Consumer Affairs Minister Ram Vilas Paswan has suggested that warning may be displayed on fast foods just as it is done for cigarettes. South American countries Chile and Ecuador have already made it mandatory for sellers to display warning on foods high in sugar, salt and fats that they are harmful for health. Such foods do not provide the minerals and other micro-nutrients necessary for good health. This is especially harmful for children. They become fat. This leads to stunting of their overall growth.
The government had imposed a ban on the sale of Maggi noodles because of higher than permissible levels of lead found in them. While this stringent action was welcome, it constituted only a small part of the larger problem of fast foods. Big companies produce unhealthy foods like pizza, candies and soda that are heavy in fats and sugars and low in other essential nutrients. They launch massive marketing campaigns and persuade the public, young school going children in particular, to consume these harmful foods. The World Health Organisation has said that diabetes, heart diseases, cancer and chronic respiratory diseases cause a large number of deaths every year.
Big companies target school going children to expand their market of these harmful food items. They place advertisements of these foods in middle of children’s programmes. Cartoon characters are printed on the boxes of these items. Free samples are distributed in schools. Promotional campaigns such as sponsoring school events are undertaken. A picture of fun is painted in the minds of the young; and the harmful effects of these foods are hidden. Children are unsuspectingly led to consume harmful foods which results in them being fat and malnutritioned. There is an excess of fat but shortage of essential elements in their diet which leads to disease.
The government is aware of these negative impacts. The taxes on soft drinks were increased in the last budget to curb the spread of such foods. But the government also wants to attract FDI. Coca Cola has promised to invest five billion US dollars. This investment will create demand for bottles, transport, and labour. Thus the government is reluctant to regulate these companies more thoroughly lest they run away and the possible economic growth does not take place. These economic benefits of large companies are true; but only one side of the story. The consumption of fast foods leads to bad health and deaths which leads to a huge loss to the economy. The WHO has assessed that India will suffer a loss of national income from diabetes and cardiovascular disease at 336.6 billion US dollars corrected for purchasing power. This means that gains to the economy from the entry of big companies is small in comparison to the loss from the deterioration of health of our people. Yet the government is pushing for such investments because the benefits from establishment of these factories are directly visible while the losses from deterioration of health are “invisible.”
People are shortsighted like the government. Economic theory holds that the consumer knows how to maximise his welfare. We must assume that his welfare is increased by the consumption of pizza and carbonated drinks if he chooses to buy them. It is forgotten though that a condition underlying this economic theory is of “informed” choice. It is assumed that the consumer knows the harm that is done to his health by the consumption of these fast foods. Here lies the problem. The companies launch large campaigns to communicate the benefits from expanded choice, good ambience of restaurants and quick energy obtained from the consumption of fast foods. But the harm from obesity and malnutrition are not told. Thus the consumer is surreptitiously led to believe that his welfare will be increased by the consumption of these foods while actually it is reduced.
Government intervention is accepted for rectifying such situations. For example, the government has banned the placement of advertisements for liquor and cigarettes. The idea is that people do not truly understand the negative impacts of consumption of these goods hence the government should step in as a trustee of people’s health and act. People might like to consume more liquor but the government says no; and dissuades them from this consumption to enhance their welfare that they do not themselves understand. It is necessary for the government to step in and dissuade the consumers from consuming fast foods in the same way.
Many developing countries have made rules to prevent such advertising aimed at school children. Costa Rica has banned chips, cookies, candies and carbonated sodas from elementary and high schools. In Mexico, schools are barred from serving or selling sugary sodas, juices or processed snacks; and directed that all tacos, burritos and salads are to be low in fat. Peru requires sale of only healthy food in school cafeterias. Philippines has prohibited sale of carbonated drinks, sugar based synthetic or artificial flavoured juices, junk foods and any food product that may be detrimental to the child’s health in schools. Only nutrient rich food like root crops, noodles, rice and corn products in native preparation, fruits and vegetables in season and fortified food products labeled rich in protein, energy, vitamins and minerals, milk, shakes and juices prepared from fruits and vegetables are allowed to be sold.
The Foods Safety and Standards Authority of India (FSSAI) sets the standard for foods that are sold. The ban on Maggi noodles came because the amount of lead was found to be in excess by its standards. But the role of FSSAI is restricted to ensuring safety of the food items. FSSAI does not have the mandate to assess the health impacts of fast foods, let alone regulate the marketing campaigns to promote these items. It is necessary that the government enacts a law to regulate the manufacture, sale and marketing of fast foods.
The need of the hour is to go beyond the marketing campaigns held in schools and regulate the entire economic system of these harmful goods. The suggestion given by Consumer Affairs Minister to display warnings on fast foods is a step in the right direction and must be welcomed.
Author was formerly Professor of Economics at IIM Bengaluru
