Australian Junk Food Industry
LiveLighter’s Key Messages
- The frequency with which Australians consume energy dense, nutrient poor junk foods is a major concern. Overconsumption of junk foods contributes to chronic diseases including overweight and obesity and, through displacement of core foods, also contributes to nutrient deficiencies.
- A very large number of processed junk foods are sold in an abundance of locations in Australia, and are heavily marketed and promoted.
- The junk food industry plays a significant role in preventing implementation of policies and regulatory initiatives that may impede upon sales of unhealthy foods.
- The advertising and marketing of junk food to children is a political and ethical issue that has serious consequences. Urgent legislative action is required to address the deficiencies of the current self-regulatory and voluntary system.
- Contrary to public health outcomes, the junk food industry is directly and indirectly subsidised by governments in Australia.
What is junk food?
The food industry manufactures products that are often energy dense and nutrient poor, high in salt, saturated fat and sugar, and heavily marketed and promoted, encouraging high levels of consumption.
‘Junk foods’ are encompassed by the term ‘discretionary foods’ as used in the Australian Dietary Guidelines (the ADG). Discretionary foods are those that are ‘not necessary to provide the nutrients that the body needs, many of which are high in saturated fat, sugar and/or salt, and are therefore described as energy dense.’[i] Examples of discretionary foods provided by the ADG – crisps, pies, cakes, biscuits, processed meats, commercial burgers, pizza, potato chips, lollies, sugar-sweetened drinks – are almost exclusively foods that are considered to be highly processed.[ii]
Many foods sold in Australia undergo some sort of processing, such as canning, freezing, cooking, salting, smoking and milling to extend shelf life, improve flavour, extend seasonal availability, or to make them easier to transport.[iii] While some processed foods can be eaten as part of a healthy diet, such as frozen fruit, canned tomatoes, rolled oats, and pasteurised dairy products, there are a wide range of highly processed or ‘ultra-processed’ products that are largely unhealthy.[iv] Ultra-processed foods are defined as those foods that are:
‘Characteristically reformulated from refined and purified ingredients freed from the fibrous watery matrix of their raw materials. They are formulated, with the use of sophisticated mixtures of cosmetic and other additives, and state of the art craft packaging and marketing, to be sensually appealing, hyperpalatable and habit forming. These foods are also convenient in that they are ready to eat or ready to heat.’[v]
The term ‘hyperpalatable’ is used to describe foods that contain a blend of layers of salt, fat, sugar, flavourings and additives to provide consumers with greater physiological and psychological rewards than unprocessed foods.[vi] Fat, salt and sugar are regarded as the ‘three points of the compass’ that the food industry aims to hit when creating products and dishes.[vii] The food industry relies upon our primal cravings for sugar and fat, and makes a hefty profit because these ingredients are cheap and plentiful.[viii] Food and flavour chemists are employed to generate products that most effectively draw on these primal cravings, seeking to bypass the rational processes that generally protect people from harming themselves.[ix] Larger food companies have more money available to spend on food chemistry research, resulting in fewer companies taking up more of the processed food market share.[x]
Availability, Consumption and Profit
An abundance of processed junk foods
The widespread availability of relatively inexpensive junk foods, in conjunction with the advertising and marketing used to promote them, results in an obesogenic food environment that encourages a high energy intake and influences social norms around food.[xi]
Over the last 50 years, the number of processed foods in supermarkets has increased dramatically. Whereas there were typically between 600 and 800 foods available in the 1960s, there are now around 30,000 items in a standard supermarkets, with many aisles devoted to highly-processed foods such as sweetened drinks, confectionary, savoury snacks, cakes, pastries, sugary breakfast cereals and bars.[xii]
Processed foods are widely available in a huge variety of locations, such as petrol stations, sporting venues, convenience stores, vending machines, at the counters of retail stores, at leisure centres and newsagents. [xiii] In some of the above locations, processed foods form the greater majority of items available, making it difficult for busy customers to find less processed and healthier options.
Unhealthy consumption levels
Processed junk foods present a major health issue in Australia due to the frequency with which they are consumed.
The ADG recommends that discretionary foods be consumed ‘only sometimes and in small amounts.’[xiv] The World Health Organization also recommends that total fat should not exceed 30% of energy intake (mostly unsaturated fat), and that intake of free sugars be limited to less than 10% of total energy intake, with a reduction to less than 5% suggested for additional health benefits.[xv] These recommendations are based on evidence that these foods are associated with increased risk of obesity and/or chronic diseases, including cardiovascular disease, type 2 diabetes and/or some cancers. However, the average Australian adult obtains 36 per cent of their total daily energy requirements from discretionary foods,[xvi] with only 49.8 per cent of adults eating the recommended 2 or more serves of fruit, and only 7 per cent eating the recommended five serves of vegetables. A mere 5.1 per cent of adults meet both guidelines. [xvii] Similar to the intake of adults, only 5.1 per cent of children met both guidelines.[xviii]
While it is clear that nobody is going to suffer as a result of genuinely occasional consumption of discretionary foods, there has been a gradual shift towards diets containing more processed foods, at the expense of consumption of healthy, unprocessed core foods.[xix] There is clear evidence that this displacement of healthier foods creates dietary patterns high in energy but deficient in micronutrients,[xx] contributing to overweight and obesity [xxi] and also to folate and iodine deficiencies across age groups and genders throughout Australia.[xxii]
Coinciding with these changes has been a decline in food prices, enabling consumers to purchase more kilojoules than ever before.[xxiii] The low cost of energy-dense, nutrient poor foods relative to nutrient dense foods plays a major role in the increased energy intake that contributes to overweight and obesity.
In the United States, the five most commonly consumed foods are regular sugary soft drinks, cakes and pastries, burgers, pizza and potato chips. In Australia, within the discretionary food category, the most popular foods are cakes, soft drinks, chocolate, pastries and processed meats.
Junk food companies have also generated a way to have their cake and eat it too, by simultaneously marketing both obesity causing and obesity solving foods. For example, the Australian arm of transnational company Goodman Fielder[xxiv] produces and markets both obesity causing products such as White Wings cake and biscuit mixes, as well as ‘obesity solving’ Helga’s lower carbohydrate bread, along with a ‘Carbdown’ meal plan.[xxv]
A highly profitable industry
The profitability of highly processed foods is multifaceted. As noted above, processed foods are often made in such a way as to contain fat, sugar and salt, which inevitably taste good to consumers, generating a ‘wanting’ for the foods, encouraging them to buy and eat more.
Processed foods are profitable in that the fat, sugar, salt and refined starches used are inexpensive, however this is not always reflected in the cost of the item. [xxvi] In some cases, these cheap substitutes are added to foods in order to dilute more nutritious and more expensive ingredients, as is the case with sausages and burger patties, which may appear to be less expensive, but contain more starches, fat and salt, and less beef. [xxvii] Processed products are also often manufactured in increasingly supersized packages and servings at discounted prices with no loss to the manufacturer.[xxviii]
Advertising and packaging of processed foods also contributes to their profitability, with a significant proportion of the cost of an item often assigned to packaging and marketing. In many cases, as little as 10 per cent of the budget for the processed food item is spent on the ingredients, with 50 per cent spent on packaging, and 40 percent spent on marketing.[xxix] In this respect, it is clear that it is difficult for fresh and unprocessed foods to compete, as they have no packaging, no ‘value padding’ and often no budget for marketing or promotion.[xxx]
Advertising, marketing and Sponsorship
Marketing and health claims
Consumers are encouraged, through marketing and promotions, to view highly processed foods as an integral part of life, and part of a healthy diet.[xxxi] Some products that are fortified with micronutrients are marketed as beneficial to growth, health and well-being, while others are marketed as an integral part of the ‘good life’ by using promoting the product in the context of leisure time and socialising.[xxxii] Advertising for processed foods is observed to glamourise overconsumption, induce snacking instead of regular meals, promote eating while watching television and discourage cooking and eating of proper meals.[xxxiii]
As noted above, a significant proportion of the money spent by manufacturers on a product is on marketing and packaging. Many highly processed foods that are lacking in nutrients are advertised and marketed as healthy. Manufacturers create this façade by using terms such as ‘light’, ‘premium,’ ‘supplemented’, and ‘fortified’ on labels, by making references to herbs or other ‘nature identical’ ingredients, or by using ‘homely’ or ‘country’ images on the packaging.[xxxiv] Further, some products are advertised as ‘better for you’ on the basis that a product which contains high levels of fat, sugar and/or salt has been reformulated to either contain less of these problematic macronutrients, or to include more dietary fibre.[xxxv]
A third category of processed food products is those which offer no nutritional benefit and about which no health claims can be made. These foods are marketed as ‘fun,’ with marketing techniques portraying glamour, similar to advertisements for tobacco products of previous generations.[xxxvi]
Shifting the Blame – Sponsorship and social corporate responsibility
Sponsorship of sporting and other events and philanthropic corporate social responsibility measures have many benefits for food companies, including painting themselves as ‘part of the solution to the obesity crisis.’[xxxvii] Over the last two decades, food companies have been increasingly engaging in a range of ‘social corporate responsibility’, ‘corporate citizenship’ and stakeholder management activities whereby money, personnel and equipment is provided to other organisations.[xxxviii] Sponsorship of sport is growing as a popular means of marketing, on the basis that sponsorship activities are able to simultaneously increase brand awareness, image and sales.[xxxix]
Sponsorship of sporting activities seeks to borrow from the ‘feel good’ aspects of sport[xl] in that inherent positive values from the activity are transferred to the sponsor or product.[xli] This ‘health-washing’ measure is particularly effective given that the images generated by sport.[xlii] For example, a food company might sponsor a motorsport event on the basis that it is glamourous, exciting, colourful, dangerous and youthful.[xliii] Sports sponsorship also works to generate excitement and emotional attachment among consumers.[xliv] As sport is also regarded as an important part of Australian culture,[xlv] corporate associations with sport can assist food companies to reinforce their place as an essential element of the everyday lives of Australians.
In funding educational resources, physical activity initiatives, scientific research and marketing campaigns, food companies are seeking to divert the public’s attention away from the less agreeable, ethical and/or healthy practices of the companies involved.[xlvi] Involvement with physical activity initiatives also works to shift the focus away from the role that a food company’s unhealthy junk food products play in overweight and obesity, emphasising the physical activity aspect of the energy imbalance equation.[xlvii] Physical activity initiatives reinforce the message that food companies want their customers to move more rather than eat less.[xlviii]
Supermarkets – The effects of design and in-store promotion
Australia has one of the most concentrated retail food sectors in the developed world, and the two major supermarket chains share almost 80% of the packaged grocery market.[xlix]
Supermarkets undertake sophisticated research into consumer psychology to develop a wide range of tactics that encourage consumers to buy more highly processed junk foods.[l] Shoppers are manipulated using the following techniques[li]:
- Placement of staple foods on opposite ends of the store
- Staples sold at or below cost price to attract shoppers into the store, where they will inevitably buy additional products.
- Use of music to control pace, with the optimal tempo being fast enough to keep shoppers moving through the aisles, but slow enough to encourage unplanned purchases.
- Placement of fruit and vegetables near the door, to create an illusion of a healthy food outlet.
- Use of multi-buy discounts and larger packets to encourage customers to buy more food.
While most shoppers are unaware, supermarkets undertake sophisticated research, including the use of tracking devices on shopping trolleys, as a means of obtaining information about typical in-store movement patterns and length of visit.[lii]
Advertising and marketing to children
The advertising and marketing of junk food to children is a significant political, ethical and legal issue that has commanded a great deal of attention in Australia and internationally. Advertising of junk that is particularly directed to children is of even greater concern, given that children may not properly understand or interpret marketing messages, or recognise that their intent is to entertain and persuade, rather than inform.[liii]
In January 2016, the WHO issued the ‘Ending Childhood Obesity’ report. This report states that given unequivocal evidence that marketing of unhealthy food and drink is related to childhood obesity, exposure of children to such marketing and advertising is a major issue that demands change.[liv] Despite comprehensive recommendations having been made by the WHO since 2010[lv], and the issue having been considered at a federal level on a number of occasions, [lvi] Australia’s system for protecting children from unhealthy food and advertising remains comprised of a complicated web of weak self-regulatory and voluntary codes.[lvii]
Techniques used by food companies to advertise to children have become progressively varied over the last decade, with television advertising being gradually complemented by an increasingly sophisticated and multifaceted mix of marketing communications that focus on branding and building relationships with consumers.[lviii] The broad range of advertising strategies now used by food companies include[lix]:
- Sponsorship of a variety of events, including children’s sporting activities
- Product placement in films and television shows
- Toys and prizes with products, especially fast food meals
- Cross promotions using celebrities and athletes
- Brand mascots and characters popular with children
- Websites and advergames
- Labelling and point-of-sale displays
- Emails, SMS and other social media messaging
- Philanthropic activities tied to branding opportunities
- Social media, especially Facebook pages and YouTube.
Today’s advertising and marketing to children tends to be pluralistic and integrated, with products being advertised using multiple messages across several channels of communication.[lx] In Australia, food companies take advantage of the lack of clear definitions of key terms such as ‘unhealthy food’ and ‘directed to children’, the lack of regulation across all forms of media, the lack of television regulation during children’s peak viewing times, and absence of an adequate system for monitoring, review and compliance.[lxi] There are multiple instances of recent decisions across several different codes that have demonstrated the ineffectiveness of the current self-regulatory system.[lxii]
In accordance with the Commonwealth Guide to Regulation[lxiii] continued self-regulation is not a viable option on that basis that:
- There is no incentive for the industry to comply with its own rules.[lxiv]
- Self-regulation may create public concern where perceived conflicts of interest could threaten safety (here to the health of Australian children).[lxv]
- Self-regulation should not be undertaken where previous have failed.[lxvi]
In order to address this issue, urgent government led reform is needed to develop comprehensive regulation. We recommend adoption of the comprehensive blueprint developed by the Obesity Policy Coalition which includes clear definitions of key terms (especially the term ‘unhealthy food’), applies to all forms of advertising, media and locations of marketing, restricts advertising content and placement, ensures compliance is regularly monitored and includes meaningful penalties.[lxvii]
Industry and the Government
In many countries, large food and drink companies are known to enjoy a range of government subsidies on ingredients such as processed oils, starches, sugars and water.[lxviii] In Australia, food companies receive subsidies that are contrary to public health outcomes from both state and federal governments.[lxix]
While recent discussions around Australia’s taxation system have canvassed several unsatisfactory proposals, such as removal of the GST exemption on basic foods, costs incurred by the junk food associated with advertising, marketing and sponsorship are tax deductible .[lxx] In this respect, Australian taxpayers are effectively subsidising the advertisements for junk food and sugar sweetened beverages, which is effective in encouraging us to buy more of these products.[lxxi]
Food companies may also be eligible to receive the AusIndustry research and development tax concessions, which allow a deduction of 125% of the company’s R&D expenditure when lodging their tax returns. The concession is designed to encourage industries to conduct research and development with a view to boosting competitiveness and improving productivity across the Australian economy.[lxxii] For example, Buderim Ginger has been the recipient of a research and development grant to assist the company to make ginger products, including Ginger Bears (described as ‘Ginger Jubes with BITE’).[lxxiii]
Food industry concessions and tax breaks aside, Federal and State governments in Australia also effectively subsidise the industrialised food system through payment of hidden costs. Food corporations produce junk foods, make significant profits, and then the government is left to pay the raft of healthcare costs of associated overweight and obesity.[lxxiv] The price tag of a fast food burger does not include the costs associated with resulting heart disease, diabetes and cancer, nor does it cover the environmental costs.[lxxv]
Industry power – the Australian Food and Grocery Council
In order to avoid the imposition of regulation or policy measures that reduce sales or profits, the food and drink industries in Australia are known to engage in extensive lobbying of federal and state governments.
The Australian food, drink and manufacturing industry is Australia’s largest manufacturing sector, accounting for $111 billion and almost one sixth of jobs.[lxxvi] 80% of the dollar value of food sold in Australia goes to companies represented by the Australian Food and Grocery Council (AFGC).[lxxvii] The AFGC’s objectives are to help shape a business environment that encourages the food and grocery products industry to grow and remain profitable in a socially responsible manner.[lxxviii] The AFGC states that the ‘minimum necessary regulations [should be] imposed, and only where necessary to correct market failure,’[lxxix] and that any regulatory approach should be ‘valuable to consumers, providing choice through meaningful labelling and product differentiation in the market.’[lxxx]
The AFGC has been seen to shape Australia’s regulatory environment through representation on government committees and working groups, through submissions to government enquiries and through involvement with industry centric initiatives, such as the Food and Health Dialogue.[lxxxi] The AFGC’s role in influencing Australian food policy is best demonstrated by recent involvement in the shaping of the federal government’s front of pack labelling policy.
Package labelling is regarded as one of the least contentious areas of food policy, on the basis that it is broadly consistent with the food industry’s own libertarian position on obesity, allowing reconciliation of personal responsibility and environmental approaches to unhealthy eating.[lxxxii] One tactic employed by industry to avoid government intervention is the adoption of pre-emptive self-regulatory schemes.[lxxxiii] This can be seen with the AFGC’s introduction of the ‘Daily Intake Labelling Scheme’, in November 2006, just one month after front of pack labelling reached the Australia New Zealand Food Regulation Ministerial Council.[lxxxiv] This scheme did not meet the Blewett Report’s requirement for an ‘interpretive’ system, and has been criticised as potentially misleading for consumers.[lxxxv]
Further, after agreement with the adoption of the adoption of the HSRS in May 2013, the AFGC changed its position and sought to retain its Daily Intake Labelling System. This appears to have been an attempt to delay government approval of the scheme until after the September 2013 Federal election, in the hope that the scheme may be delayed further or scrapped entirely.[lxxxvi]
[i] National Health and Medical Research Council, Eat for Health – Australian Dietary Guidelines, Canberra (2013), p. 22.
[ii] NHMRC, p. 67.
[iii] Australian Institute of Health and Wellbeing, Australia’s Food and Nutrition 2012, Canberra (2012), p. 80.
[iv] R Stanton and C Pollard, ‘Why bad food is good for business,’ The Conversation, 4 August 2014.
[v] C Monteiro, ‘The big issue is ultraprocessing,’ World Nutrition, November 2010 (1), pp. 237-269, p. 245.
[vi] N Freudenberg, Lethal but Legal (2014) Oxford, p. 4.
[vii] D Kessler, The End of Overeating (2009) New York, p. 18.
[viii] N Freudenberg, p. 4.
[x] Ibid, p. 19.
[xi] World Health Organisation, Report of the Commission on Ending Childhood Obesity (2016) Geneva, p. V and VI.
[xii] R Stanton and C Pollard.
[xiv] National Health and Medical Research Council, p. 67.
[xv] World Health Organisation, Health Diet – Fact Sheet No 394 (2015), see http://www.who.int/mediacentre/factsheets/fs394/en/.
[xvi] Australian Bureau of Statistics, Australian National Health Survey: First Results 2014-15 (2015) Canberra, p. 2.
[xvii] Ibid, p. 36
[xviii] Ibid, p. 25.
[xix] Australian Institute of Health and Wellbeing, p. 24.
[xx] Arielle and Alex - Gill et all, NHMRC 2011 Cohen 2010
[xxi] NHMRC, p. 22.
[xxii] Australian Institute of Health and Wellbeing, p. 24.
[xxvi] R Stanton and C Pollard.
[xxviii] C Monteiro, p. 245.
[xxix] R Stanton and C Pollard.
[xxxii] C Monteiro, p. 246.
[xxxiii] C Monteiro, ‘The Snack Attack, American Journal of Public Health, June 2010, 11(6), pp. 975 – 980, p. 975.
[xxxiv] C Monteiro, November 2010, p. 260.
[xxxvii] D Powell, ‘How fast food is reinventing itself as healthy and caring,’ The Conversation, 14 September 2015.
[xxxix] Obesity Policy Coalition, Policy Brief – The Harmful Impacts of Unhealthy Food Sponsorship in Children’s Sporting Settings – The Need for Action (2014), p. 1.
[xl] R Richards, ‘Ethical sponsorship and advertising in sport,’ Australian Sports Commission Clearinghouse for Sport, 20 January 2016.
[xli] Tony Meenaghan and David Shipley, ‘Media effect in commercial sponsorship,’ European Journal of Marketing (1999), 33(3/4), pp. 328-347, p. 335.
[xlii] Ibid, p. 342.
[xliii] Ibid, p. 336.
[xliv] Obesity Policy Coalition, p. 2.
[xlv] R Richards.
[xlvi] D Powell.
[xlvii] C Mayes, J Kaldor, ‘Big Food with a regional flavour: How Australia’s food lobby works,’ The Conversation, 11 September 2014, p. 1.
[l] M Bond, B Crammond, B Loff, ‘It’s not about choice: the supermarket and obesity,’ Medical Journal of Australia, 2012, 197(7), 371.
[lii] J Larson, E Bradlow, P Fader, ‘An exploratory look at supermarket shopping paths,’ International Journal of Research in Marketing (2005), 22, pp. 395-414, p. 412.
[liii] C Mills, J Martin, N Antonopoulos, End the Charade! The ongoing failure to protect children from unhealthy food marketing, Obesity Policy Coalition, Melbourne (2015), p. 3.
[liv] World Health Organisation (2016), p. 18.
[lv] World Health Organisation, Global Strategy on Diet, Physical Activity and Health (2010), Geneva.
[lvi] See, for example, the following private members’ bills put forward by Greens Senator Bob Brown - Protecting Children from Junk Food Advertising (Broadcasting and Telecommunications Amendment) Bill 2008 (Cth), Protecting Children from Junk Food Advertising (Broadcasting and Telecommunications Amendment) Bill 2010 (Cth) and Protecting Children from Junk Food Advertising (Broadcasting and Telecommunications Amendment) Bill 2011 (Cth).
[lvii] Codes addressing the advertising of junk food products to children include: The Australian Association of National Advertisers (AANA) Code of Ethics, the AANA Code for Advertising and Marketing Communications to Children 2014, and the Food and Beverage Advertising and Marketing Communications Code 2009.
[lviii] World Health Organisation (2010), p. 7.
[lxi] C Mills, J Martin, N Antonopoulos (2015), p. 1.
[lxii] See, for example, ASB 0097/14 concerning a website for Nestle’s Milo, ASB 0101/14 concerning a website for Wizz Fizz, ASB 0046/11 concerning a television commercial for McDonald’s Happy Meals, and ABS 0205/14 concerning an television commercial for Wonka’s Cookie Creamery Chocolate Block.
[lxiii] Australian Government Department of Prime Minister and Cabinet, TheAustralian Guide to Regulation, Canberra, 2014, p. 28.
[lxvii] C Mills, J Martin, N Antonopoulos (2015), p. 12.
[lxix] M Bond, B Crammond, B Loff, ‘It’s not about choice: the supermarket and obesity,’ Medical Journal of Australia, 2012, 197(7), 371.
[lxx] Australian Government – Australian Taxation Office, Income and deductions for business: What you can claim and when, Canberra, https://www.ato.gov.au/Business/Income-and-deductions-for-business/What-you-can-claim-and-when/Expenses-you-can-claim-in-the-year-you-incur-them.
[lxxi] R Stanton and C Pollard.
[lxxii] Australian Government – AusIndustry, R&D Tax Incentive, Canberra, http://ausindustry.gov.au/programs/innovation-rd/RD-TaxIncentive/Pages/default.aspx.
[lxxiii] Australian Government – AusIndustry, R&D Tax Incentive – Queensland Case Studies: ‘A Sweet Benefit’, Canberra. http://ausindustry.gov.au/programs/innovation-rd/RD-TaxIncentive/Pages/stateBrochures/Queensland.aspx#2.
[lxxiv] N Rose, M Croft, ‘The Draft National Food Plan: putting corporate hunger first,’ The Conversation, 20 July 2012.
[lxxv] E Gustafson, ‘True costs of so-called cheap food,’ Huffington Post, 25 November 2013.
[lxxvi] R Stanton and C Pollard.
[lxxix] Australian Food and Grocery Council, Industry Policy – Regulation, see http://www.afgc.org.au/about-afgc/our-policies/industry-policy/.
[lxxxi] C Mayes and J Kaldor, p. 2.
[lxxxii] S Mackay, ‘Legislative solutions to unhealthy eating and obesity,’ Public Health 125 (2011) pp. 894-904, p. 899.
[lxxxiii] C Mayes and J Kaldor.
[lxxxiv] R Magnusson, ‘Obesity prevention and personal responsibility: the case of front-of-pack food labelling in Australia,’ BMC Public Health (2010), 10:662, p. 1.
[lxxxv] G Sacks, ‘Seeing stars: ministers poised to approve new food rating system, but industry seeks a delay,’ The Conversation, 14 June 2015.
[lxxxvi] G Sacks, 2015.