Welcome to RPC Bites. Our aim in the next 2 minutes is to provide you with a flavour of some key legal, regulatory and commercial developments in the Food & Drink sector over the last fortnight… with the occasional bit of industry gossip thrown in for good measure. Enjoy!!

Access the full edition of RPC Bites here.

SeltzerGate - the ASA adopts a hard line on hard seltzer ads

Over the past year, the ready-to-drink category has thrived. The trend is partly driven by COVID-19 (and the associated increase in al fresco gatherings) but also by expanding product ranges; cue the hard seltzer. The alcohol based sparkling water drink has seen a whopping 1,087% growth since January 2020. However, the risks of marketing the lower calorie but still alcoholic option are apparent from the ASA's recent rulings against not one, but four brands: BrewDog, DRTY DRINKS, WHISP and High Water.

For all four businesses, the problematic sections of the CAP Code were Rule 15.1, which states that only specific health claims authorised on the GB nutrition and health claims register are permissible in marketing communications and Rule 18.17, which prohibits the inclusion of health, fitness and/or weight-control claims in alcohol ads.

The CAP Code defines nutrition claims as any claim which states, suggests or implies that a food (or drink) has particular beneficial nutritional properties due to the amount of calories, nutrients or other substances it contains, does not contain, or contains in reduced or increased proportions. Furthermore, the only permitted nutrition claims that can be made in relation to alcohol products are 'low-alcohol' (if indeed accurate), 'reduced alcohol' and 'reduced energy'.

We consider what went wrong for each of the ads below.

1. BrewDog – 'Clean & Press Hard Seltzer' (Ruling here)

Ad (posted on Instagram): "DUE TO ADVERTISING REGULATIONS WE CANNOT CLAIM THIS DRINK IS HEALTHY"…Even though Clean & Press is only 90 calories per can with no carbs or sugar and a little bit of alcohol, this is not a health drink. If you are looking for a health drink, do not drink Clean & Press."

Issues: “only 90 calories per can”, “no carbs or sugar” and "a little bit of alcohol".

Ruling: "No carbs or sugar" was a nutrition claim as it suggested that BrewDog's hard seltzer had beneficial nutritional properties. The inclusion of the prefix "only" meant that "Only 90 calories per can" was likewise found to be a nutrition claim. Although factual numerical calorie statements are permissible for alcohol ads, preceding them with "only" is not. "A little bit of alcohol" was also found to be problematic, as low alcohol claims are only permitted for drinks with an ABV of 1.2% or less (BrewDog's hard seltzer has an ABV of 5%).

2. DRTY DRINKS (Ruling here)

Ad 1 (posted on Instagram): “4 cans of DRTY and a scotch egg please. #spikedseltzer […] #nosugardiet #keto #ketodiet #carbfree […] #zerosugar #nocarbs #lowcalorie".

Ad 2 (posted on Instagram): “Everyone: There’s a pandemic happening and it’s baltic [sic] outside, should probably stay in. Me: Solo DRTY’s in the garden? Don’t mind if I do. #spikedseltzer”.

Issues: Text, imagery and hashtags.

Ruling: The ASA found that “#lowcalorie”, “#nosugardiet”, “#zerosugar”, “#keto”, “#ketodiet”, “#carbfree", and “#nocarbs” were all nutrition claims that were not permitted for alcoholic drinks.

A further issue for DRTY Drinks was that under Rule 18.1 of the CAP Code, marketing communications must be socially responsible and must contain nothing that is likely to lead people to adopt styles of drinking that are unwise, including excessive. By encouraging the consumption of multiple cans of DRTY's seltzer, in one sitting, by one individual, the ASA found that both ads depicted excessive drinking in a positive manner and therefore breached the CAP Code.

3. WHISP (Ruling here)

Ad (posted to WHISP's website): "Whisp is a refreshing, low calorie, lightly alcoholic sparkling water – the perfect accomplice to a balanced lifestyle… MILK THISTLE Natural detox hero!... HEALTHIER CHOICE Low in sugar, calories and alcohol".

Issues: (1) “lightly alcoholic” and “Low in […] alcohol”; (2) “low calorie” and “Low in sugar, calories …”; and (3) “MILK THISTLE Natural detox hero”, “HEALTHIER CHOICE” and “the perfect accomplice to a balanced lifestyle”.

Ruling: As with BrewDog's Clean & Press Hard Seltzer, by making a low alcohol claim in relation to a product that contained 4% ABV, WHISP breached the CAP Code. Furthermore, “low calorie” and “Low in sugar, calories …”, both amounted to a nutrition claim that was prohibited for alcohol products. Whilst ads for alcoholic drinks can provide factual information about contents, "MILK THISTLE Natural detox hero!" strayed into the general health claim territory and therefore amounted to a further CAP Code breach, under Rule 18.17.

4. High Water (Ruling here)

Ad (posted to High Water's website): “HARD SELTZERS FOR THOSE WITH A THIRST FOR LIFE...For those who love catching up with friends without undoing all the good from their active lifestyle… UNDER 100 CALORIES PER CAN".

Issues: "UNDER 100 CALORIES PER CAN" and "without undoing all the good from their active lifestyle.”

Ruling: By this point, readers will know the drill; prefixing 100 calories with "under" meant the claim was a prohibited low calorie/energy nutrition claim. The ASA also found that "without undoing all the good from their active lifestyle…” was a prohibited health claim, as it was directed at calorie conscious consumers and suggested that High Water's seltzer would be less impactful to their wellbeing than other alcoholic drinks.

The ASA also considered whether other sections of the ad breached the requirement for alcohol marketing communications to be socially responsible, by suggesting that the drink had therapeutic qualities, but this issue was not upheld.

The ASA's quadruple whammy sends a clear message to those promoting hard seltzers: comply with the CAP Code or risk the withdrawal of your ads.

Dimbleby calls for salt and sugar taxes

In the first independent review of England's food system for 75 years, in 2019, the Government commissioned Leon co-founder and DEFRA executive director, Henry Dimbleby to analyse England's food system. The intention: to "transform the food system…into something better for the future". In 2020, part 1 of Dimbleby's 'National Food Strategy' (the Strategy) focused on how to carry the country through the COVID-19 pandemic and the Brexit transition period. Now, in part 2 of the Strategy, Dimbleby has outlined a flurry of recommendations including, what has been described by food and drink suppliers as, "a tsunami of new taxes" on processed food.

Although Dimbleby's report contains 16 recommendations (which you can view here), it is recommendations 1 and 2 that have sent shockwaves through the industry:

  • Recommendation 1: The introduction of a sugar and salt reformulation tax, the revenue from which should be used to provide low income families with fresh fruit and vegetables; and
  • Recommendation 2: Mandatory reporting requirements for large food companies.

Dimbleby endorses a £3 per kilogram tax on sugar and a £6 per kilogram tax on salt sold wholesale, for use in processed foods or to restaurant and catering businesses. The tax is expected to encourage manufacturers to reformulate products so that they contain less sugar / salt in order to avoid the tax, much like the effect of the Soft Drinks Levy. The rationale for the proposed tax is to significantly cut the country's sugar / salt intake and in turn, reduce obesity, a health concern which has been at the heart of Government policy recently, due to its identification as a COVID-19 risk factor. To hold companies accountable, Dimbleby also wants to see mass reporting on sales of foods high in fat, salt and sugar (HFSS), as well as sales of protein, fruit and vegetables.

Hot on the heels of the Government's HFSS advertising and promotion restrictions (see RPC Bites issues 24 and 34 for more details), the report will be another blow for food and drink manufacturers. The Food and Drink Federation has warned that the proposed tax could lead to price increases for consumers and will put additional pressures on manufacturers who are already working hard to reformulate products so that they are better for consumers.

The industry will now sit tight as the Government considers Dimbleby's report. A formal response, in the form of a White Paper, is due to be published within 6 months. Read more

Eco-scores will be piloted on British labels in September 2021

How environmentally friendly is your supermarket shop? With more and more consumers asking this question, businesses have been quick to respond with a range of environmental initiatives. In recent issues of RPC Bites, we have reported on Gousto's carbon labelling trial (here) and the launch of BrewDog's first carbon negative beer club (here). Continuing the theme, it has recently been announced that 'eco-scores' will be piloted on British food labels from September 2021.

Foundation Earth, a non-profit NGO backed by many major brands across the food and drink industry, is launching a pilot scheme for a new 'eco-scores' traffic-light system. The scores will appear on the front of food packaging and will denote the environmental impact of the product in question, thereby allowing consumers to make environmentally conscious choices.

Scores will range from A+ to G and will be colour-coded, with the top green A+ rating reserved for the least impactful products. In calculating a product's impact on the environment, the eco-scores will account for various factors including water usage and pollution, carbon emissions and the contribution of farming, packaging and transport processes.

It is hoped that these labels will have a meaningful impact on consumer shopping habits, thereby encouraging businesses to adopt innovative ways to reduce their environmental impact in order to secure better eco-scores. Read more

Russia v France and Italy v Croatia – forget the Euros, we're talking fizz!

Russian President, Vladimir Putin, has recently passed legislation mandating that shampanskoye (the Russian word for Champagne) can only be applied to sparkling wines of Russian origin. Under the controversial new law, all non-Russian Champagne sold in Russia must be labelled 'sparkling wine'. Putin's move defies Champagne's protected appellation d’Origine Contrôlée, which in over 120 countries, means the term can only be used to describe produce from the Champagne region that has been produced in accordance with specific rules.

The French Champagne producers’ committee has said that the region is "scandalised" by the legislation and is calling on French and European officials to demand that "this unacceptable law be modified." It has also called for the suspension of champagne exports to Russia. French Agriculture Minister, Julien Denormandie, has also commented, stating "France's position is very clear. The word champagne comes from those beautiful regions of France where champagne is produced."

Italy has also been on the offensive (and not just in footballing terms), reigniting designation wars with Croatia. Prošek (pronounced pro-sheck) is a syrupy Croatian dessert wine, with little similarity to prosecco other than in name. Meanwhile, the Italian sparkling wine 'Prosecco' boasts legal protection through a suite of certifications including Designation of Controlled Origin (DOC), Designation of Controlled Origin and Guaranteed Status (DOCG), Protected Designation of Origin (PDO) and Protected Geographical Indications (PGI).

In 2013, Croatia sought EU recognition for the name 'Prošek', but its application was swiftly refused for being too similar to 'Prosecco'. Croatia has once again applied to the European Commission for special recognition of Prošek, contending that the wine has been made for over 2,000 years (far longer than Prosecco's 90 year reign).

With France eliminated from the Euros on penalties, we wait to see how it will fare against Russia in the Champagne championships. And will the European Parliament call foul play on Croatia or Italy?

British meat will continue to be sold in NI after grace period is extended

The EU has agreed to formally extend the grace period for the movement of British chilled meat products to Northern Ireland (NI) meaning Northern Irish consumers can enjoy British meat for another 3 months.

Imports of chilled meat products, such as fresh sausage and burgers, from third party countries are not permitted by the EU. Since NI essentially remains in the EU single market and is subject to EU customs checks at ports, a grace period was granted to give Northern Irish food businesses time to set up new supply chains. The grace period was originally due to end on 30 June 2021 but has now been extended, at the UK Government's request, until 30 September 2021.

The extension should ensure a smoother transition period, buying key stakeholders like supermarkets further time to adapt their supply chains to meet post-Brexit regulations. However, the UK Government has acknowledged that a permanent solution remains to be agreed and the European Commission has been clear that it is "not issuing a blank cheque" for continued postponement. So whilst the summer barbecue season is safe, the long-term future remains uncertain. Read more

ASA bans 'irresponsible' Instagram ads by AU Vodka

It's been a busy few weeks for the ASA. On 30 June, the regulator challenged various Instagram posts shared by AU Vodka as 'irresponsible', by virtue of the fact that they encouraged excessive and / or unwise alcohol consumption.

The ads in question displayed various individuals holding more than one bottle or glass of AU Vodka, whilst surrounded by several other bottles of the product. Three ads were particularly problematic: The first showed a man sitting in a forklift truck holding a bottle of AU Vodka and a glass containing the drink; The second showed rapper, Chipmunk sitting in the passenger seat of a car drinking AU Vodka with multiple bottles on his lap; and The third showed another rapper, Aitch (who is under 25) holding two bottles of the product.

AU Vodka argued that the numerous bottles displayed were for 'decorative purposes' only, that alcohol measures shown in glasses were not excessive and that individuals featured in the ads were not displaying any behaviour that suggested they had consumed excessive amounts of alcohol.

Despite these assertions, the ASA found that the posts had breached Rule 18.1 of the CAP Code, which states that ads must be socially responsible and must refrain from encouraging unwise and excessive drinking habits. The fact that the ads depicted drinking in vehicles amounted to a further breach of the CAP Code, as did the fact that the third ad featured an individual under 25 years of age (under Rule 18.16, people shown drinking or playing a significant role in alcohol ads must neither be, nor seem to be, under 25).

The ASA ruled that the ads must not appear again in their current form and advised AU Vodka to ensure that future ads do not encourage excessive or unwise drinking, or link alcohol with the use of machinery and/or driving. Read more

Morrisons shoots to score in £9.5BN takeover

Hot on the heels of the Issa Brothers' acquisition of Asda (see the previous issue of RPC Bites here), Morrisons announced last week that it has accepted a £6.3BN takeover bid.

The supermarket recently rejected an unsolicited £5.5BN offer of 230p per share from private equity giant, Clayton Dubilier & Rice (CD&R). It seems that Morrisons made the right call as it has since confirmed that a deal, worth a whopping £9.5BN in total, is pending with SoftBank-owned Fortress. The deal comprises £3.2BN of debt and £6.3BN of equity, paying 252p per share and a 2p cash dividend to shareholders. It is reported that promises over the security of Morrisons' workforce, pension holders and suppliers have also been provided.

The Secretary of State for Business, Energy and Industrial Strategy, Kwasi Kwarteng, is expected to seek assurances from Fortress over the commitments in the coming weeks. We will provide updates in future issues of RPC Bites, as the deal progresses. Read more