IT'S A FAT WORLD AFTER ALL; Across the globe, efforts are under way to slow the

march of obesity

ALEXANDRA JARDINE and LAUREL WENTZ

[7 March 2005; Advertising Age; Volume 76; Number 10]

Governments and influential health advocates around the world, spooked that their nations' kids will become
as fat as America's, are cracking down on the marketers they blame for the explosion in childhood obesity.

A new law will force food marketers in France, for instance, to choose between adding a health message to
commercials and paying a 1.5% tax on their ad budgets to fund healthy-eating messages. Other measures
under consideration in Europe include banning celebrities and cartoon characters from food ads aimed at
children and preventing food marketers from using cellphone jingles to reach kids. In Brazil, a government
group is examining nutritional claims in advertising to children. And the legislatures in Sweden, Finland and
Denmark are considering tightening already strict controls on marketing sugary foods to kids.

``Food and beverage advertising is the single biggest immediate challenge to the freedom to advertise
responsibly,'' said Stephan Loerke, managing director of the Brussels-based World Federation of Advertisers.
``The debate has gained additional momentum over the past few months, and we cannot predict where it
will end.''

Also under fire is TV advertising of kids' foods, as calls for curbs or bans rise around the world. ``If the [rise
in child obesity] trend continues, within five years we'll be in the same situation as America is today,'' said
Kim Fleischer Michaelsen, a senior child nutritionist at the University of Copenhagen who sits on the board of
Denmark's National Board of Nutritional Science. ``Banning TV ads that are targeting kids is an important
strategy to adopt.''

But there's an argument that those measures won't help. ``In Sweden, Norway and Quebec, where food
ads are banned from kids' TV, there's no evidence that obesity rates have fallen,'' said Lars Krogh, a
marketing analyst at K-Next AB, a media company in Stockholm.

In a glimpse at what could be the legislative landscape of the future, many are watching France to see how
new government regulation will play out, and how marketers can influence the interpretation of new rules.
Under a law passed in July 2004 that will apply only to TV and radio ads-for now-marketers in France can
either add a health message to ads for any manufactured food or beverage except water, or pay a tax
equivalent to 1.5% of their annual ad budget for a national institute to do campaigns to promote healthier
eating.

POSITIVE REINFORCEMENT

``Everyone is discussing the wording,'' said Mercedes Erra, president of Havas' BETC Euro RSCG in France
and a former president of the Association of French Advertising Agencies. Until a decade ago, child obesity
wasn't a problem in France, and now 12% of French children are overweight, prompting the debate, she
said.

Marketers in France have lobbied hard to be allowed to use positive lifestyle messages in ads-like
emphasizing the importance of physical exercise and a balanced diet-rather than grim health warnings.
France's Ministry of Health appears to be listening, and is now expected to let marketers choose among
three or four positive health messages. Industry experts say the government changed its mind out of fear
that strong warnings might backfire, causing anxiety among consumers about eating. Plus, France may hope
its new law, if not too extreme, will become a blueprint for Europe.
The WFA's Mr. Loerke said the French government is likely to make a final decision in the next two months
and submit it to the European Commission for clearance. Advertisers would have to start tagging their ads or
paying the tax by year-end in France.

Elsewhere, Ireland last month banned celebrities from food and beverage ads aimed at children and required
that confectionery and soft-drink spots broadcast in programs with half the audience under 18 carry a visual
or voice-over warning that snacking on sugary foods and drinks can damage teeth. Advertisers are asking
how long and prominent the warning should be, and soft-drink marketers are arguing about whether they
should be included at all. Unsure about the rules, some have simply halted campaigns.

CARROTS AND STICKS

Ireland is a small market, but there are fears that the new measures could have a knock-on effect, especially
because many advertisers run the same campaigns in the U.K. and Ireland.

Unlike France and Ireland, the U.K. is trying a more carrot-and-stick approach, encouraging self-regulation
with legislation as a last but threatened resort. In November 2004, the U.K. government published health
recommendations giving the food and beverage industries until early 2007 to act more responsibly or face
formal legislation. The document followed a high-profile U.K. government inquiry into child obesity last year.
Marketing and agency executives called to give evidence were grilled publicly over the use of celebrities in
ads, inciting kids' ``pester power'' and high salt and sugar content in foods.

The paper's proposals include clamping down on using cartoon characters to appeal to kids in food and
beverage ads, potentially dooming brand icons such as Kellogg's Tony the Tiger. There have also been calls
for a ban, like Ireland's, on celebrity endorsement in ``junk-food'' advertising by 2006. In a country where
the biggest grocery-store brand, PepsiCo's Walker's Crisps, relies on celebrities in its ad campaigns, that's a
big deal.

CHANGED ENVIRONMENT

The WFA's Mr. Loerke said the paper's publication got U.K. marketers moving. ``There is a recognition at
the top level of food companies that the environment has changed, both due to political sensitivities and
among consumers,'' he said. ``There is a genuine willingness to be part of the solution.''

But the solution isn't the same everywhere. PepsiCo Europe is tackling the child-obesity issue at different
speeds in individual countries, depending on each government's own approach, said Stephen Kehoe,
European head of public affairs. In Spain right now, for instance, the government is keen to negotiate a
workable solution with the food-and-beverage industry, he said.

PepsiCo's strategy includes adding products, like Walker's Potato Heads, launched recently in the U.K. as a
healthier snack for children, and encouraging exercise. In October 2004, Walker's did a pedometer giveaway
through its Web site, backed by a $5.6 million TV campaign.

``The strategy has evolved as we have taken a look at the legislative landscape,'' Mr. Kehoe said. ``We
want to demonstrate that we are taking a responsible approach and make governments aware of what we
are doing. In our view it is entirely wrong to pin all the blame on advertising to children, [and] we think we
have moved to the stage where most governments accept this.''

Food advertising tends to be less global than other product categories like cars or cellphones, so there are
few global campaigns to be sidelined with country-by-country restrictions. Even so, big multinational food
marketers like McDonald's Corp., now varying strategies by country are grappling with how, or even if, to
tackle health issues on a global scale.

2
LIFESTYLE PROMOTION

This week the company unveils the result of its global competition for ideas on lifestyle balance. Joe Talcott,
McDonald's chief creative officer-international until he quit last month, helped write the brief, originally
designed to create a single message to use around the world. But upon seeing the work developed, he said
he rethought the whole concept of a global message. ``We've struggled ourselves on how to define the
project,'' he said. The goal is to encourage consumers to ``find their own balance'' said Larry Light,
McDonald's exec VP-chief global marketing officer.

Other marketers are also piling into projects to promote healthy lifestyles for kids in Canada, where about
one-third of children aged 2-11 are overweight. Concerned Children's Advertisers, a group whose members
include Nestle Canada, Coca-Cola, General Mills, Kellogg and Kraft, has just begun running the first of three
60-second spots by WPP Group's JWT, Toronto. In ``Health Rock,'' a colorful animated figure on a T-shirt
sings about balancing food and activity.

The Nordic countries are the most militant about enacting laws to ban or restrict marketing of foods that
they consider unhealthy to children, and fighting to extend those restrictions to the rest of Europe.

The toughest laws against advertising to children have long been in Scandinavia, where the health risks of
obesity and diabetes from high sugar consumption are sometimes compared to tobacco. ``Implementing
stricter controls on advertising food and drinks will not be a quick-fix answer to all these problems,'' said
Heikki Juutinen, CEO of the Finnish Food and Drink Industries Federation.

Even so, the legislatures in Sweden, Finland and Denmark are all considering even tighter controls on
marketing sugary foods. Denmark's National Consumer Council has petitioned the government to ban
marketing ''unhealthy food products'' to anyone under 16, and Finland's legislature is hearing from health
groups that want a total ban on TV ads for sugar-laden food.

A world away in the Asia/Pacific region, few countries except Australia have made food marketing and
childhood obesity an issue yet. In much of Asia, a Western fast-food meal or a cola are still occasional treats
rather than daily overindulgences. As child obesity begins to register as a concern in China, though,
McDonald's has started promoting healthier items such as high-calcium fruit yogurt and chocolate pudding
and low-fat milk on in-store marketing materials like tray liners.

Marketers are also keeping an eye on Brazil. A Sao Paulo university recently analyzed children's
programming and found that one out of every 10 minutes of advertising was a food commercial. That study
is a starting point for the group appointed within a government health organization's ad unit to examine
nutritional claims in advertising to children.

Marketers take the blame for wide, wide world * Who's overweight: Canada 33% of children age 2-11 *
Who's overweight: Finland 29% of boys 12-18; 12% of girls * Who's overweight: Brazil 35% of children 7-12
* Who's overweight: Australia 25% of all children * Who's overweight: France: 12% of all children.