By Ignacio Vazquez, Company Engagement and Research Manager

The UK Government published a consultation paper on preventive healthcare policy on Monday 22 July. Its reception has been lukewarm, leaving many with a feeling that parts of it had been rushed through to allow for its publication before the recent change of Prime Minister.

In any case, it is encouraging to see that childhood obesity remains a concern athe top of health policy agenda. In fact, one of the most tangible actions included in the green paper was the confirmation of the retail ban of the sale of energy drinks to under-16s.

What are energy drinks?

Energy drinks are soft drinks that contain high levels of caffeine and other psychological stimulants. They also often contain very high levels of sugar, with a single can of many popular products providing over 33 grams, the total recommended daily amount for teenagers.  

The high amounts of caffeine and sugar that energy drinks contain are of concern given their popularity amongst British children, their largest consumers in Europe, particularly as a quarter of those who consume them will have three or more drinks in one sitting.  

The energy drinks paradox is that they do not give you energy. Ithe words of the president of the Royal College of Paediatrics and Child Healthso-called energy drinks result in fatigue and sleep deprivation. There is very little evidence that, with this excess caffeine, they give you extra energy. If they are full of sugar, that is an energy substrate. In fact, as conceded by an industry representative at a recent hearing, their consumption has no known positive health impacts.

Staying ahead of regulatory trends

The ban of retail sales of energy drinks to under 16s is the latest manifestation of the growing political and public support for regulatory action in this area. By adjusting to healthier business models, progressive companies have an opportunity to stay clear of future legislative changes while capitalising on growing consumer demand for healthier foods 

This seems to have been the case with regards to energy drinks sales, as major retailers Aldi, Asda, Boots, Lidl, Morrisons, Sainsbury’s, Tesco, the Co-Op Group and Waitrose have been operating a ban to under 16s on a voluntary basis since 2018. In fact, Tesco, Morrisons, Asda and Boots have also supported the introduction of the statutory ban in this area to ensure a level common playing field is maintained.  

The picture is different for energy drink manufacturers of popular brands such as Lucozade, Red Bull and Monster. According to the Government’s assessment these brands are likely to shoulder the bulk of the negative economic impacts associated with the loss of retail sales to under-16s worth £242m a year. 

Nevertheless, retailers should not be complacent. With two in three adults and one in three children in the UK overweight or obese, future regulation should come as no surprise. In fact, the Government has consistently alluded to further possible fiscal or regulatory actions. These include mandatory sugar and calorie reformulation targetsextending the scope of the soft drinks tax to cover high sugar milk drinks, and stricter nutritional labelling.  

It’s not just the government that is watching. Investors’ appetite for information on how these companies are responding to regulatory and market changes, such as rising consumer demand for healthier products and possible reputational issues, is also growing. There is no sugar-coating, the financial implications of companies actions in this area are serious.  

Thanks Ignacio! ShareAction’s Healthy Markets campaign aims to tackle rising child obesity rates in the UK by working with investors, manufacturers and retailers to create healthier food environments for children and their families. For more information, please contact ellie.chapman@shareaction.org or click here