Mandatory plain packaging poses $187bn threat to snacks, drinks and confectionery markets
Some of the world’s biggest brands including Coca-Cola and Kraft could be facing a multi-billion dollar hit if plain packaging regulations are extended to areas such as alcohol, confectionery, snacks and fizzy drinks.
Plain packaging expansion poses $187bn threat to snacks & drinks market
According to consultancy Brand Finance as much as £187bn could be wiped off the cumulative worth of businesses operating in these sectors should mandatory plain packaging policies be enacted, with Pepsi being the biggest single casualty – losing over a quarter of its enterprise value.
In absolute terms however arch rival Coca-Cola faces the largest single blow with a potential $47bn blow in the offing. Alcoholic brands face a similar threat with AB InBev, Heineken and Pernod Ricard all at risk of a tightening regulatory screw.
David Haigh, chief executive of Brand Finance, said: "To apply plain packaging in the food and drink sector would render some of the world’s most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies.
“Predicted loss of brand contribution to companies at risk is only the tip of the iceberg. Plain packaging also means losses in the creative industries, including design and advertising services, which are heavily reliant on FMCG contracts.”
Fears are emerging that packaging could be the next front line in a war on obesity after the British Medical Council stated that labels should be added to sweets in an effort to curtail consumption.
Last year tobacco giants lost their own High Court battle over plain packaging laws.