Date published: 
25 June 2018
Media type: 
Transcript
Audience: 
General public

GEOFF PARKER:

Ladies and gentlemen, good morning. My name is Geoff Parker, I’m the chief executive officer with the Australian Beverages Council. We’re the industry peak body that represents the $7 billion non-alcoholic beverage industry in Australia.

I’d like to commence by extending a warm thanks to the Minister of Health, who will say a couple of words in a minute and (inaudible) for the Government’s kind support of our announcement today.

Australia’s beverage industry supports healthy lifestyles and balanced diets. And today marks an important milestone in our industry’s history. Our landmark announcement today is centred on helping to improve the health and wellbeing of our nation. It recognises a reduction in industry’s use of sugar by 20 per cent by 2025.

This will be done in the form of a pledge that our industry members have today signed up to. It’s a firm commitment that they and us will be accountable for. As an industry, we know that we have a responsibility to encourage healthy lifestyles and to provide a choice for people to achieve that balance. This commitment is the first example in Australia where a whole industry has self-regulated its use of sugar in this manner.

And there is strong evidence that reformulation and self-regulation are effective strategies to tackle complex problems like obesity. The beverage sector has a role to play in helping Australians to reduce their sugar consumption. And we encourage other parts of the food supply and other categories to take similar action to tackle this important issue.

Measurement is an important element of this historic initiative and I’d like to provide some further context of our reduction of sugar, 20 per cent by 2025. The Australian Beverages Council has secured support of well over 80 per cent of the non-alcoholic beverage industry's volume for this pledge.

This support includes major companies such as Coca-Cola South Pacific, Coca-Cola Amatil, PepsiCo, Asahi Beverages and Frucor Suntory. We expect more of our members will join in the coming months.

Today is stage one of our pledge. The strength of this commitment is in the collective to achieve the targets. We are confident that we will reach a 20 per cent reduction by 2025 but it will take a lot of effort from signatory companies. This is a pledge that will require the industry and its partners to work together.

Our industry pledge will be independently evaluated by an auditor to be appraised and selected in the coming months. The independent audit will be undertaken in two components. A 10 per cent reduction in sugar by 2020 and a further 10 per cent reduction by 2025. The cumulative reduction will be 20 per cent by 2025. We will make the results of these audits publicly available.

Removing sugar from products while continuing to meet demands of discerning customers is a challenging process. The Government, the community and key stakeholders we engage with regularly expect us to respond by taking bold and progressive action. Today, as an industry we step up. So through this historic pledge we are responding to what customers expect and want us to do. We’ve listened to the current concerns about the amount of sugar in the food supply and we are determined to reduce sugar without having a negative impact on taste. Today's announcement expands choice for every Australian every day.

Further, as an industry, this pledge and the framework around it ensures that this commitment will be rolled out in a responsible and sustainable manner to guarantee that the jobs along the supply chain - including farmers, millers, transport, distribution and retailing jobs - are maintained. We support 46,000 full-time jobs in this country and we want that number not only protected but encouraged to grow.

The pledge to reduce sugar by 2025 is not the sum total of all that industry is doing to address the challenges of obesity in Australia but it is a very clear indication of our commitment to tackling the challenge head on. I believe that our combined effort will play a leading role in improving the health and wellbeing of our nation. Today as an industry we step up. As chief executive of the non-alcoholic beverage peak body, I say that the industry is ready to embrace this target and is excited by the challenge.

Before I hand over to the minister, I'd like to acknowledge the commitment of this government and the commitment that it has already demonstrated to improve the health and wellbeing of Australia. As an industry, we look forward to working with the Government on fulfilling our pledge. I’d now like to hand over to the minister to say a few words.

GREG HUNT:

And look, thanks very much to Geoff and the Australian Beverages Council on what is a truly historic commitment. I say historic because it's about improving the health of Australians from so many different walks of life over so many different years. What this is about is saying that as a country we can help tackle the obesity epidemic through the practice of industry, through participation and with the support of government.

All credit to the beverage sector, the non-alcoholic beverage sector, it's been an industry-led and driven process, one which we've been delighted and privileged to support. We know that the challenge of obesity in Australia is real and significant. Today we have seen some positive evidence where 200,000 Australians have moved from the overweight to the healthy weight category. That’s an extremely important step.

But only last week we saw through the Australian Institute of Health and Welfare Study that we still have slightly less than two-thirds of Australians who have a weight which is deemed to be above the healthy weight range. So there’s so much more that needs to be done.

And on that front, what we are now seeking to do is to work with industry cooperatively for Australia in an Australian way that's about encouraging better habits, providing better products but not driving up the cost of groceries as some want to do. Cost of living is fundamentally important to Australian families so we won't be driving up the cost of groceries. What we do want to do, though, is to improve the health and to improve the outcomes from magnificent Australian-produced products.

There are really three things that we're doing in conjunction with industry and the Beverage Council to improve the quality of our food and our beverages and the outcome. One, we have the Healthy Food Partnership and this initiative follows from the Healthy Food Partnership which is about ensuring that the content of food and beverages is improved over time progressively and in a way which is acceptable to consumers.

Secondly, we have the Health Star Rating. So, as whether it’s mums or dads, kids at school or at university or older Australians can make informed choices. And thirdly at this budget we contribute $230 million to support sports participation, in particular by young people but also by older Australians and preventive health activities.

So improving the ability of people to take control of their own physical lives and particularly those who aren’t active to be active at an appropriate level for themselves. And we also contributed $125 million to a chronic disease fund which will deal with many of the issues relating to obesity, cardiovascular illness and diabetes.

And then finally that brings me to this particular program. And I want to acknowledge that the Beverage Council has worked with the canegrowers, with the Farmer’s Federation, with the farming community to ensure that along with our export markets we still see a growing market and growing jobs for and through their products, but we see better health outcomes for Australians. The 20 per cent by 2025 pledge will improve lives, improve health and improve the quality of outcomes for Australians of all ages. Happy to take any questions between us.

JOURNALIST:

Is this about warding off a sugar tax?

GREG HUNT:

Not from our perspective. That’s not something we’ve supported. I know that there are others who take that approach, whether it’s in other countries or who advocate for it here, but we don’t want to see the price of groceries go up. We want to see the cost of living continue to have downwards pressure on it. But frankly, if you can work with the industry and get an outcome such as this, you get exactly the outcome we all want – healthier products, healthier children and healthier adults.

JOURNALIST:

Can I put that question to Geoff as well? Isn’t that what you’re trying to do here, is make sure you ward off any kind of legislative (inaudible)?

GEOFF PARKER:

No, not at all. This has nothing to do with a sugar tax. Both major political parties have rejected the tax. There is no discernible evidence from anywhere in the world that such a tax has any impact on public health. It continues to be a minority Greens policy. This has nothing to do with it.

JOURNLAIST:

So what’s prompted this announcement then? Why now?

GEOFF PARKER:

So what this announcement does is crystallises what the industry has been doing for about two decades, but what this pledge around 20 per cent reduction by 2025 really achieves is about speed and about scale, and it’s about ramping up that reformulation program of work, that renovation of the product portfolio, the industry’s portfolio, to make about some real change.

And certainly there's a growing body of evidence that would suggest that reformulation and self-regulation have far greater impacts than when government steps in. Consumers and households don't want governments in their shopping trolley. They don't want governments in their fridge, poking around in their fridges, and they certainly don't want governments in their pantries, other than what’s already the case with the GST.

JOURNALIST:

If it’s possible to reduce it by 20 per cent without affecting- if it’s possible to do this without affecting the taste, as you claimed, why not reduce by more, why not reduce by say 50 per cent?

GEOFF PARKER:

Changing the taste, taking out sugar and taking out- well, reducing sugar or reducing kilojoules is actually really hard for companies to do and it’s quite costly. So we think that these measures are certainly a stretch, but also achievable and look we will be- and that's why we have that the two parts to that pledge, the 2020, 10 per cent by 2020, and then additional 10 per cent by 2025. This will be hard for signatory companies to commit to but we're confident of getting to 20 per cent by 2025.

JOURNALIST:

If it's hard for them to commit to, what's the guarantee that they won't be passing that cost on to the consumers then? You talk about not wanting to increase the cost of living, but if this is going to cost the companies more, they’re going to have to find that money, that extra income from somewhere.

GEOFF PARKER:

Yeah, and again I get back to that speed and scale, that this is what this pledge is really going to deliver from a dietary- diet supply. I mean, certainly companies have been reformulating and responding to consumer demands and consumer needs now for about the last 20 years. There's been a fundamental shift over that time away from regular sugar, regular kilojoule varieties in favour of low and no kilojoules options.

You just have to walk into any petrol station or convenience store or supermarket aisle to see the proliferation of options, beverage options out there, with low or no kilojoules. And as a fast-moving consumer good category, we’re quite unique in what can be sold in the supermarket, that people- and this is about choice, people can opt for something which contains sugar and kilojoules or that have something which tastes almost exactly the same that has no sugar or no kilojoules.

JOURNALIST:

So that’s what (inaudible) my next point, is that you talk about cutting the level of sugar. Is that going to be in the high-level sugar drinks, so are you going to offer more of the low sugar varieties? Is that the idea behind it? Or is it that the maximum level sugar drinks at the moment are going to fall by 20 per cent by 2025?

GEOFF PARKER:

So the commitment will be an average across the industry’s portfolio. Different companies will respond in different ways. There’s a number of different levers that member companies of the Beverages Council can take. It will be about reformulation and it will be that providing more low and no kilojoule options. It will be increasing the marketing spend for those lower kilojoule varieties. We’ve seen an influx in bottled water recently over the last few years. So it’s going to be an average across the industry’s portfolio.

JOURNALIST:

So this could just mean more production of, say, a Coke Zero type product than the full level Coca-Cola?

GEOFF PARKER:

Without mentioning specific companies’ brands or specific companies, there’s been a proliferation of low and no kilojoule varieties over the last 15 years. As mentioned, you just have to look in any fridge and you’ll see the vast array of low and no kilojoule varieties and that’s where consumers are going and that’s what really, you know, leading beverage companies that have signed up to this pledge are really great at doing and that is responding to community and consumer demands.

JOURNALIST:

But just to be clear, just to be clear, at the end of all this in 2025, drinks that currently have the highest level of sugar content in them could still exist with that exact same level of sugar content?

GEOFF PARKER:

Absolutely. So it’s about an average across the industry’s portfolio, and that’s a really important point. You know, this is about choice, this is a really good news story. This is about the industry providing more choice for consumers. People want choice and about providing more low and no kilojoule varieties is good for consumers.

JOURNALIST:

But if you have a look at most mainstream sugary drinks at the moment, they do have a high, middle and low sugar option. So really, there’s no change, is there? If all they’re doing is simply producing more of the low sugar variety, that choice is already there, isn’t it?

GEOFF PARKER:

Absolutely, there’s a lot of choice there, but we want more choice and this pledge is about providing more choice. It’s a good thing for consumers.

GREG HUNT:

I might just add something in. In my discussions with some of the large companies, and Geoff mentioned four of them, what they’ve indicated is that it's not just producing more of one particular type but they’re looking at what’s called reformulation. Now reformulation around the world is where, in different food or beverage groups, companies looking at lower fat, lower sugar, lower calorie changes to the existing products, as well as the new product.

So it’s a progressive change that acknowledges the importance to consumers of the products to which they have an existing commitment, and it allows for changes in the way that they are delivered. And so all up, what we see as a government is that there will be less sugar consumed by children and adults in the coming years.

JOURNALIST:

Are you wanting to see that further though? Say beyond 2025, would you want to see a 50 per cent reduction from where we are now?

GREG HUNT:

Look, my presumption is that this is a trend that is and should continue over the course of the coming decades.

JOURNALIST:

Would you be putting direct pressure on those companies to continue to reduce those amounts?

GREG HUNT:

We’ll talk in 2025. But I would say when I came in, I said that our approach as a government is not to drive up the price of groceries, but to work constructively to drive down the level of kilojoules and calories in particular products. On a collaborative basis, the industry responded with this initiative and it’s pretty significant. It’s, in my knowledge, the most significant change in food or beverage formulation in Australia and what that means is healthier kids and healthier adults. A lot more to be done but a huge step.

JOURNALIST:

So just to clarify then, sorry, you said you want there to be more choices. What are those choices then? Because you were just saying, the lower sugar options are on the table at the moment and if people are taking those up at the moment if they’re voting with their feet, it seems like you’re just responding to what the market is already telling you, rather than actually doing anything different.

GEOFF PARKER:

No there’s certainly a lot of effort that signatory companies - so there’ll be a number of things. So it’ll be about providing more low and no kilojoule varieties, more different brands, different brand varieties, new recipes. It could be around smaller pack sizes, it could be about reformulating existing products. The signatory companies will be best placed to be able to determine how they’re going to help us achieve this target. I know the minister has another firm commitment. So one more question.

JOURNALIST:

Minister if I could just ask one final one, sorry, have the companies, and to Geoff as well, have the companies given assurances that they won’t be increasing the cost to consumers in relation to this specific target?

GREG HUNT:

The advice that we’ve had is that this will be, for consumers, cost-neutral and that for jobs it will maintain existing jobs and that as they build their markets globally that we continue to build the Australian beverage sector’s job creation. So that’s why it makes me doubly happy.

Ministers: