How Far Will Brands Go To Curb Child Obesity Issue?

American brand managers were left wondering last week whether their self-regulation of marketing junk food to kids will be enough to stave off stricter legislation in the new Democrat-controlled Congress.

The industry is already facing a December deadline to respond to a Federal Trade Commission inquiry into junk-food ad spend. In October, the FTC said it felt Big Food’s response to its questions were too “minimal” and warned that “the FTC has the authority to compel production of this data.”

New U.S. voluntary guidelines were unveiled last Monday by the Children’s Advertising Review Unit, a unit of the Council of Better Business Bureaus. But they don’t go nearly as far as those announced Thursday in Britain by Ofcom, the London-based regulator.

Under Ofcom’s rules, which are essentially law, marketers in Britain were told that as of January 2007 they would be banned from advertising “food and drink products that are high in fat, salt and sugar”on any TV show with a “higher than average” audience of under-16s “at all times of day and night and on all channels.”

CARU’s rules are merely “designed to provide additional guidance to assist advertisers

. . . and to help them deal sensitively and honestly with children.” CARU allows for junk-food ads to under-12s under certain conditions, and actually encourages ads if they also promote healthy activity.

Ofcom also banned licensed cartoon characters in marketing to kids in the U.K., which would affect properties like SpongeBob SquarePants. But CARU allows licensed characters to be placed in ads next to editorial or Web content that also feature the character, as long as the ad is clearly labeled as such.

The British government estimated the Ofcom rules would kill off $73 million in TV network ad revenue—a large sum for that country.

Critics told Adweek sister publication Brandweek that the CARU guidelines weren’t good enough and they’d continue to lobby the government to step in and control junk- food promotion. Jeff Cronin, communications director at the Center for Science in the Public Interest, Washington, said CARU was only making changes “on the margins.” “Sen. [Tom] Harkin [D-Iowa] had a bill that would give the FTC more authority to regulate junk-food ads aimed at kids,” he said. “We’d enthusiastically support it” if it was reintroduced.

Ronald Urbach, a partner at ad law firm Davis & Gilbert, New York, which CARU consulted for its new rules, downplayed the chances of federal action. “Yes, the new Congress is potentially likely to be more aggressive as it relates to government regulation of advertising and marketing … certainly on the issue of children. But it’s premature to say it’s going to follow,” he said.

To show they were taking the obesity crisis seriously, 10 major food companies went further than CARU in their commitment to reforming their U.S. ad practices. Cadbury Schweppes, Campbell, Coca-Cola, General Mills, Hershey, Kellogg, Kraft Foods, PepsiCo, Unilever and McDonald’s unveiled last week a separate, stricter set of rules. Under the “Children’s Food and Beverage Advertising Initiative,” these companies will devote 50 percent of their ads targeting kids to “further the goal of promoting healthy dietary choices and healthy lifestyles.” They also will continue to reduce their use of licensed characters, product placement and ads in schools. They spend a combined $6.1 billion on ads per year, per Nielsen Monitor-Plus.

Yet, Bill Lamar, CMO at McDonald’s, said his marketing to kids “would continue to focus on nuggets, Apple Dippers and milk, which meet almost any science-based guidelines” for healthy food. He also said they would do a Shrek 3 promotion as part of their new deal with DreamWorks.