Examination of Witnesses (Questions 570-579)
13 NOVEMBER 2003
MRS CILLA
SNOWBALL, MR
BRUCE HAINES
AND MR
ANDREW BROWN
Chairman: Good morning, colleagues. Can
I begin by welcoming our witnesses and expressing the thanks of
the Committee to you for coming before us on this inquiry. Would
you briefly introduce yourselves and tell us about your organisations?
Dr Naysmith: Before you do that, Chairman,
may I register the fact that I am a member of two national co-operative
societies and I am also a Labour Co-Operative Member. I say that
because I know some of the things we may touch on may also touch
on co-operatives in wider aspects.
Mr Jones: I am also a member of the Co-Op
Party.
Mr Bradley: I register the same interest
John Austin: I register the same interest.
Q570 Chairman: Mr Haines, could you
say something about your own background?
Mr Haines: I am Bruce Haines and
I am the Group Chief Executive of Leo Burnett Ltd., London. I
joined the agency about 18 months ago. This is my thirtieth year
of working in the advertising industry. I have worked across a
whole variety of client accounts in my time. Primarily now I am
responsible for the running of the agency rather than any particular
interest in a particular account. Obviously, as the Chief Executive
of the agency, it is my responsibility to see that our advertising
product is up to standard.
Mr Brown: My name is Andrew Brown
and I am Director General of the Advertising Association, which
is a job I have held for about ten years. Prior to that, I worked
at J Walter Thompson for 28 years as an account manager or the
person responsible for managing business. In 1995, the Advertising
Association set up the Food Advertising Unit as a dedicated unit
with its own funding stream to deal with the issues surrounding
the advertising of food to children. I am representing the FAU
as well as the Advertising Association.
Mrs Snowball: I am Cilla Snowball.
I am the Chief Executive of Abbott Mead Vickers—BBDO. I
have worked in advertising for 20 years and I have been at Abbott
Mead Vickers for 11 years.
Q571 Chairman: May I first thank
you for the written information and the evidence that you have
sent us, which is very helpful. Some of the questions obviously
will be based on the evidence that you have given us. One of the
points I wanted to raise at the start is that my understanding
of your perspective is that advertising works by increasing the
market share of a brand within a product category as opposed to
growing markets overall. This is an argument that I think you
put forward collectively. It strikes me that there are some parallels
with the kinds of arguments that we have heard from the tobacco
companies when two or three years ago we looked at the issue of
their advertising and the impact on the use of tobacco products.
Would you not accept that you have a very clear role in respect
of consumption overall, and obviously we are looking at consumption
from the point of view of its contribution to obesity. Is that
not a fact that you would accept and, if so, where does that leave
us in respect of how we address this very worrying health issue?
Mr Brown: I think the parallels
with the tobacco case are really very limited. Food is a much
more complex issue. We are dealing with issues of diet and energy
in and energy out in the context of obesity.
Q572 Chairman: I accept that it is
a completely different issue. What are the parallels in respect
of advertising?
Mr Brown: I understand that. Tobacco
is a relatively homogenous market; that is the point I am making.
Food and soft drinks are not; they are very complex. As a generalisation,
and it is true I think as a generalisation, in most mature markets
brand advertising does not have an effect on increasing market
size. In new and young markets, the reverse is the case. If you
look at computers and mobile phones and markets like that, the
advert of brand advertising has helped stimulate and grow those
markets. If you look at quite established markets in food, the
cereal market for example, the cereal market is down in volume,
despite it being very advertising intense. If you look at alcohol,
the only sector in the alcohol market which is resulting in an
increase in per capita consumption is white wine, which is the
least advertised category. The heaviest advertised category is
beer and that is in decline. The overall argument I think is right,
that brand advertising is designed by agencies and their advertisers
to compete with other brands. It is not designed to grow categories,
which quite often could lead to their competitors' advantage.
Q573 Chairman: In your evidence to
us, Mr Brown, you make the point that various groups have suggested
that food advertising has no influence on consumption at least
at a category level.
Mr Brown: Correct.
Q574 Chairman: Was there any reason
that you did not refer to the comprehensive surveys commissioned
by the Food Standards Agency, which came out in September and
which came to somewhat different conclusions to the study that
you refer to?
Mr Brown: Yes, there was a very
specific reason why we did not refer to it. It is a very big and
complex study of 200 pages with another 200 appendices. What we
have done is to send it out for an independent academic assessment.
Understanding the conclusion it came to was beyond our competence
basically.
Q575 Chairman: Basically you are
saying that you have not had an opportunity fully to analyse it?
Mr Brown: We have now. We will
get our report on the analysis of the Strathclyde Study in two
weeks' time, but we did arrange a meeting with the Food Standards
Agency on Monday between our researchers and themselves to talk
about some of the issues that our researchers have raised. It
would be my intention, as soon as we get the report and we have
had those discussions with the FSA, that if your Committee would
like our findings, we will pass them on.
Q576 Chairman: That would be very
helpful. Do either of your colleagues want to respond on these
general points?
Mrs Snowball: I would agree with
Andrew Brown on the point about cigarette and tobacco advertising.
A piece of context as regards AMV, as far as AMV is concerned,
we have always refused tobacco business on the basis that we believe
cigarettes are dangerous. By the manufacturers' own admission,
there is no such thing as a safe cigarette. That is why as an
agency we vigorously supported a ban on advertising and we refused
tobacco business, but we do see a very different situation in
the advertising of food and drink to children. We would not accept
that the products are dangerous. Hopefully, the evidence we were
able to give you on our markets demonstrates that we are operating
in both snacks and soft drinks in two very mature markets where
the issue for advertisers is to fight for share. It is a fight.
They are very competitive market. In the case of colas, the market
is showing marginal growth but all that growth is coming from
the low sugar variants. In the case of snacks, the market is actually
in decline. I think your question on consumption has to be set
in that context. The consumption argument would only have validity
if the markets were seen to be growing vigorously, and they are
not.
Q577 Chairman: What do you actually
mean by "the markets"?
Mrs Snowball: I mean the two markets
for which we are responsible, soft drinks and snacks. They are
mature markets; they are not showing growth. There is marginal
growth in colas but not in snacks. That is to indicate that our
role is really to fight for share in those markets, not to encourage
consumption or over-consumption—to fight for consumption
of our brands but not to grow the categories.
Q578 Chairman: You would accept that
there is a lot of evidence that the markets in fast food have
had very significant growth in recent years? There are big arguments
about what the contribution has been to the obesity problem, particularly
of children.
Mrs Snowball: I think the role
of advertising is very difficult to isolate from other factors
that have an influence on children in particular. The FSA study
pulled out that fact, that it is very difficult to assess the
relative contribution of advertising alongside other much more
influential factors, such as parental influence, peer influence,
the influence of television and, most importantly, the influence
of their lifestyle, what they are doing, the whole calories in/calories
out balance. It is very difficult to isolate advertising as the
sole cause. I think everybody agrees that there is no conclusive
proof of that.
Mr Haines: I would agree with
what Mrs Snowball and Mr Brown have said. It is very much the
case within mature marketplaces that there is effectively a commercial
war going on. We do want our clients to take share. We very rarely
experience the effect of advertising being that people will switch
from one category to another. The influence is absolutely within
the category itself. On the issue of fast food, there obviously
has been growth in that particular market, but then there has
been an awful lot of corollary events where lifestyles have changed
enormously. We are talking about a population of people now who
are much more confident about eating out in general. This has
happened over the last 20 to 25 years. It was not a particularly
British thing that happened before. Certainly I think the arrival
of, say, my client McDonald's restaurant business in this country
gave the opportunity, very often for the first time, for families
to have a good value meal out of the home.
Q579 Dr Naysmith: I want to ask all
three of our witnesses with reference to the fact that they are
if the market is not growing, them advertising cannot be sustaining
the market. That is not true, is it? Given all the messages that
are now coming out, health messages and so on, the market would
be falling much faster if people were taking these messages on
board, if you were not continually putting out the message that
things are all right, you can carry on eating this stuff. What
I am doing is pointing out a false argument that I think you are
deploying.
Mrs Snowball: I was trying to
answer the question about whether we were promoting consumption.
| 
