Examination of Witnesses (Questions 360-379)
MR DAVID
NORTH, MS
LIZ KYNOCH
AND MS
PENNY COATES
29 JUNE 2004
Q360 Mr Mitchell: Tesco's recently got
a traffic lights system, which is going to start in September.
I think it is the kind of thing that the Consumers' Association
has been urging. Why did you decide that the time was right to
do this?
Ms Kynoch: We are constantly doing
customer research and asking customers what they want. One of
the things they are telling us is that nutritional information
and information in general on the pack is very confusing. I know
that you have just had a long conversation with the Co-op about
that very point. They are saying it is confusing. One of the things
we look to do is see what information we could possibly provide
that is as meaningful as possible and that would be simpler for
consumers. That is why we have come up with the traffic lights
system. We have gone through various stages of mock-ups and looked
at it with consumers. They have said that they feel this would
be good for them; it is quick and easy to recognise. It will be
on the front of the pack; there will be green, amber and red.
There is an acknowledgment from them that they understand that,
that they understand that the products in the green zone are the
products which of course are going to be good for you. That does
not preclude them wishing to buy products which in some cases
may be labelled red for perhaps fat because they know that they
should not have too much of that. Really it was down to customers
telling us what they wanted. Of course, we provided various ideas,
but this is the science behind it. The customers are the ones
to listen to in this instance. That is why we have chosen to go
with a traffic lighting system on the front of our packs.
Q361 Mr Mitchell: I understand that.
You are going to have traffic lights for fat, concentrated fat,
sugar and salt. If you take marmalade, I like marmalade, so it
is going to be green—green for guzzle in my case—on
everything except sugar, where it is going to be red. That is
a bit confusing, is it not?
Ms Kynoch: You have chosen something
that you only need a little drop of each day, I suppose, so it
would be quite difficult to overdose fully on marmalade. To be
fair, nutrition is a very complex subject and trying to explain
even what we deem as scientists as a relatively simple calorific
fat content is hugely difficult. What we are doing is oversimplifying
it by going for the traffic light system. You do not just eat
marmalade all day, so that is only going to be little bit of your
diet. Clearly I am sure you will then balance what you have for
your breakfast, your marmalade, by choosing some other products
which are green, so you will be choosing a good quality breakfast
cereal with skimmed or reduced fat milk in order to balance that.
People did not see products labelled red as evil and that they
must not eat them; they accept that life is a balance. I think
no customer would expect a nice cream bun is going to be pretty
green but they will probably balance that by making sure that
they have the healthier options as part of that meal or as part
of another meal during the day.
Q362 Mr Mitchell: I am not sure I have
got the willpower to do that.
Ms Kynoch: We have not started
selling willpower tablets yet but I suppose it is a possibility.
Q363 Mr Mitchell: As a follow-up to that,
I get very confused by the conflicting warnings given by various
health people. I am not quite sure really whether we have a scientific
basis for the information about the effect of salt, the effect
of sugar, the effect of fat, and so on. Are all these cases sufficiently
proven to simplify them into a traffic light system?
Ms Kynoch: If they are not sufficiently
proven, there is some extremely strong evidence to suggest that
sodium disrupts the sodium pump in your body that leads to coronary
heart disease, much the same as with smoking and, yes, you can
get lung cancer and all sorts of other things. If you like, it
is beyond circumstantial evidence, so it is enough to be taking
heed of. You are right that food is made up of a number of different
components. Fat could be one of them; sugar could be another.
There is salt to consider and then there is the overall calorific
content. There are negative messages about too much of each of
those. It is not that the messages are conflicting. It just so
happens that food is a mixture of all of those things, which is
why it makes it very difficult.
Q364 Chairman: Will Asda introduce a
traffic lights system?
Ms Coates: We have clearly discussed
the traffic light system. I think you are probably aware of some
of the packaging we have at the moment. Customers say that things
like the medals on this box work very well for them because
these are quite clear and they can spot them. The opportunity
to turn those into traffic lights is obviously there. We were
really waiting to see whether we decided as an industry to go
with the common approach, because I think it is a very positive
approach to take, provided we decide what we are traffic lighting
and we do it consistently. Otherwise if, heaven forbid, some of
Asda's shoppers were to shop in Tesco one day, we would want to
make sure that red and amber and green were consistent in all
of the supermarkets. I guess.
Q365 Mr Jack: How much work do you do
in deciding what the base knowledge is of your customers about
the various sorts of average daily intakes that they are supposed
to have? If you do not do this, all of this discussion about all
this information is a bit meaningless because there is no benchmark
against which to compare it. Do you feel (a) any obligation to
help your customers know that information and (b) do you provide
it?
Ms Coates: We provide recommended
daily allowances on packs according to the current recommendations.
I think again the data is that the recommended daily intakes would
vary according to age, size and whether you want to reduce weight.
Q366 Mr Jack: The question I asked is
not so much what you are doing but do your customers know this?
In terms of your service, both companies spend a lot of time talking
to customers. What is the level of customer awareness about what
they ought to be taking in?
Ms Kynoch: I think it is very
low indeed. People are very influenced by the media. If there
is talk of fat being very bad for you, saturated fat, then that
is what they pick upon. If the latest media topic is salt, then
that will also be picked up on. At best, the guideline daily amount,
the 2,000 calories for women and 2,500 calories for men, is probably
a more recognizable phrase. I think people see that amount and
can in some cases decided to add up and make sure that they do
not have more than that intake a day. In general terms, unless
you happen to be a scientist or a nutritionist, I would say that
the consumers' understanding and knowledge is quite poor.
Q367 Mr Jack: We have on the one hand
a lot of information but poor benchmarking. Do both of you run
what might be described as healthy eating ranges?
Ms Coates: Yes.
Q368 Mr Jack: You label these accordingly
so that people can differentiate between the unhealthy stuff and
the healthy stuff.
Ms Kynoch: It is very clear; in
Tesco's case it is a brand all of its own that we have been running
for 25 years, so it is easily recognizable, yes.
Q369 Mr Jack: How do you decide what
goes into the brand?
Ms Kynoch: I suppose it is like
any product development: in some cases you are following food
trends, and that is why you launch ranges of sushi if that was
in vogue. At the time when you are launching a product, you may
well consider whether it should be a healthy living product, whether
it should be a Finest product or whether there is room for a Value
line. I think it really just depends. It is driven by what consumers
want to buy essentially.
Q370 Mr Jack: It is driven by what consumers
want to buy and yet in your previous answer you told me that,
in terms of awareness of what they ought to be buying, there was
a low awareness.
Ms Kynoch: It is the NPD [New
Product Development] of products; if it is in vogue to eat sushi,
then we will launch a range of sushi. The question I answered
was separated somewhat from their ability to understand a nutritional
label on a pack. You extend product ranges because that is what
people want to buy, not necessarily because they need to buy a
reduced fat product. In many cases it is not possible to make
a product fit into the tight criteria we have for healthy living,
and so you add to the ranges those products that it is physically
possible to make with low fat and lower sugar and lower salt.
Q371 Mr Jack: I am wondering how meaningful
you actually feel putting labels like "healthy eating"
on a product actually is?
Mr North: On that point, there
is a question of trust on the part of the customer. As Liz Kynoch
was saying, our Healthy Living range was launched in the mid-1980s.
We also have a Healthy Living Club, for which I think we have
175,000 members, and so we communicate through our Healthy Living
Club messages about healthy living and healthy eating. Our customers
do not generally come in and say, "What is the specification
for a product to enter the Healthy Living brand?" although
if they did, we would be able to tell them, for example, that
it must contain 10% less sodium or 3% less fat, or whatever, than
a standard product. They trust the brand if they want to eat a
product that, combined with other things they do in their lives,
will on balance give them healthier living and our Healthy Living
brand will do that for them, or will help them to do it.
Q372 Mr Jack: You do not think it is
a conscience thing, do you? They have one of your healthy meals
a week and then think, "Right, I have done that. I can go
back and indulge now"?
Ms Coates: We do not want customers
who say they eat the Health Eating range during the week and then
they will have other ranges at the weekend or go out to eat at
the weekend. Some customers consciously do that if they are watching
weight.
Q373 Mr Jack: Is that what we would call
a balanced diet?
Ms Coates: We do not encourage
them to do that. They choose to do so.
Q374 Mr Jack: What I am trying to get
at is whether, with all this information, people say, "Yes,
I understand it, yes I believe it, yes, I will react to it"?
I am interested in terms of the feedback you get from customers.
You said, Mr North, a minute ago that you had 175,000 people in
your Healthy Living Club "and we send them messages".
What questions do they come back and ask you? I presume this club
is interactive, is it?
Mr North: It is and customers
will come back with questions. It is precisely those sorts of
questions that have led us to develop our traffic lights system.
When we ask customers or when customers speak to us spontaneously,
one can see an increasing trend of customers saying, "We
are more concerned about healthy living. We are more concerned
about issues like obesity", partly because of what they read
and partly because of what they see and experience. What they
will then say is, "We understand that retailers, manufacturers,
or whatever, provide lots of information". Nonetheless, again
as I think we heard during the evidence that you took from the
Co-op, they will say on the one hand that there is already a plethora
of information but that, perhaps because of the amount of information,
some of it is hard to understand and hard to interpret. That was
why we then devised, for example, the traffic lights system and
customers responded by saying, "If you were to do that, then
we would, on balance, find that helpful". As Liz Kynoch said
earlier, they did not respond by saying, "If we saw red,
we would not eat it or would not buy it. We would act with moderation
in choosing between products and in choosing an overall balance
of products".
Q375 Mr Jack: Let us move on to Europe
because a lot of the labelling requirements come out of Europe.
I gather that Asda have expressed concern about the review that
is to take place on nutrition labelling. Would you like to tell
us why?
Ms Coates: I think at the time
we raised concern about the review into nutrition labelling it
was about having individual traffic lights for salt, fat and sugar,
or having a traffic light that represented salt, fat and sugar.
It may be that one is very high and one is very low. I think we
just wanted to make sure that a balanced diet was introduced.
If we were going to support something like a traffic light labelling
system, then doing something on energy density or something that
is most important to the majority of customers was what we were
concerned about.
Q376 Mr Jack: Can you tell me what energy
density is?
Ms Coates: Calories per 100 grams.
Q377 Mr Jack: What contact do you have
with other supermarkets in other parts of the Community about
how they react to all this? Are people in Italy, France and Germany
as obsessed about all of this as we appear to becoming here?
Ms Coates: I do not know the answer
to that.
Q378 Mr Jack: You have the European Union
busy reviewing this nutritional labelling for a universal application
throughout 25 countries in the European Union and you have not
talked to another retailer about it?
Ms Coates: We talk as part of
the BRC. We are obviously not in contact with other retailers
on a regular basis for competition reasons. We would talk through
the BRC generally on topics like this. We have been doing that
on a UK basis rather than a European basis.
Q379 Mr Jack: From evidence that we have
heard before, there are some serious questions about labelling,
full stop: purpose, content and all the rest of it. This is universal
labelling across Europe. I am just surprised that there has not
been any dialogue store chain to store chain. Maybe that is the
way that you are approaching these matters. What about Tesco,
because you have a presence in other Community countries, in Hungary
and in Poland?
Mr North: We do have a presence
in some other Member States. There is dialogue through bodies
like EuroCommerce. Although the response will differ Member State
to Member State and an issue like obesity will have a higher profile
in some countries than in others, the concerns that Penny Coates
has expressed about the proposed Directive I think were pretty
widely shared. That is why the Commission has said that it will
look again. It is important sometimes to differentiate between
the objectives behind the proposed legislation, some of which
were perfectly laudable, and sometimes what one fears might be
perverse effects. For example, we were concerned that our Healthy
Living products would be threatened by that Directive, which we
thought was a perverse effect. It is similar to the perverse effects
of some other legislation, for example the reason why both ourselves
and Penny Coates's company are being prosecuted by Trading Standards
departments for promoting the Government "five a day"
message.
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