Select Committee on Health Minutes of Evidence


Examination of Witnesses (Questions 840-859)

THURSDAY 27 NOVEMBER

MR ANDREW COSSLETT, MR JULIAN HILTON-JOHNSON, MR MARTIN GLENN AND MR TIM MOBSBY

  Q840 Mr Burstow: How do you draw attention to the nutritional issues at that point of decision?

  Mr Hilton-Johnson: It is not about drawing attention at any particular point; it is about providing information generally that is available to customers so that they can make the decisions they want to.

  Q841 Dr Naysmith: I have occasionally bought a hamburger myself but I have never been given any nutritional information.

  Mr Hilton-Johnson: It is available should you wish to look at it.

  Q842 Mr Bradley: A Big Mac would not be a super size meal. That would be an ordinary meal as opposed to a little Mac?

  Mr Hilton-Johnson: The Big Mac does not change size. My understanding is that if you buy a Big Mac meal now compared to, say, 1984 it is quite substantially lower in its fat content and its calorie content.

  Q843 Mr Bradley: That does not come into the category of a super size meal?

  Mr Hilton-Johnson: That is just a meal. If you wanted to have a larger drink or larger french fries, you could do that if you wanted to.

  Q844 Dr Naysmith: I wonder if any of the other members of the panel have any comment to make on pushing larger sizes? I know that Cadburys do that to a certain extent although I understand that their competitors, Mars, do it much more.

  Mr Cosslett: A bit more but not that much more. We make a very wide range of sizes available. Most of the bigger ones are designed for sharing. With Christmas coming up, most people will have a tin of chocolates in the house for sharing and I think that is generally understood. I think the area you are talking about is the single bars. Again, three per cent of the confectionery market is in those products. I think the figure is slightly higher for Mars and is declining. They were introduced for a very specific audience, very active people in the late teens, who are pretty voracious consumers of most things. They fill that need. It is basically a high activity product. All chocolate has labelling that puts forward the calories, even though perhaps the labelling could be stronger, but they are always sold alongside other products of other sizes. People really have the choice of standard size, the larger one or a bag of buttons.

  Q845 Dr Naysmith: I am surprised when you say that it is such a small percentage of the market and I will tell you why. If you go in to get petrol, there is a whole range of sweets on sale. King size is always there at least as much as the standard size.

  Mr Cosslett: Service stations are very highly visible and we all go there but they are a very small part of the confectionery industry. It might surprise the Committee to know that half the sweet shops in Britain have closed in the last 25 years. Petrol stations are a relatively small part of the consumption and King size bars are their market. If you are trying to have a product which appeals to active, energetic members, they spend a lot of time in cars and going into petrol stations. That is the place where you will find them most of all. But it's a very small part of the business.

  Q846 Dr Naysmith: Presumably, businesses want to try and grow that?

  Mr Cosslett: No, it is not designed that way. Our profitability on those products is lower.

  Q847 Dr Naysmith: How can it be lower?

  Mr Cosslett: Because we give away a much bigger chunk of chocolate.

  Q848 Dr Naysmith: For an increased price?

  Mr Cosslett: It is not necessarily proportionately. So we are not particularly inclined and motivated to sell King size bars.

  Q849 Dr Naysmith: Kraft has recently agreed to issue smaller portions on a number of their products and they have said it is on health grounds. I wonder if any of you are prepared to follow them?

  Mr Hilton-Johnson: I am not quite sure what Kraft have said or done so I would not wish to comment. From our perspective, we offer a range of portion sizes for people to decide themselves what they want. Increasing to a slightly larger portion is likely to have a comparatively small effect on the overall calorific value, even before you start thinking about questions such as diet and the fact that people come in two or three times a month. Therefore, it is going to have a very small effect on their diet. Also, a Big Mac at the moment is about 590 calories. If you buy, for example, a cheese and tomato sandwich from a leading supermarket retailer, you may find that that is 600 calories or 650 calories.

  Q850 Dr Naysmith: All morning we have been arguing about the balance between calories in and calories out. There has been no disagreement that what we want to do is encourage people to take more exercise. Is it not reasonable to try to encourage people to eat a little less as well?

  Mr Hilton-Johnson: It is sensible to encourage people to eat a healthy, balanced diet and if on occasions they want to eat more then surely that is okay.

  Q851 Mr Bradley: Accepting your point that the market is relatively small, where you are selling the king size product in petrol stations, your target market is in a sense the most inactive market because they are eating a bigger product, sitting in a car or lorry, the out part of the equation is even lower and the in part is higher. You are contributing to that problem. Do you see any responsibility for redressing that by not encouraging people to buy big bars?

  Mr Cosslett: There is a bit of an assumption there that people who use products in petrol stations are necessarily overweight or more sedentary than others. I am not sure that would be proven. Our products are portable and you can eat them over a period of time. People do. If you look at most of our king size bars, they have the chunks and they are designed to be broken. A lot of our bigger products are eaten a bit and then consumed later, the next day. That is what people do because it is transportable and it does not go off. It does not get cold or hot but generally speaking the products stay around over a number of days.

  Q852 Mr Bradley: I do not know if there is research on that and I may not be a good example but if you buy a chocolate bar you tend to consume it pretty quickly. If you have two Twix bars you do not save one and say you will eat it tomorrow. You eat the second one just as quickly as the first one.

  Mr Cosslett: I understand your point but if you are offering adults at petrol stations an open range of products for them to choose from and the labelling says what is in them and they know instinctively about confectionery, that is their choice. It is a market that is a small part and it is declining. The value equation is one we may want to review. This thing about going from a smaller to a bigger bar and it being more attractive is something we could perhaps look at because it is not our intention to induce people to eat them in an impulse purchase situation. I cannot talk for my competitors but I certainly think we could review that to see whether we should make it clear on the packaging that the role of it is for eating some now and some later to try and get over the kind of behaviour you are describing.

  Q853 Mr Burstow: Perhaps I can move on to marketing and sponsorship issues. I was looking at the table that was included in the Pepsi submission regarding the importance of companies to be socially responsible. I was struck by the quite significant shift in terms of consumers calibrating companies' social responsibility in terms of their decisions about whether or not to buy products from those companies. It has gone from 28% in 1998 considering it very important to 46% in 2001. I wonder if each of you could say a little bit about how much your companies spend on corporate social responsibility activities, perhaps split by sports, charitable work and local community activity in action? Could you give us an idea of the spend on each of those?

  Mr Glenn: The MORI opinion poll company that did the research said this was probably one of the most significant shifts they had seen in social opinion in all their experience of polling. The reason we put it in our submission is that we are making the general point that it is in our interest, as commercial enterprises, to go with the grain of how consumers feel. As well as coming from a personal sense of obligation, corporate social responsibility makes sense. At the risk of sounding like I am avoiding the question, I cannot give you the detailed breakdown that you want here and now. Consumers, individuals, the voters, judge companies not on the basis of individual corporate and socially responsible programmes. Free books in schools have been important but corporate social responsibility starts first and foremost with the type of employer that you are, whether you employ responsibly. We seek to exceed government minima in terms of safety. We pay above average in the neighbourhoods where we work. We are one of the few businesses that have kept a final salary pension scheme going. That is the foundation of corporate social responsibility, which is how good an employer and neighbour you are. On top of that, we found the taking in of charity budgets away from the chairmen and putting them into the marketing departments resonates well with consumers. In the case of Walkers in the UK, we spent the equivalent of £35 million of retail value over the last few years in linking the purchase of Walkers crisps and snacks and books for 30,000 or so schools in the country. That is one of the biggest cause related marketing campaigns that we do. In addition, although I cannot describe the monetary value to it yet, we are a partner with the Football Association in terms of what we call the Youth Pillar. It is difficult with a lot of the submissions one is asked to fill in, in terms of the corporate social responsibility index, but we offer a lot of value in kind by allowing our employees to volunteer time. I do not know how you put a price on that. I guess you could in terms of time well spent but it is significant. I do not have the breakdown but I would be very happy to try and provide it to you. The key thing is if consumers thought we were offering them bad products at poor value, making them unhealthy and were trying to assuage our feelings of guilt by doing some of these high profile programmes, we would not get anywhere. The fact of the matter is consumers see Walkers, Cadburys and Kellogg's as pillars of the establishment with trusted brands and they respect that.

  Q854 Mr Burstow: If you can supply the information later that would be very helpful. I think you have been able to send out seven million books so far. I wanted to get a handle on what that might equate to in terms of numbers of crisp packets. I was doing some number crunching and I may have got it completely wrong but I came up with a figure of about 1.2 billion packs being required to achieve those seven million books. Is that a gross under-estimate or an over-estimate?

  Mr Glenn: The reason the scheme has been so successful is that it offers terrific value for money. Put yourself in the position of school teachers or school secretaries. They have a number of these schemes offered to them. The reason that free books have done so well over the years is that they offer pretty good value for money. We think there is a return of about 15%. If a packet of crisps costs you, say, 20 pence, the value of a voucher for a typical book costs, say, £5 to buy and 100 vouchers will get you there, it is a pretty good return on investment.

  Q855 Mr Burstow: On the figures I have seen it seems to be about 172 packs per book.

  Mr Glenn: 100 tokens gets you a book of the equivalent cost of about £5. What schools have done over the years is traded up to more expensive books. The success of the scheme has been because it works for schools.

  Mr Hilton-Johnson: I would agree entirely with your comments that social responsibility is not just about community activities. It is much more everything that you do as a company, your employment practices, your dealings with your suppliers, what you expect of them and their employees. It is your environmental record and so on. Community activities inform part of that. Last year, we published our first worldwide corporate social responsibility report. The spend for us is very difficult to quantify. I can try and provide you some information later. In our case it is partly difficult because it goes on in 1,200 locations throughout the country. We too have schemes with volunteering but there are two very important aspects of my company's community activities that I would like to draw to your attention. The first one I have already mentioned. That is creating 10,000 new community football coaches over the next four years. That is an increase in accredited football coaches of 57% over four years. You do not have to be a McDonald's customer to be coached in this way or to benefit. The other thing we contribute to is Ronald McDonald Children's Charities. That is responsible for something like 23 or 24 rooms and houses throughout the country where parents can stay when their children are sick and in hospital. Some of these are comparatively small. The largest has 65 bedrooms at Alder Hey in Liverpool.

  Mr Cosslett: Most people would recognise Cadbury as one of the companies that takes its social obligations extremely seriously going back to the 19th century with the provision of housing for its workers and the creation of Works Councils Sunday's off. That spirit endures. Today, we have a direct financial contribution into charitable causes in the UK of over £2.5 million a year. The majority of our effort though is through our employee volunteering scheme. We now have 1,500 people in the UK engaged regularly, at least once a month, on community enterprises, many with schools. During our Get Active promotion, we had about 300 of those volunteers talking in local schools about five a day messages and the need for a healthy lifestyle and activity. We are out there, trying to push the right message. 1,500 people are involved in social programmes. We have a homeless sleep-out this weekend at St Basil's in Birmingham. Everyone is welcome to join in .It is something we take extremely seriously. It is something I am remarkably proud of for our organisation because these are ordinary people, giving up their free time.

  We are a founder member of the Business in the Community movement, so it is an enormous important part of what we do. We obviously take our environmental responsibilities way beyond what is required. In just about every facet of business we like to think of ourselves as the gold standard.

  Mr Mobsby: Very similar to my colleagues here, whether it is in the areas of employment or environmental aspects, there are many of those, health and safety, the health of employers, et cetera. Perhaps the things you are more interested in would relate to activities within the community, as you describe them. We donate money very directly, particularly within the local communities in which we are based where we feel we have most influence. Also, the point others have made as well, one of the ways that we have been advised and found most useful is providing the services of our people, very often they may have money, they may not have the skills and expertise that our people can bring, so that can be provided on a regular basis and we do have people working in the community full-time. Also the volunteer time that our own employees choose to focus on, particularly education. In terms of contributions we contribute about £1 million a year. From a commercial activity standpoint we contribute to Child Line, we have contributed about half a million pounds to that particular charity over time. We are involved in numerous other initiatives, Get Smart, which is a media literacy programme. There are many different facets to it.

  Q856 John Austin: A number of companies in the food industry, including some of yourselves, associate products with sporting heroes and people in popular culture—I do not want to get at Leicester City but Mr Lineker was awarded the—"Greedy Star Award" and the runner up was Britney Spears, neither of whom is in any way obese or even overweight. Is there an ethical issue about associating sporting heroes and popular culture heroes with some of the products you provide? Do you think there is an ethical issue?

  Mr Glenn: We talked about it last week after the last session. I think if there were an ethical issue I do not think we would do it. What we try and do with advertising is we try and associate our adverts with popular people to make the adverts effective, that is what we try and do. Nowhere in our advertising, partly a matter of choice, but also partly because we are governed by a strict advertising code—not just for the children but for all advertising—we suggest if pop star X consumes a product you will become like the pop star. It is very, very controlled in terms of the association you make with the celebrity. If you look at Walkers advertising with Gary Lineker it does not encourage over-consumption, it does not suggest you are going to be a sports star, it is just using a personality who happens to like our product, he is from Leicester, consumes the product himself and is very happy about doing that. It is part of a simple pleasure in life and that is what comes over in the advert.

  Q857 John Austin: Do you think there is a difference in the way that adults perceive advertising and children perceive advertising?

  Mr Glenn: We know there is. Psychologically children's cognitive and critical facilities are less well developed, that is part of being a child, which is why the advertising code for children is particularly strong.

  Q858 John Austin: In what way are they strong?

  Mr Glenn: Let me give you some examples, the draft global standard for regulating advertising to children is effectively based on the UK code, which should tell you that the UK code is very strong indeed. For example what it cannot do is it cannot suggest to children you should replace a snack instead of a main meal, you cannot suggest you eat it before you go to bed, it cannot suggest over-consumption and it absolutely cannot suggest that you should go and ask your Mum to go and buy it. All those things are prescribed by the code.

  Q859 John Austin: In the media strategy for Walkers Wotsits they talk about "Wotsits are for me—I'm going to buy them when I get the chance and pester Mum for them hen she next goes shopping".

  Mr Glenn: We looked at that two weeks ago, yes it was a brief, we looked at the advert, and I am sure you have, and in no way did it encourage pester power. There was no mother in the advert. The advert was approved by the ITC. We did not get any letters of complaint.


 
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