Hundreds of millions of pounds of marketing spend for this year’s golden quarter are “in limbo” due to confusion over the government’s new HFSS advertising rules, The Grocer can reveal.
Supermarkets and a raft of leading food brands claim they have been unable to push ahead with the usual spending decisions and creative planning on TV and associated in-store advertising campaigns, with sources warning it could deliver another major blow to the struggling economy.
Last month the Advertising Standards Authority launched a consultation on proposals which would see branded ads fall under the new 9pm watershed, due to come into force from 1 October, even if they are not specifically for “less healthy foods (LHF)”, the products outlawed under the legislation.
While The Grocer has previously revealed some companies are considering legal action over the restrictions, sources have now said the confusion is wreaking havoc on companies’ marketing plans.
“The consultation process, with the challenge of drawing a clear distinction between product and brand advertising, is placing pressure on business planning for this year’s Christmas period,” a source told The Grocer.
“It’s likely to take until May to June at the earliest to provide final guidance, possibly longer, leaving the UK’s biggest supermarkets and fmcg brands with a much-shortened window to deliver an effective advertising and marketing campaign for the critical Christmas sales period.
“This has the potential to have a massive negative impact on businesses just at a point when economic growth is vital.”
The source added: “While it is extremely difficult to split this total spend into what falls in and out of scope as defined by LHF, it would be fair to say there are hundreds of millions of pounds to be committed for this year’s golden quarter currently in limbo, waiting for clarification by government and the co-regulatory system on what can and can’t be advertised.”
Advertising sources have warned of a huge economic hit from the proposals, with more than £350m spent on food advertising on digital, social and TV in Q4 2023, according to the latest available NIQ figures.
It has also emerged advertisers expect the October ban to see the disappearance of a raft of the UK’s best-loved and most effective ads, even if they don’t advertise specific products.
Analysis of Kantar figures shows eight out of the 10 “most effective” Christmas ads of 2024 would not be permitted, including ads for Cadbury, KFC, Coca-Cola, Aldi, Morrisons, M&S and Sainsbury’s.
“Whilst the supermarket can flex what they promote, there’s little doubt the ads will look very different, particularly the range of products that may be included,” said a source.
They added: “Christmas advertising season planning normally starts in quarter one of each year, because the ad creative takes time to research, develop, produce and test before it is finished.
“It is also often integrated through the in-store experience for customers, as well as online, meaning a wide range of marketing materials are also produced in support.
“The longer the delay, the more pressure this puts on what will realistically be possible to deliver this quarter four.”
Andrea Martinez-Inchausti, deputy director of food at the British Retail Consortium, said: “We don’t believe the draft guidance has provided the clarity needed by brands and retailers.
“Businesses are waiting to press go on the latest advertising campaigns for autumn, which is why the final guidance from the ASA is so vital.”
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