canteens, hotels, mobile caterers, leisure and entertainment venues, food to go offering in retail settings, food delivery services, and places where we purchase food and non-alcoholic drinks when commuting or travelling.”

Individuals were largely against the proposals in general, with no clear view expressed around the inclusion of OOH or not. The views expressed in the 2022 consultation suggested some initial support, but this was not evident in the 2024 consultation.

In general, industry respondents favoured alignment with the regulation in England. A few, including representatives from manufacturing and industry representative bodies, commented that inclusion of the OOH sector would create customer confusion and a compliance burden for businesses. Some industry respondents felt non-prepacked items should be included within the regulation to create a more level playing field between the retail and OOH sector. OOH stakeholders commented that there is an ambiguity around the definition of OOH: that businesses providing OOH and retail services may be difficult to categorise; and that regulations may be difficult to enforce in some circumstances.

Several public and third sector respondents welcomed explicitly the proposal for the inclusion of the OOH sector in the regulations on the basis that OOH makes a significant contribution to people’s calorie intake, that people typically make several trips per week to OOH outlets, and that people from more low-income communities use the OOH sector more often. Many were keen for the restrictions to be more comprehensive and include non-prepacked items as these form a significant part of consumer diets. There was also concern that exempting smaller businesses could potentially exacerbate health inequalities due to the distribution of smaller OOH businesses in areas of higher deprivation.

There is evidence that the sale of OOH products contributes to excess calorie intake and restricting promotions in the OOH sector is a legitimate target for interventions with the aim of tackling the public health effects of diet and obesity. However, there are limitations in the currently available evidence base on which to assess and model the anticipated public health impact of restricting promotions which target only prepacked targeted HFSS foods, as opposed to all food, in the OOH sector.

The Scottish Government sought data to support assessment of the impact of including the OOH sector within scope of restrictions as part of the consultation process. However, given the prevalence of non-prepacked products sold in these establishments, and the challenge of the sector in carrying out nutrient profile modelling at this point, the Scottish Government will not proceed to restrict price and location promotions of prepacked targeted HFSS foods in the OOH sector (beyond unlimited refills of non-prepacked soft drinks with added sugar) at this stage. This approach is consistent with the regulations in place in England and in Wales.

Temporary Price Reductions, Meal Deals and Free-standing Display Units

Temporary Price Reductions (TPR)

Temporary price reductions (TPRs) are short term reductions in the price of food and drink products. Most retailers will run such offers on specific items for a typical duration of 2-4 weeks before reverting back to the full price, but this can vary.

Individuals expressed mixed views, with many against restricting TPRs on the basis that they felt it could increase food costs and have a negative impact on household budgets. Some also noted concern about negative business impacts, such as store closures.

Industry stakeholders strongly opposed restricting TPRs, primarily on the basis that the possible negative impact on business would be disproportionate to the potential public health benefits. Industry expressed a strong preference for alignment with England, on the basis of minimising regulatory burden, particularly for small businesses.

Further key points made by industry stakeholder on proposed TPR restrictions include:

• Industry argues that TPRs do not encourage volume purchase like multibuys, instead TPRs are a tool to promote brand switching and offer value to consumers;
• They reduce businesses’ ability to compete with each other and with England, especially smaller stores, brands, and Scottish brands;
• Increased administrative costs for businesses if there was divergence from the regulations in England;
• Undermine efforts to reformulate and innovate as TPRs are a key mechanism for bringing new products to market (particularly for small/local businesses); and
• Increase prices for consumers and exacerbate ongoing cost of living pressures.

Public and third sector stakeholders overall are very supportive of restricting TPRs, primarily on the basis that TPRs are the most prevalent form of price promotion and inclusion would maximise the positive public health impact of the policy. Further there was concern that if TPRs were omitted from restrictions, that this would create a significant loophole, and businesses would simply switch to offering TPRs to circumvent volume price restrictions and thus undermine the beneficial impact of the policy.

The feedback received broadly aligned with the feedback to our 2022 consultation and 2023 roundtables. Feedback to the 2024 consultation is set out in full in the consultation analysis report.

TPRs are a frequently used type of price promotion in Scotland. A survey by Food Standards Scotland in 2019 found 43% of individuals reporting that TPRs led them to make impulsive purchases.

In 2022, 20% of the annual volume of total food and drink was purchased on price promotion with 14.4% via TPRs. Online, as with overall purchasing patterns, the most common price promotion type for online purchase was TPR (18.3% in 2022). TPRs thus make up the large majority of purchases made on price promotion.

It is clear from the industry feedback received that TPRs operate differently from multibuy promotions and can serve several different functions for business.

Challenges of divergence across the UK with potential for additional associated implementation costs being passed through to consumers is a significant consideration for Ministers given current cost of living pressures. The Scottish Government will therefore not proceed with proposals to include Temporary Price Reductions on HFSS targeted foods within scope of restrictions at this time.

Meal Deals

Meal deals are a form of multibuy promotion where the purchase of multiple items is cheaper than the purchase of individuals items separately. The inclusion of HFSS food and drink within meal deal promotions may lead to an increase in consumption of HFSS products.

The consultation acknowledged there are a number of ways to target meal deals and set out three options:

• Option 1: Meal deals cannot contain HFSS targeted foods;
• Option 2: Meal deals can contain up to one HFSS targeted food; and
• Option 3: Meals deals cannot contain targeted HFSS discretionary foods.

Individuals were generally opposed to the inclusion of meals deals, tending to feel these were not unhealthy compared to multibuys on, for example, discretionary foods. Those that were in favour of option 2 tended to focus on the benefits to consumers, with this option seen as less restrictive and provided the option of an occasional treat as part of a meal deal.

Industry stakeholders were generally opposed to all options presented in the consultation to rebalance meal deals towards healthier options and favoured alignment with the UK Government’s regulations. Where a preference was selected, it was for option 2 (meals deals can contain one HFSS product). However, there was scepticism about how it could be implemented and communicated to consumers.

Public and third sector stakeholders were split in their support for either option 1 (meal deals cannot contain HFSS targeted food) or 3 (meal deals cannot contain targeted HFSS discretionary foods). Generally, there was higher support for option 1, but many felt option 3 would be a compromise that would possibly be easier to implement at this time. Public health and third sector stakeholders felt this would be preferable to meal deals not being within scope at all. Option 3 was felt to allow more flexibility around items in an evening meal deal to include, for example, dairy desserts that provide other important nutrients. Public health and third sector stakeholders were not in favour of option 2 as they felt it would undermine public health impact and be challenging to implement.

The Scottish Government commissioned a Public Health Scotland rapid review of meal deal literature in 2023 which concluded that “Given the limited nature of the evidence base, and particularly the limitations of evidence pertaining specifically to the Scottish or UK context, a firm conclusion could not be drawn about the extent of the health problem presented by meal deals. However, across the body of evidence as a whole, experts and researchers typically conclude that meal deals do drive unhealthy eating and are an appropriate target for public health policy intervention.”

Whilst it is clear that there is evidence to support government intervention in this area, it is also clear from consultation responses that there is significant complexity in how any future regulation may be implemented in a way that is deliverable by business, without potentially passing additional costs on to consumers. The Scottish Government will therefore not proceed with the restriction of less healthy meal deals at this time.

Free-standing Display Units

Foods are promoted and displayed to influence purchasing decisions. Free-standing displays are a method of promotion that places products away from other in store products to increase their visibility and appeal. These include, amongst other things, displays such as pallet stacks, gondolas, island bins and aisle units.

Individual respondents made few relevant comments specific to in store locations. Some were critical of proposals as they felt it would not make much difference to people’s shopping habits. Feedback was broadly constant across all locations including free-standing displays: around three-fifths of individuals said they felt the descriptions were clear.

Many industry respondents opposed the inclusion of free-standing displays in the location restrictions and expressed a preference for consistency with the regulations in England. Two thirds of industry respondents did not consider the description of free-standing displays to be clear, suggesting it was considered too broad or vague, which could lead to issues of interpretation for businesses and inconsistent enforcement. Some suggested that location restrictions are easier to implement (i.e., for retailers) and enforce (i.e., for enforcement agencies) if they relate to space in a store, rather than a type of display.

Public and third sector respondents were positive about most aspects of the locations promotions restrictions covered in the proposals. Some were particularly supportive of including free-standing displays to ensure the restrictions are as comprehensive as possible and avoid loopholes. Four-fifths of public and third sector respondents said the description for free-standing displays was clear.

The Regulatory Review Group (RRG) set out reservations that proposals may pose a challenge to smaller premises with less flexibility in terms of space. The RRG also reiterated industry concerns that free-standing displays may be difficult to define within regulations and definitions should be explored with industry experts prior to any guidance being developed.

Having considered the feedback received, the Scottish Government considers that there are benefits of aligning with the location restrictions introduced by the UK Government, to minimise regulatory burden. The Scottish Government will therefore not proceed with the restricting the placement of HFSS targeted foods on free- standing displays at this time.