Food & Drink -
Obesity
By Michael Harrison
Cadbury Schweppes, the UK soft
drinks and snacks giant, is the European food
manufacturer most at risk of being sued by
consumers claiming that its products contribute
to obesity, according to a research report by JP
Morgan. The maker of Jelly Babies, Dairy Milk
chocolate, Dr Pepper and Slush Puppie, ranks
second only to America's Hershey corporation in a
league table compiled by the US investment bank
of food producers exposed to obesity-related
lawsuits. Growing concerns that the food industry
will go the same way as tobacco and face a
barrage of crippling damages claims forced Kraft,
the world's second-biggest food manufacturer, to
announce earlier this week that it is cutting the
amount of fat and sugar in its products and
reducing the size of portions.
The JP Morgan research says that the rise in
obesity to "epidemic" proportions, with
more than 1 billion of the world's population
overweight, poses a serious threat to the food
industry. It increases the risk that advertising,
labelling, and distribution will be more tightly
regulated and it will force manufacturers to
overhaul their marketing practices and spend more
on consumer education and research. "This is
not good news for volume growth or margins,"
says the study. Two lawsuits have been filed
against McDonald's since summer last year
claiming its products contributed to obesity and
although the first case was dismissed, the second
is still ongoing. JP Morgan's London-based
analyst Arnaud Langlois said, "We believe
one thing is certain - well capitalised law firms
with a wealth of experience in tort action
lawsuits in tobacco and asbestos will continue to
target the deep pockets of the food
companies."
The research lists Hershey, the US manufacturer
of the eponymous chocolate bar, as most exposed
to the obesity risk, followed by Cadbury,
Coca-Cola, PepsiCo and Kraft, which is owned by
Philip Morris. Unilever, the Anglo-Dutch food
giant behind brands such as Pot Noodle and Findus
beefburgers, ranks 11th. JP Morgan says 88 per
cent of Cadbury's group sales fall into the
category of "not so healthy" food
compared with 95 per cent for Hershey and 23 per
cent for Unilever. "Among the European food
players, Cadbury is most exposed to obesity
concerns. This is the result of its large soft
drinks, sugar and chocolate confectionery
business," says the research.
However, it says some food companies could
benefit by being seen as a "hedge"
against obesity because of the perceived
healthiness of their products. The research lists
the French yoghurt manufacturer Danone top of the
league, with 80 per cent of its food products
classed as "healthy". Unilever ranks
10th in this list with 61 per cent of its food
range deemed to be in the "healthy
category". The number of obese people in the
world has risen by 50 per cent in the past seven
years and globally there are estimated to be 300
million obese adults. In the US, 30 per cent of
adults are obese while in Europe, 135 million
people are affected by obesity.
A battle is raging between the food lobby and
health experts as to whether the cause is
increased consumption of unhealthy foods or lack
of exercise. A spokeswoman for Cadbury's said,
"We regard obesity as a very important
social issue and we are working with the
Government and the World Health Organisation to
develop ways to tackle it. One of the main causes
seems to be lack of exercise whereas calorific
consumption levels are dropping in the UK."
Home
These articles
have been collected from various sources. If you
are the copyright owner of any of them, contact us for
either a credit and link to your site or removal
of the article.
--------------