Labelling Requirements of Nutritional Information, Junk Food TV Advertising - Coursework Example

Running Head: EXTERNAL ENVIRONMENT REPORT External Environment Report Name Course Institution Date Table of Content Introduction……………………………………………………………………………………3 Labelling requirements of nutritional information……………………………………………..3 Obesity and bans on junk food TV advertising…………………………………………………5 Hazards of imported foods………………………………………………………………………7 Conclusion……………………………………………………………………………………….8 References………………………………………………………………………………………..10 External Environment Report Introduction The food industry in Australia is an integral part of the Australian economy. The food industry in Australia is known for producing a wide range of products. Despite the fact that Australia has different land types and experiences varying climatic conditions, the use of technology has enabled the Australian food industry to flourish and become a reliable supplier in the market. Nevertheless, over the years the operation food industry in Australia has succumbed to various external environmental influences that have somewhat affected its capacity to supply and sell its produces to consumers in Australia and around the globe. Basically, there are six main macro environment forces that impact the operation of firms in the food industry. They include, technological aspects, cultural, economic, political, natural and demographic aspects (McKean, 1999). This report seeks to provide an incisive outlook on the macro-environment of the food industry in Australia. This report will examine several environmental influences on the operation of firms in the food industry. Among the influences that this report will examine include: labelling requirements of nutritional information, obesity and bans on TV advertising and hazards of imported foods. Labelling requirements of nutritional information The fast food industry in Australia is one of the main segments of the Australian food industry. 44% of foods served in the commercial food sector are fast food. Recently, the Australian government through the Australia New Zealand Food Standards Code issued a new law that requires food retails to display kilojoules information. All fast food stores with over 20 outlets will be required to adhere to this law. This law came as a result of a Fast Food Forum that took place in August, 2010. This forum was attended by government officials, key industry players, stakeholders and professionals from public health. The main aim of this forum was to discuss how consumers can receive better nutritional information on in regards to food content at the point of sale(NSW Government, 2010). The newly introduced laws provide that food industries such as bakeries, doughnut chains, fast food outlets and coffee chains should clearly place kilojoules content on their menu boards, in addition to the average energy intake of 8700kj in an adult on a daily basis. Moreover, the kilojoules content should be adjacent and be of the same size with price of the food product. Through this regulation consumers are able to get information on the kilojoules content of the fast food that they order. The Australian government has also directed its efforts towards assessing the effectiveness of this regulation in improving the nutritional lifestyles of Australia by initiating and supporting educational materials that can aid consumers to understand energy consumption and kilojoules labeling. The NSW Food Authority is one of the agencies that ensure that the new requirements are fully implemented (NSW Government, 2010). These labelling requirements of nutritional information develop a leveled playing field in fast food chains, coffee chains, bakery chains and ice cream chains. Furthermore, the labelling requirements of nutritional information enables consumers to consider and make informed decision on the nutritional content of the food product that they are going to purchase. For instance, the display of kilojoules information on menu boards enables consumers to take into account of their average energy requirement prior to the purchase of a food product. Evidently, labelling requirements of nutritional information influence the daily choices of consumers in regards to the food products that they purchase. A good number people intrinsically choose to purchase food products that have essential nutritional value based on the information displayed on the labels of these products or the menu boards. In response to the labelling requirements set by the Australian government fast food chains such as the McDonalds have complied with these requirements by displaying nutritional information of their food products. Over time, the McDonald fast food chains in Australia have been committed when it comes to helping their customers to make informed decisions concerning their choices of food products. The McDonalds Company has always availed nutritional information in all its chains and restaurants. In fact McDonalds can be ranked as the first Quick Service Restaurant in Australia to implement nutrition labelling its packaging. The company believes that labelling requirements of nutritional information is part of a broader solution of addressing public health issues such as obesity (NSW Government, 2010). Obesity and bans on junk food TV advertising Junk food advertisements in Australia are evidently prevalent meanwhile a third of the total children’s population in Australia comprises of obese children. Researchers have linked TV advertisements on junk food to be a key contributing factor to the increasing trends of obesity particularly in children. Consequently, a number of experts in Australia have recommended that TV advertisements on junk food should be banned so as to curb the increasing trends of obesity (Veerman et al 2009). For instance, groups advocating for the ban of TV advertisements on junk food include the Coalition on Food Advertising to Children (CFAC), the Australian Consumers' Association and the Australian Medical Association. The agencies argue that the Broadcasting Services Act should include a clause that bans food advertising on TV during times when children under the age of twelve are watching (IOM, 2005). Currently, there are regulations that have been put in place that specifically regulate the advertisements with this regards. For instance, the Australian Broadcasting Authority issued a voluntary code that interdict television stations that run advertisements that promote unhealthy eating habits and passive lifestyles. Both advertisers and the food industry fraternity are opposed to such bans, most of them argue that food advertising is an essential stream of revenue for both the advertisers and the food industry. Without advertisements from food industries key market players would suffer (Rashad & Grossman, 2008). It was apparently established that children influence the buying patterns of their parents thus TV ads on food lay a major role when it comes to influencing the buying patterns of most people. Research studies conducted by the International Obesity Task Force and World Health Organization (WHO) linked obesity among children to food advertising on television (Bolton, 1983). Subsequent to this disclosure, consumers in Australia have changed their buying patterns as most consumers have since reduced their purchase of advertised junk foods and increased their purchase on healthier food supplies. Apparently this transition has reduced the net profits of some food industries especially those that produce and distribute junk food (Hastings & McDermott et al 2003). In Australia there are little prospects that the government will issue ban on the advertisement of food on Television. Nonetheless, the pressure to ban the advertisement of junk food on television has somewhat caused key food industry players to change their modes of operation, for instance following these pressure by lobby groups the Coca Cola Amatil, Australia coke distributors have introduced fruit juice and mineral water in its list of brands. A fortnight ago the Coca Cola Amatil announced its collaboration with SPC Ardmona which is known for making vegetable products and canned fruits. The Coca cola Company in Australia announced to its shareholders that that in future the company will focus on producing healthier food brands. In response to the falling profits that fast food chains have experienced over time, the McDonald’s have responded by heavily airing advertisements on a new range of fruit products and salads so a to counter the negative image of its products that have caused obesity related lawsuits (Lavelle, 2004). Hazards of imported foods Foods imported from China have been purportedly reported to have melamine in its content. Melamine is commonly used in the plastic industry and thus its presence in food is disturbing. Traces of melamine in food content come as a result of leaching food contact materials. In China melamine is used in the manufacture of its dairy products so as to be make the protein content to be higher than it really is. Some studies show that melamine is melamine could be linked to kidney diseases that are commonly found in Chinese infants and a major of cause of infant deaths. Over time, the Australian food safety agencies have embarked on investigations geared towards finding appropriate mechanisms of dealing with melamine contamination in dairy products produced in China, Australia and other areas. The Food Standards Australia New Zealand (FSANZ) in conjunction with other food agencies have implemented precautionary testing of product for imported products and products produced in Australia. Moreover, these agencies have been continuously involved in monitoring imports particularly Chinese dairy products which are suspected to have melamine. Consequently, products such as Cadbury Éclair, Kirin Milk tea and the Mengiu Monmilk among many others have been withdrawn from the Australian market (Bryskine, 2008). Following these reports, consumer’s perceptions on dairy products particularly those imported from China has changed. A good number of consumers in Australia avoid using dairy products imported from China due to the allegation that they contain melamine and thus the intake of such products can contribute to kidney diseases. One the other hand, a considerable number of consumers have exclusively shunned from using manufactured dairy products. This has in turn brought about a decrease in the profits made by the dairy food industry in Australia. Basically, the melamine fiasco highlighted the need for conducting more systematic evaluation and testing for pesticides and chemicals on foods that are produced locally and imported. In response to the increasing trends of hazards of food imported foods the Australian government and the World Health Organization (WHO) have introduced even more strict measures and regulations with the aim of curbing incidences of hazardous food products in the market. These regulations have affected the production process of foods products in the Australian market. In an effort to comply with the health regulations set by the government for most food industries in Australia the cost of operation has largely increased. Most of the costs are incurred due to the process of testing hazardous content (Food Industry Council of Australia, 1989). A key example of a food industry in Australia that have been affected by these regulations is the dairy industry. In response to the set measures, the dairy industry has sought to comply with these measures by meeting the set health standards of manufacturing dairy products and providing information to the consumers on the content and procedures used in the manufacturing process. Evidently, the hazards of imported foods such as the melamine affair in milk products from China have affected the cost of operation of the dairy food industry in Australia. Conclusion Over the years the operation food industry in Australia has succumbed to various external environmental influences that have somewhat affected its capacity to supply and sell its produces to consumers in Australia and around the globe. Among the influences that this report has examined the labelling requirements of nutritional information, obesity and bans on TV advertising and hazards of imported foods. Labelling requirements of nutritional information develop a leveled playing field in fast food chains, coffee chains, bakery chains and ice cream chains. These requirements enable consumers to consider and make informed decision on the nutritional content of the food product that they are going to purchase. Evidently, labelling requirements of nutritional information influence the daily choices of consumers in regards to the food products that they purchase. In response to the labelling requirements fast food chains such as the McDonalds have availed nutritional information in all its chains and restaurants (NSW Government, 2010). Research studies have linked obesity among children to food advertising on television. Subsequent to this disclosure, consumers in Australia have changed their buying patterns as most consumers have since reduced their purchase of advertised junk foods and increased their purchase on healthier food supplies. In response to the falling profits that fast food chains have experienced over time, the McDonald’s have responded by heavily airing advertisements on a new range of fruit products and salads so a to counter the negative image of its products that have caused obesity related lawsuits. In addition, the hazards of imported foods such as the melamine affair in milk products from China have affected the cost of operation of the dairy food industry in Australia (Food Industry Council of Australia, 1989). References Bolton, R. (1983). Modeling the impact of television food advertising on children’s Diets. Curr Issues Res Advertising 1983; 6:173–99. Bryskine, S. (2008). Australia’s Import Regulation Risky. Retrieved on November 14, 2010 Food Industry Council of Australia. (1989). The Australian food industry: policy priorities. Sydney: Food Industry Council of Australia. IOM (2005). “Food marketing to children and youth: threat or opportunity”? Washington, DC: The National Academies Press. Lavelle, P. (2004). Ban junk food ads from kids’ TV? Retrieved on November 14, 2010 Hastings, G. & McDermott L, et al. (2003). Review of research on the effects of food promotion to children. Glasgow: University of Strathclyde. McKean, C. (1999).”Australian food: the complete reference to the Australian food industry”. Sydney: Agrifood Media. NSW Government. (2010). Fast food labelling in NSW- An Australian first. Retrieved on November 14, 2010 < http://www.nsw.gov.au/news/fast-food-labelling-nsw-australian- first> Rashad, I. & Grossman, M. (2008). Fast-food restaurant advertising on television and its influence on childhood obesity. J Law Econ 2008; 51:599–618. Veerman, L. et al (2009). “By how much would limiting TV food advertising reduce childhood obesity?” European Journal of Public Health. Vol 19, No 4, 365-369. Read More