One number stands out above many others from the second annual Tortoise Better Food Index. It’s 85.5 per cent – the share of products from ten of Britain’s most profitable food companies that are ultra-processed.
The profits and the processing are linked. Food price inflation – at 19.1 per cent last month – is the highest in Western Europe, and the industry is responding by selling large volumes of cheap, low-quality food at high margins to low-income consumers. The cost of living is working as a regressive tax on those least able to pay it. The cost in illness, healthcare, opportunity and life expectancy will be borne by everyone.
Last week the government hinted it would intervene. Reports at the weekend said a voluntary “maximum price” scheme for basic goods like bread and milk might be proposed for supermarkets. Such ideas are based on the premise that food inflation at this level is temporary, caused mainly by the war in Ukraine. That is the easiest explanation and it is compelling. But an inconvenient and messier one is the food system itself.
Eleven of the 30 companies in our Index, including Kraft Heinz, Mondelez and Birds Eye, sell their ultra-processed products more cheaply per calorie than their non-ultra-processed products. Ultra-processed foods are created to be addictive as well as calorie-dense, and our index shows that they’re the most ubiquitous as well as the most profitable in the UK’s food system: they account for two thirds of the products in a representative sample from the 30 companies.
When food prices are rising, it’s rational for consumers to turn to affordable and calorie-efficient products even if they’re ultra-processed and high in fat and sugar. For the industry that means high margins that producers and retailers are reluctant to give up.
Is it any wonder food price inflation in the UK is stubborn and those on the lowest incomes are more likely to experience obesity, cardiovascular disease and early death?
We’ve spent six months collecting data on the companies that occupy the missing middle of the food system. Some, like Unilever, Kellogg’s and Nestle, are well-known. Others function behind the scenes – like Greencore, Bakkavor and Hilton Food Group. These are the companies that make the meals millions of people eat week in, week out, sold as supermarket-branded meal deals, deli ranges and pasta sauces.
They get away with comparatively little scrutiny because, as one CEO reportedly told staff, “We’re not the f***ing NHS.”
Not that the big supermarket chains are blameless. MPs and unions have accused them of “greedflation” and profiteering from the cost-of-living crisis. In fact Tesco’s profits fell by 7 per cent in the 2021-22 financial year, but it still paid £704 million in dividends and kept its dominant market share of 27 per cent – 12 points higher than the next biggest, Sainsbury’s. The Competition and Markets Authority is poised to investigate whether a “failure in competition” among supermarkets is one of the reasons grocery bills are still growing.
Jeremy Hunt, the chancellor, is right to call on large food companies to address rising food price inflation. But he knows the government has a role too. Its last big intervention in the food system – the Soft Drinks Industry Levy – was an unequivocal success. The sugar tax instigated industry-wide reformulation and slashed the sugar content in drinks almost overnight.
Food must follow, because the worst outcome of the price squeeze would be cheaper ultra-processed food while the cost of healthy staples goes on up. But with so much to loose and little immediate gain, the producers aren’t going to move first. This is about policy, and politicians need to lead.
The Better Food Index is a ranking of the 30 largest food and drinks companies in the UK on their actions and commitments towards a fair and sustainable food system.