Soft Drinks Manufacturers Are To Support The European Union's Anti-Obesity Drive Through Tougher Self-Regulation

London - It is unsurprising that soft drinks manufacturers have agreed to tougher self-regulation throughout Europe. The compliance will help them avert the kind of heavy legislation and anti-obesity lawsuits currently threatening the US market. Moreover, the measures - which include offering more sugar-free and low-calorie varieties - are no big sacrifice as they are in line with shifting consumer demand.

Soft drinks manufacturers have agreed to tougher self-regulation to comply with a wider code of practice unveiled today by Unesda, the body that represents the European non-alcoholic drinks industry, including Coca-Cola, PepsiCo and Cadbury Schweppes.

The voluntary measures include removing marketing communication in print media, websites or during broadcast programs that are specifically aimed at children; and not engaging in any direct commercial activity in primary schools, unless otherwise agreed with school authorities. Manufacturers have also pledged to include increased nutritional information on beverages, and offer a wider range of drinks, including sugar-free and low-calorie varieties, in smaller container sizes to limit intake.

In view of the current climate in the US, it is unsurprising that soft drink manufacturers are so ready to self-regulate in Europe. A number of US states have already outlawed the presence of vending machines in schools, while one forthcoming lawsuit in the US is reportedly expected to allege that the marketing of soft drinks in schools breaches state consumer protection laws.

While the issue is arguably less contentious in Europe, France has already banned vending machines from schools, and obesity levels in the UK continue to elicit calls for the government to intervene.

Soft drinks manufacturers are therefore wise to preempt tougher legislation by publicly declaring their compliance with the EU. Indeed, many of the changes they have pledged are in line with shifting consumer demand. Datamonitor figures show that the market for diet cola in Europe will show steady growth over the next five years, while the market for standard cola is expected to show more conservative growth - a compound annual growth rate (CAGR) of 1.6% over the same time period.

So while many argue that the new measures will merely formalize policies that soft drink producers already have in place - Coke and Pepsi, for instance, have already agreed not to advertise soft drinks to under 12s - through publicly imposing a voluntary ban the industry is avoiding legislation that could jeopardize its relationship with younger consumers. As for litigation, soft drinks manufacturers can avoid this by continuing to focus on improving and promoting the health value of their products; something the US market was arguably late to do.

SOURCE: Datamonitor