Food items that are high in sugar, salt, saturated fat and artificial sweeteners could soon come with warning labels for consumers, and South Africa’s sugar industry and food manufacturers are worried this will affect sales, profits and jobs.
Thomas Funke, chief executive of SA Canegrowers, said the proposed labelling regulations are a lose-lose proposition because there is no consensus on whether labels actually change consumer behaviour, reduce sugar consumption and decrease health problems such as obesity.
“This means that food manufacturers could incur significant costs to implement these regulations for potentially no benefit to society,” Funke said.
“On the other hand, if the regulations work, they will directly reduce the revenue to the country’s sugar industry and therefore to South Africa’s small-scale growers.”
The health department gazetted the draft Regulations Relating to the Labelling and Advertising of Foodstuffs earlier this year and has made the document available for public comment until 21 July.
The draft regulations propose that any pre-packaged foodstuffs high in sugar and fat come with warning labels known as front-of-package labelling. Other amendments reinforce rules already in place for product packaging, such as ingredient lists and sell-by dates.
Funke said research from the Bureau for Food and Agricultural Policy showed that if the regulations reduce demand for sugar by 150 000 tonnes, the country would lose more than 25 710 hectares of sugarcane.
Most of the hectares lost would be on KwaZulu-Natal’s North Coast, where agri-processing business Tongaat Hulett is in business rescue, which has had a negative effect on cane farmers.
Tongaat Hulett entered into business rescue in October as it struggled to pay its debts. Another sugar mill, Gledhow, entered into business rescue earlier this year.
“The sugar industry is working to diversify the sugarcane value chain beyond sugar production in order to ensure its long-term sustainability and profitability.
“However, this is extremely challenging within the context of job-killing policies, such as the Health Promotion Levy (sugar tax) and the proposed new food labelling regulations.
“Instead, we need policies and investment that encourage the diversification project, so growers can produce products other than sugar and, in this way, ensure the sector’s long-term survival,” Funke said.
The health promotion Levy on sugary beverages was introduced on 1 April 2018 to give effect to health policies put in place to counter the rise in diabetes, obesity and other health problems in South Africa.
“The national government still hasn’t conducted the dietary intake study proposed by the sugar industry to determine what factors in particular are contributing to the country’s obesity rate.
“The sugar industry remains committed to working with the government to introduce a holistic plan to tackle obesity levels and encourage healthier lifestyles while still protecting the sector and the one million livelihoods it supports,” Funke said.
In terms of employment being affected if the new regulations are passed, Funke said the industry could lose up to 9 600 permanent jobs and 15 000 seasonal jobs in the next 10 years. This is up from the 6 000 permanent jobs and 9 600 seasonal jobs the sugar industry is projecting to lose in the next decade as a result of the two millers in business rescue and the effects of floods, load-shedding and high input costs.
But according to Angelika Peczak, the nutrition programme manager at civil society coalition Heala, the sugar industry would always argue that such regulations would affect their profits and employment.
“I know [the Wits Centre for Health Economics and Decision Science] has done research to see how the sugar industry was affected when it came to employment, because the industry does have this argument that there were so many job losses when the sugar tax was implemented, but it has actually been disproved,” Peczak told the Mail & Guardian.
“At the end of the day, we must also remember the industry is just fine. The industry is there to make profit because they are businesses — they don’t necessarily have the best interest of the consumer at heart; their interest is, unfortunately, the business model.”
Chile was used as a case study for the implementation of the warning labels, according to Peczak, because the South American country had some success in using them.
“What [the department] saw in Chile is that even though they’ve been successful at decreasing the amount of unhealthy products being bought by consumers, they’ve also seen that it hasn’t actually affected the industry’s profits, wages and employment.
“So that’s really good news, because it’s just doing good for the public,” she said.
In 2016, Chile implemented mandatory use of front-of-package warning labels on foods and beverages high in energy, sugars, saturated fats and sodium to tackle its obesity epidemic. In addition, such foods can’t be sold or offered in schools and can’t be promoted to children under 14.
According to a study by the International Journal of Behavioral Nutrition and Physical Activity, at the time of the implementation of the regulations in Chile, obesity and diet-related diseases had reached epidemic proportions.
It was found that one out of four school children between the ages of six and seven and a third of the adult population — anyone above the age of 15 — was obese. A high body mass index and diet-related risk factors were the main cause of premature death and disability in the country.
Peczak said although other countries were used for information, the draft legislation is based on South African research.
“They’ve looked at South African products, looked at South African data. They’ve also even tested the warning labels on South African consumers.”
A study by Wits University found that by September 2022, 27% of South African adults were obese, and that the cost to the health system of obesity starting at the age of 15 amounted to R33 billion a year. This represents 15.38% of government health expenditure. The annual per person cost of people being overweight and obese was R2 769.
The biggest share of the R33 billion bill comes from treating diabetes (R19.86 billion) and cardiovascular disease (R8.87 billion).
Other research has found that South Africa has one of the highest obesity rates in the world, with a projected increase by 47.7% in females and 23.3% in males by 2025.
‘There was a realisation that there was a need to have certain regulations in place that can help protect the public from having non-communicable diseases, such as hypertension, diabetes and obesity.
“The regulations, in particular the implementation of the warning labels, will also help people realise that there are lots of foods out there that are actually making them sick,” Peczak said.
She said that, in the past, food labels had been misleading, so the draft regulations propose that manufacturers be prohibited from putting another claim on a product that has a warning label because it has a nutrient of concern.
For example, the front-of-package label will say “high in sugar” so the same product cannot have a “good for the environment” claim as well because this could be confusing to the consumer.
South Africa’s largest food producer, Tiger Brands, said in their current format, the draft regulations proposed sweeping changes to the packaging design of certain consumer products which, if implemented, would adversely affect some of its brands and the composition of some of its foods and beverages.
“Implementation of any labelling changes will come at a cost. Additionally, any changes to product formulation and mandatory redesign of product branding, advertising and communication will have further cost implications yet to be quantified,” Tiger Brands said in a response to questions from the M&G.
The company said it was still reviewing the draft regulations and also looking at how labelling regulations have been implemented in other countries “so that we may extract learning as applicable, including the impact on positive consumer behaviour”.