Jamie Oliver's School Dinners campaign may have sounded the death knell for Bernard Matthews' Turkey Twizzlers but as kids went back to school this week, that wasn't the only thing off the menu.

Burgers, chips and fizzy drinks have all been strictly rationed under the government's new school food standards, launched to combat childhood obesity. Many schools, local authorities and parts of the industry have also decided to make wholesale changes across vending and tuck shops ahead of new regulations that come into force in 12 months' time (see right).

The double whammy of regulations spells mixed fortunes for the food and drink industry.

When it comes to brand-run vending operations, such as those owned by Nestlé and Masterfoods, the consensus is that they must evolve or die.

Many fear that the latter is most likely and that revenue sources for many brands will fizzle out over the year. One source told The Grocer that Nestlé saw no other option but to pull out of the vending market. Although the food giant said no decision had been made, it concedes that a review is under way and that only a few of its lines meet the new standards.

Some refuse to take the news lying down. Pre-empting changes to vending rules, Coca-Cola has

already ditched its usual range in favour of a more overtly healthy one including Minute Maid

100% Juice, Capri Sun 100% Juice, Appletiser and Malvern water. A spokeswoman says that although vending regulations do not come into law until September 2007, it wanted to avoid any confusion

between changes this month and next year by removing its core fizzy drinks in one fell swoop.

Other brands, such as Sun Valley's You Are What You Eat snack range, expect to capitalise on the changes. The company is about to launch a range of dried fruit mixes to add to its nuts, seeds and other fruit lines for both the vending and tuck shop markets.

Sun Valley spokeswoman Carolyn Evans says that its new Schoolz range was devised with the school criteria in mind. "Most schools have changed their policies all in one go for the start of the year. We're already seeing an upturn and in trials with schools we have found that kids would buy our products rather than going out to the shop to buy sweets."

Not everyone agrees. Independent retailers predict that schoolchildren will be driven to buy more chocolate and fizzy drinks from their stores. Trevor Collings, sales director at Spar retailer Lawrence Hunt, says most of its stores are close to schools. "If children can't get what they want from schools, they'll be tempted to get it from us," he says.

However, some may not fare so well. One Top 50 retailer says a nearby school has stopped children leaving at lunchtime and fears others could take similar measures if the healthy-eating craze goes further.

Meanwhile, the supermarkets have decided to avoid any promotion of unhealthy ranges and take advantage of the healthy lunchbox opportunity instead. Sainsbury's has been running a Good Stuff for Lunchboxes scheme since last year, using shelf-edge labelling and stickers to highlight healthier food for kids. Asda has introduced its Green Card, which can be bought by parents for kids, charged up and spent only on healthy food.

The campaign against unhealthy foods in schools also has some allies in rural UK. Despite the chip's bad image, potato growers believe the health drive will benefit their sector. "In the long run it will boost sales by associating potatoes with a high vitamin C content and low fat," says market analyst Denis Alder at the British Potato Council. As a result, the BPC is pushing the benefits of jacket potatoes to school caterers in a new campaign.

The Milk Development Council is taking a positive stance, too. "Children are getting the taste for milk at school and are choosing it out of school as well," says marketing director Liz Broadbent. "Every farmer is supplying primary

produce with lots of nutrients."

But the NFU's food chain boss, Robin Tapper, is more cautious. "Potentially it is good because it supports British-produced food. But if, once the school meals thing is up and running, the government takes a similar cost-saving stance as with NHS outsourcing procurement, it would blow the good work out of the water."

So, while there appears to be

little scope for crisps, sweets and chocolate manufacturers, they may be able to recoup some sales in local shops. And the space they've vacated in schools could provide elbow room for manufacturers of healthier lines to turn their ranges into tomorrow's bestsellers.n

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