New Research Finds Ad Bans Won’t Work

FOR IMMEDIATE RELEASE
January 23, 2009

New Research Finds Ad Bans Won’t Work

New independent research by Frontier Economics has found that food advertising bans planned by the Australian Government’s Preventative Health Taskforce would be ineffective. Worse still, the bans could end up increasing food consumption rather than decreasing it. And such bans, according to the research, would stifle the innovation and introduction of ‘healthier-for-you’ food options for consumers.

“The proposed ad bans would be a huge gamble with disastrous downsides,” said Glen Wiggs, Director of the Foundation for Advertising Research (FAR) – the organisation that commissioned the research from Frontier Economics. Mr Wiggs is also an Adjunct Professor of Advertising Regulation at the University of the Sunshine Coast.

“Banning the advertising of foods such as hamburgers, rice bubbles, soft drink and even Vegemite may sound to some as an attractive way of reducing obesity but the market does not work that way,” said Professor Wiggs.

“Frontier Economics concluded that if there was a television food advertising ban from 6AM- 9PM, as recommended by the Taskforce, then advertising would continue to be placed in other media and other forms of marketing such as discounting would be used to promote products, potentially leading to an increase in consumption.”

“In short it would skew the market with no benefits to consumers or to the argument that some foods and beverages are bad for their health,” he said.

Frontier Economics also examined the proposed bans against well established best practice principles of regulatory design - effectiveness, proportionality and targeting, transparency, consistency and predictability, flexibility, cooperation, and accountability. Frontier Economics concluded, “ the performance of advertising bans against seven criteria for good regulatory practice was generally weak.”

“One positive strategy that did emerge from the research is counter-advertising - advertising to encourage healthy eating. This has been particularly successful for other products and in other jurisdictions” said Prof Wiggs. “It is a proven strategy that should be taken up by the Taskforce”

“Although the research was specific to Australia the findings are equally applicable to New Zealand and other countries” said Prof Wiggs.

Note:
1.Frontier Economics is an international economics consultancy that has offices in Melbourne, Sydney and Brisbane. Its clients include government and industry. It also has offices in London, Brussels, Cologne and Madrid.
Attached - Summary of Findings
A copy of the Frontier Economics Report is available on request

MAIN FINDINGS
OF
FRONTIER ECONOMICS RESEARCH

The key points from the Frontier study are as follows:

1. Ad bans are ineffective

“Further, experience from countries (or regions) that have introduced advertising bans on food, alcohol and tobacco suggest advertising bans will have little effect when the ban is restricted to certain types of media, as there are opportunities to substitute between media or to other means of promotion.” (p30)

2. There are potential unintended consequences including:
- Increasing rather than decreasing consumption
- Reducing competition and innovation
- Increasing the amount of unregulated advertising and promotion

“Potential unintended consequences include: increasing rather than decreasing consumption of targeted products; reducing competition and innovation; and increasing less regulated advertising.” (p30)

3. Using the seven criteria for best practice regulatory design (effectiveness, proportionality and targeting, transparency, consistency and predictability, flexibility, cooperation and accountability), ad bans do not meet any of the criteria

“The performance of food advertising bans against seven criteria for good regulatory practice was generally weak.” (p31)

4. There is no generally accepted nutrient profiling system on which to base a definition of ‘energy dense, nutrient poor’. The three different nutrient profiling systems used in Australia have anomalies and contradict each other

“There are also a number of issues relating to the workability of advertising bans. Currently, available methods for classifying ‘energy-dense, nutrient-poor’ foods can produce what the public may consider counterintuitive results and consequently reduce the consistency, predictability and transparency of bans as a policy instrument.” (p30)


5. Counter-advertising is a valid option

“The literature on bans for other goods does, however, reveal a potential role for counter-advertising. In principle, counter-advertising may be less susceptible to the unintended consequences associated with further regulating advertising.”(p20)

It can therefore be concluded that the imposition of ad bans is a high-risk strategy and one that should not be contemplated.

ENDS

© Scoop Media