Katherine Rich: new Govt means busy year ahead
13 February 2018
I’m picking 2018 to be the busiest year in the food and grocery sector for some time. That’s mainly because we’ve got a new government with new polices, new ministers, and new approaches.
During the election campaign, and even before it, the parties that make up the new government were talking about their wish-list of changes – from tackling obesity, changing food labelling, and taxes on ingredients and bottled water, to environmental initiatives, flagging the movement of the minimum wage to $20 over time, and promoting trade. All of them will affect the FMCG sector one way or another, be it via changes to manufacturing processes, an impact on costs, or access to markets.
Though the Government has started at pace, there was little for the FMCG sector in its first 100 days. But that’s going to change once we get past that target, and I’m picking there’ll be plenty for us to ponder in the second and third 100 days.
Some of the coalition parties talked about a tax on sugar as one of the favoured ways of tackling obesity. This is a contentious issue, which the Food and Grocery Council opposes because it’s done little, if anything, to reduce obesity anywhere in the world it’s been tried. In Mexico, which introduced a 10 per cent tax on sugary drinks, consumption was back to pre-tax levels within a year, and all that was achieved was a lot of extra income for the government.
Despite our doubts about sugar and other food taxes, we’ve made it clear we’ll work with this Government to provide information and advice on the obesity issue. Our members are committed to building on their work of recent years to reformulate and innovate products to offer more and healthier choices by lowering levels of sugar, salt, and fat, and to support education on this in schools and the community.
There are now more healthier options available than there have ever been, and we want to continue that. Companies will continue to embrace the roll-out of products that carry the Health Star Rating logo which number more than 3500 on shop shelves, 1800 of them industry labels, the remainder supermarkets’ own brands and non-FGC brands.
There is likely to be further pressure on the Government to consider requiring food labels to show the amount of added sugars in products, though like the Mexico tax this sounds much better than it actually is. Our bodies metabolise all sugars in the same way, whether they are naturally present in ingredients or are added, so it would add nothing to consumer knowledge.
Country of origin labelling will likely get a further airing, with Parliament studying a Green Party bill requiring such labels on single-component foods. If not impossible, then it could be very costly to require this on products that have to come from different sources, depending on the season, price, and availability. It’s relatively straightforward for some, but not for aggregated and blended products such as coffee, tea, sugar, flour, custard powder, pepper, cooking oils, oats, spices and rice. The effect on the shelf price could determine the outcome there.
Aside from regulation and legislation, FGC will be busy continuing to work closely with the major retailers on a variety of fronts, including supply chain issues, health and safety, and ensuring ready and open communication channels with suppliers.
We will also work with members to make sure they’re up to date with all the requirements of the new codes of advertising food to children. Companies are very careful in this area now, and we want to make sure there are no gaps.
Finally, FGC intends being more active in the South Island this year. We have a good number of members there, but realise it would be good to build on that so we can hold South Island-specific events. To that end, we have appointed Jo de Joux to work on our behalf to talk to companies that may see the benefits of joining the industry’s peak body.
[as published in FMCG Business, December-January 2017/18]