On 21 April 2023, the Minister of Health published the draft
regulations relating to the Labelling and Advertising of Foodstuffs (GN R 3337 GG 48460) in terms of the Foodstuffs, Cosmetics and Disinfectants Act, 1972 (the draft regulations). Comments on the regulations are due on 21 July 2023.
The draft regulations have the potential to significantly alter the landscape of labelling, marketing and advertising of foodstuffs in South Africa, adversely affecting stakeholders should they be approved in their current form.
Some key changes contemplated include:
- Specific Front-of-Pack Labelling (FOPL) for foodstuffs that contain added saturated fat, added sugar, added sodium, exceed the nutrient cut-off values for total sugar, total sodium or total saturated fatty acids, or contain artificial sweeteners. The logos depicted below need to be prominently visible to the consumer when the product is displayed. In addition, care needs to be taken to ensure that the logos are not removed or damaged.
- Restrictions as to what may be displayed on FOPL and to whom such foodstuffs may be advertised to (no marketing to children). Furthermore, FOPL
may not depict:
Advertisements for products with a FOPL may not abuse positive family values such as portraying any happy, caring, family scenarios.WARNING labels must appear in black and white.Detailed provisions relating to health claims, which refer to an effect on the human body, including an effect on, for example, a biochemical process or outcome, growth and development, mental performance and oral hygiene.
- celebrities, sports stars, cartoon-type characters, puppets, computer animations;
- competitions, tokens, gifts or collectable items appealing to children; and
- children in mixed groups with young adults older than 18 (although young adults are not defined).
The strategy of brand owners worldwide is to advertise and package products in a way that attracts consumers. This is often done through celebrity endorsements, images of sports stars, cartoon-type characters (many of which have become household names) puppets, computer animations and feel-good images of happy families. The implications of the FOPL are therefore significant for brand owners who will, if the regulations become effective in their current form, need to embark on a re-branding exercise. Trade mark portfolios will also need to be revised, requiring new trade mark applications to be filed and amendments to existing trade marks. In respect of copyright portfolios, artworks will need to be amended and media and digital advertisements revised and reinstated. The significant costs associated with all these additional measures come at a time when brand owners are already confronted with a challenging economy. We note in this regard that the JSE's food producers index is down by 16% with rising production and distribution costs, exacerbated by load-shedding.
The laudable intention of the draft appears to be to address South Africa’s soaring rates of obesity and lifestyle diseases such as diabetes by providing more information on food labels and restricting misleading advertising. Unfortunately, the draft regulations have gone too far and, in doing so, could result in multi-national companies exiting the South African market altogether.
At a recent Round Table Discussion hosted by the Advertising Regulatory Board (ARB) and Marketing South Africa (MASA), members of the foodstuffs, marketing and advertising industries highlighted a number of significant concerns with the draft regulations. It was clear that while the industry is naturally concerned about the impact of the proposed restrictions on their brands, trade marks and businesses, they fully support consumers being properly informed about the products they purchase and recognise their role and responsibility in this regard.
The draft Regulations, however, have the potential to significantly damage companies that have spent decades building their brands and relationships with consumers.
The approach adopted by the Department of Health seems to have been based on a combination of the Chilean, European Union and Australian models, with the most restrictive measures taken from the Chilean model. In 2016, Chile adopted extremely strict regulations (subsequently followed by several other Latin American countries) in an attempt to address child obesity. Yet, Chile’s obesity rates have climbed from 51.2% in 2016 to 58% in 2022. In fact, recent studies conducted globally indicate that there is limited evidence of the impact of unhealthy food advertising on dietary behaviour. Models used in Australia, Canada or the European Union – whilst imposing strict requirements – have been proven to be a better fit for business and offer an alternative approach to the Chilean model.
Not only could international entities decide to leave the market, which South Africa can ill afford but, the additional costs relating to compliance with FOPL and extensive warning signs will inevitably (at least in part) be passed onto the consumer who is already wilting under the pressure of ever-rising costs.
While it is important to ensure that manufacturers are honest about their products and do not claim benefits that do not exist, these regulations, unfortunately, go well beyond that. Consumers and the industry alike can only hope that government takes the comments received into account and consider the potentially devastating impact that the regulations may have on the South African economy.