Over US$500 Billion across food and beverage industries at risk from marketing restrictions

Following the introduction of marketing restrictions for tobacco products and repeated calls to extend the legislation to more sectors, Brand Finance once again analysed the potential impact of such policies on food and drink brands.

The latest Brand Finance Marketing Restrictions 2021 report, building on the analysis conducted in 2017 and 2019, estimates potential loss to businesses at over US$500 billion and seeks to understand popular attitudes to brands and marketing restrictions thanks to insights from an original global consumer survey. In the latest report, Brand Finance analysed the potential damage across alcohol, confectionery, savoury snacks, and sugary drinks brands which can result from the imposition of marketing restrictions across the globe.

The analysis models the impact on enterprise value from potential reduction in the added value that brands contribute to the business, known as brand contribution. The report looks at nine of the world’s biggest food and drink brand-owning companies: AB InBev, The Coca-Cola Company, Diageo, Heineken, Mondelēz International, Nestlé, PepsiCo, Pernod Ricard, and Treasury Wine Estates, as well as the industry as a whole.

The nine major brand-owning companies could lose a total of US$267 billion in enterprise value should marketing restrictions be implemented. On average, the companies in question could each lose nearly a quarter of their enterprise value and over 50 per cent of brand contribution. Looking beyond simply the nine companies analysed, and extrapolating this to the entire endangered industries globally, alcohol, confectionary, savoury snacks, and sugary drinks brands could lose a whopping US$521 billion.

“Brands are integral to how the world operates. In times of crisis, brands, especially those most valuable and strongest in their categories and markets, become a safe haven for capital,” said David Haigh, chairman and CEO of Brand Finance. “Well-managed, innovative, and reputable brands are what the global economy turns to in the hour of need. Severe marketing restrictions are catastrophic, not only for brands, but for all stakeholders, from consumers and society, to investors and governments.”

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