Lifestyle Economics

Did industry unduly influence Ofcom’s decision on restricting TV advertising of unhealthy kids’ foods?


In December 2003 the Secretary of State for Health asked Ofcom to look into the regulation of television advertising of High Fat, Salt and Sugar (HFSS) food to children in order to address concerns about the rising levels of childhood obesity.  How did Ofcom decide on an appropriate set of advertising regulations to address those concerns?

According to the authors of a paper in the BMJ Open, Ofcom consulted on the issue, considered the arguments advanced by the different stakeholder groups (advertising companies, food manufacturers, food retailers and broadcasters on one side, lobbying for more relaxed regulations, and civil society groups, politicians and public health stakeholders on the other, arguing for stricter rules to protect children), decided which arguments they liked and determined their final recommendations accordingly. They argue that because Ofcom moved towards the industry arguments between their original proposals and final recommendations on more issues than they moved towards the public health direction, that they favoured commercial interests over protecting children’s health. They even suggest that Ofcom might have been Machiavellian enough to cynically set some of their initial proposals in such a way that that they could concede ground to public health stakeholders on those issues and distract from more contentious issues.

In fact, the truth is somewhat different. Ofcom when moving forward with a complicated public policy question such as how far to restrict the advertising of unhealthy food on television developed their policy position by considering the evidence. They did not just rely on stakeholder responses as suggested in the BMJ article, Ofcom carried out a huge amount of additional evidence gathering and data analysis itself, assessing how effective different policy options might be at restricting children’s viewing of adverts for HFSS foods and working with the Food Standards Agency (FSA) to estimate the potential health benefits from the improved diets that might be gained. Ofcom then brought together all the evidence and analysis that it had into an Impact Assessment (a formal evidence-based process for assessing the costs, benefits and risks of alternative policy options). It used the Impact Assessment to assess the benefits and costs of different policy options – from doing nothing and sticking with the status quo, to a complete ban on all advertising up to the 9pm watershed. The evidence and analysis in the Ofcom IA was consulted on alongside the policy consultations and was highly influential in shaping its final policy decision.

As well as fundamentally misunderstanding the policy-making process, the authors are disingenuous about the success of Ofcom’s regulations. They suggest that there was no change in the proportion of HFSS adverts seen by children before or after implementation of the regulations. In fact, compared with 2005, children saw 37% less HFSS advertising by 2009 and 53% less by 2015. That reduction has continued with children being exposed to 70% fewer adverts by 2017 (2.7 minutes per child per week on average compared to 9.1 minutes in 2005). Therefore Ofcom’s policy (combined with the general trend of children moving from watching television to other electronic platforms and social media) has been highly successful in achieving its objective of reducing children’s exposure to HFSS adverts on television[1].

Picking up some of the more egregious suggestions by the article’s authors, the reason that the policy was extended to cover 4 to 15 year old children rather than 4 to 9 years olds was not that “arguments of public health groups held more weight over this issue”. The original rationale for protecting younger children from HFSS adverts was that they were not able to appreciate the consequences of an unhealthy diet and therefore there was a market failure that should be addressed through regulation. As part of its analysis, Ofcom became convinced by the evidence (in particular a literature review conducted by Prof Sonia Livingstone) that 10-15 year old children also may not fully appreciate the long term consequences of their dietary choices; as a result Ofcom extended the regulations to cover the wider age range.

The article’s authors are incorrect to suggest that Ofcom ignored the possibility that both children and adults might watch television together.  Of course Ofcom recognised that there are many programmes which both children and adults watch. They sought to balance the protection of children by reducing their exposure to HFSS adverts with avoiding intrusive regulation of advertising during adult airtime given that adults are able to make informed choices about advertising messages. That is why the final measures included restrictions on programmes of particular appeal to children (which might also have large adult audiences) as well as programmes specifically made for children. It is also obvious that the pre-9pm ban advocated by public health groups would also have struck a balance: between allowing children to watch some HFSS adverts (after 9pm), and not restricting the broadcasting of HFSS adverts to a predominantly adult audience. Ofcom simply struck a somewhat different balance. There was no “precedence” given to individual freedoms for adults over protecting children (as the article suggests), it was simply that Ofcom reached its decision on the appropriate balance to strike between competing objectives given the evidence that it had on the costs and benefits of each option.

Similarly, the article suggests that the implementation timetable was an example of Ofcom being “more concerned about the potential commercial impacts of advertising restrictions [than minimising the exposure of children to HFSS adverts]” and that they “delayed enforcement of the restrictions as a result”. However there were practical considerations to be taken into account about how quickly the broadcasters could make the changes to their automated sales systems that would be required to implement the new measures. Ofcom also wanted to allow broadcasters time to adjust to the new arrangements by phasing in the new restrictions, this avoided a disproportionate impact on broadcasters while still reducing children’s exposure to HFSS adverts very significantly.

A particular misunderstanding in the article is the suggestion that Ofcom did not “consider the cost to the economy of poor health that could stem from a lack of appropriate restrictions … with no mention of societal costs” and that “future (external) costs of treating the potential health implications of HFSS food consumption did not appear to influence policy making”. Again this is incorrect. The Impact Assessment specifically analysed the (external) costs to society of a range of obesity-related illnesses using Department for Transport measures of the value people place on quality and quantity of life. Where these benefits occurred in the future, they were discounted to present values in line with HM Treasury guidance on policy appraisal and evaluation. This evaluation of the potential benefits of the different policy options was central to Ofcom’s Impact Assessment and a key part of the decision making process.

It is a shame that a potentially interesting review of how stakeholder responses influence public policy decisions has been marred by a large number of significant factual errors and a failure to appreciate the basis on which public policy decision are made by economic regulators like Ofcom. As a result it comes to a conclusion that is both erroneous and misleading.

 

Stephen Gibson is Director of SLG Economics and is on the Board of the Government’s Regulatory Policy Committee which scrutinises the quality of government departments’ and economic regulators’ impact assessments.

Stephen was Principal Economist at Ofcom between 2004 and 2007 when he was responsible for leading their Impact Assessment of Television Advertising Restrictions of Food and Drink Products to Children.

 

[1] In July 2017, the Committees of Advertising Practice introduced a set of similar restrictions on non-broadcast advertising of HFSS food and drink https://www.asa.org.uk/advice-online/food-hfss-overview.html


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