Treasury bosses fear plans for a sweeping clampdown on promotion of foods high in salt, fat or sugar will increase the cost of food and drive up inflation.
Sources have revealed “serious tensions” between government bean counters and the Department of Health over the plans, which are due to go out to consultation in the next few weeks.
Under the Childhood Obesity Plan (Part 2), the DH is to launch a 12-week consultation into proposals to ban promotions of HFSS products at checkouts, front of store and end of aisles.
“There is some real tension across government about how far-reaching the plans could be,” said a leading industry source.
“The Treasury has said it is very concerned that driving up the cost of food could increase food poverty. They are also concerned about the impact on competitiveness in the sector when we have a model where you could have 40%-50% of a supermarkets products at any one time being sold on promotion.
“The last thing the Treasury wants is to increase inflation and reduce the competitiveness of companies at a time when there are already enormous fears over the cost to businesses of Brexit.”
Last week The Grocer revealed industry bosses fear a parallel consultation by PHE on a new much stricter model for junk food classification, under its Nutrient Profile Model, will be used to underpin the promotions clampdown.
PHE has admitted 8% fewer products will pass the criteria of the profile, which is already used to decide goods allowed to advertise during children’s programming, but which the industry fears will be extended to define ‘junk food’. The consultation said 8% fewer products would pass the test.
Among those at risk of being branded as junk food are Petit Filous yoghurts, which was recently held up as an example of reformulation by PHE, and Lucozade, which spent millions reformulating its entire lineup of drinks.
Earlier this month a leaked letter from chief secretary to the Treasury, Liz Truss, also warned that restaurants in England forced to put calorie counts on menus could lead to job cuts and cost them up to £500 to work out calorie counts. In the letter, leaked to The Daily Telegraph, Truss said: ’At this stage I am not agreeing to any preferred or final policy change for small or micro businesses.
’We should take a final decision following this consultation and informed by the evidence submitted to it.
‘HM Treasury clearance is required for government’s response to this consultation.’
The row over the costs of the obesity plan comes as Tesco boss Dave Lewis told The Grocer proposals to intervene on promotions risked backfiring because consumers were already confused by healthy eating guidance.
Tesco has announced a partnership with celebrity chef Jamie Oliver to help tackle obesity.
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