By Anthony Fletcher
Food Navigator

06/03/2006- By not doing enough to tackle the growing obesity crisis, the food and beverage industry is storing up problems for the future, claims a new report.

According to Obesity concerns in the food and beverage industry from UK-based Ethical Investment Research Services (EIRIS), the food industry, while adamant that is not to blame for customers weight problems, must accept that significant damage will be done if it is not seen to be responding to the problem.
"Our research revealed little evidence of obesity-related improvement targets and key performance indicators from the multi-national food and beverage firms we analysed," said report author and EIRIS research analyst Heleen Bulckens.

"Food and drink producers are waking up to the business risks associated with obesity, but significant challenges remain."

The report identified three main non-financial risks for food and beverage producers in relation to the obesity crisis. These are changes in the regulatory environment (including rules on advertising to children and food labelling), litigation and brand risk and consumer resistance.

The study also analysed the food and beverage industry's response to the challenges presented by the growing obesity problem. While some food companies recently hit the headlines with plans for a voluntary labelling system, the report says that differences remain in the approach of multinationals to the health crisis and the associated risks posed to their businesses.

The report also found that although a number of positive steps have been taken, producers are not yet doing enough to manage their risks. The report analysed six companies: Cadbury-Schweppes, The Coca-Cola Company, Kraft Foods, McDonalds, PepsiCo and Unilever.

Of the six companies analysed McDonalds and Unilever were judged to be the slowest to adapt. They were assessed to have only limited systems in place to manage their social, environmental and ethical risks in relation to obesity.

Cadbury Schweppes, The Coca-Cola Company, Kraft Foods and PepsiCo all achieved an intermediate rating, though significant differences exist within the individual criteria used to assess the firms.

Cadbury Schweppes however scored highly for its responsible advertising / marketing to children, with McDonalds scoring lowest on this criterion. However, McDonalds was one of only two of the six companies - along with Unilever which explicitly acknowledged their role in addressing childhood obesity.

This is a crisis set to grow and grow. The incidence of childhood obesity grew from 9.6 per cent in 1995 to 13.7 per cent in 2003 in the UK alone. EU figures estimate that around 14 million EU children are currently overweight or obese, of which more than three million are obese.

Obesity now costs the NHS around £ 1.6 billion a year and the UK economy a further £ 2.3 billion of indirect costs. If this trend continues, the annual cost to the economy could be £ 3.6 billion a year by 2010.

EIRIS provides independent research into corporate social, environmental and ethical performance.