UK government issues on guidance on food promotion and location restrictions

From 1 October 2022 retailers in scope of the 2021 Food (Promotion and Placement) (England) Regulations will be required to comply with certain location and volume price restrictions in relation to high fat, salt and sugar (HFSS) products sold by them. The regulations sound the death knell for familiar offers such as ‘buy one get one free’ on HFSS products.

Location restrictions will apply in several areas of stores including near queueing areas, store entrances and aisle ends. The same restrictions apply online to areas such as website entry pages, landing pages for other food categories, and shopping basket or payment pages.

However, there is considerable complexity for businesses to grapple with to ensure compliance: firstly, to understand if they are in scope of the regulations, and then to determine exactly what compliance may entail.

The guidance itself is lengthy and in places complex, which is perhaps another indicator of the difficulties likely to be encountered by businesses as they seek to ensure compliance. The hope will be that enforcement authorities will take this into account, at least for a period, as businesses strive to meet their obligations.

Who is in scope?

With limited exceptions, the regulations apply to all retailers with over 50 employees wherever those employees are located, which sell relevant food products, even if that is not their main business. The regulations therefore catch businesses such as fashion stores that sell sweets and chocolate at the tills.

Businesses such as wholesalers who only sell food to other businesses and not directly to consumers are not in scope.

Stores with less than 2,000 square feet of floor space, specialist stores like sweet shops or chocolatiers selling one type of food product, and all restaurants are excluded from the legal requirements, save for a prohibition of free refills of sugary soft drinks.

The restrictions apply to all businesses that sell food and drink in England, no matter where the business is registered.

The guidance confirms that the out-of-home sector, for example restaurants and cafes where premises are used mainly for the preparation or sale of food intended for immediate consumption, does not need to comply with location and volume price restrictions but must comply with the restrictions on the free refills promotion of certain drinks.

The exemption for the out-of-home sector from location and volume price restrictions applies to all foods, including prepacked foods.

Guidance is also given on the operation of concessions, defined as separate businesses operating in an area within the store of a qualifying business. These are excluded from the store’s relevant floor area if they operate their own payment facilities. There are no restrictions on where such concessions and their food products should be located when they are located within a qualifying business’s store.

For example, cafés within supermarkets that are run as separate businesses are not subject to the volume price or location promotion restrictions because they are out-of-home businesses.

Vending machines that have payment facilities operated by a business other than the business primarily responsible for managing and operating the store they are in are considered a concession, and therefore not part of the calculation of the relevant floor area of the store. Vending machines are also excluded from the location restrictions applicable to the qualifying business they are placed in.

However, the guidance expressly encourages qualifying businesses “not to allow vending machines selling specified food to be placed in restricted areas of their stores”. Vending machines may be subject to the volume price promotion restrictions if operated by a qualifying business.

Where a concession meets the criteria as a qualifying business in its own right, it must comply with the promotions and location restrictions.

Which products are affected?

Whether a product is in scope of the regulations depends both on its appearance in schedule 1 of the regulations, and its scoring in accordance with the nutrient profiling model (NPM). Guidance and some examples of foods both inside and outside the scope of the regulations is given, including on meal deals, hampers and online sales.

The issue is complex and may well prove challenging for some businesses and particularly for those which just slip into the definition of ‘qualifying business’.

Guidance is also given on matters such as restricted areas, multi buys, ‘dump bins’ and special offers.

The guidance reminds retailers in scope of the regulations that they are responsible for ensuring they comply with the restrictions set out in the regulations. It notes that most of the necessary information to calculate NPM scores – such as the amount of energy, sugar or fat in the product – is already provided on packaging.

Manufacturers are expected to provide further information if retailers require it, and may also choose to provide NPM scores to retailers if they wish retailers to promote a product that is in a schedule 1 product category but that is not HFSS or ‘less healthy’ due to its NPM score.

The government’s aim is to shift the balance of promotions towards healthier options – such as minimally processed and nutritious food – and maximise the availability of healthier products that are offered on promotion to make it easier for people to make healthier choices by encouraging retailers to use promotions for healthier foods.

However, the position is not clear cut. The hope is that the government’s laudable aim does not lead to unforeseen consequences, and overburdening of conscientious retailers, particularly in the current climate.