Will Chile’s new warnings for high fat, sugar, and salt affect imported goods?
Chile’s new law “Nutritional Composition of Nutrients and Their Advertising,” official in July, is the first in the world to require label warning statements on foods high in fat, sugar, and salt, reported Brussels-based regulatory consultant European Advisory Services (EAS) Europe in a June press release.
Moreover, said EAS regulatory affairs manager Ainhoa LarraÃ±aga in the press release, the legislation also expands what must be listed on nutrition labels. This list now includes saturated fats and sugars, calories, protein, carbohydrates, and sodium content.
LarraÃ±aga noted that the next step in implementing the regulation is discussing nutrient profiles-identifying a food’s nutrient contents-which Chile’s Ministry of Health is now doing to determine which nutrient thresholds will be used to define foods high in fat, sugar, and salt.
One wonders how such a regulation will affect foods imported into Chile. Chile is said to have more bilateral or regional trade agreements than any other country, boasting 59 such agreements (although not all of them full free trade agreements) with such far-flung trade blocs as the European Union and Mercosur (which includes Argentina, Brazil, and Venezuela) and such countries as China, India, South Korea, and Mexico.
Chile deepened its long-standing commitment to trade liberalization with the signing of a free trade agreement with the United States in June 2003, which took effect in January 2004. Products from the United States currently make up about 21% of the goods imported into Chile.
U.S. access to this market is competitive with Canada and the EU, both of which already had existing free trade agreements with Chile. In 2008, U.S. farmers gained duty-free access to the Chilean market for such important U.S. goods as pork products, beef products, soybeans and soybean meal, durum wheat, feed grains, potatoes, and processed food (e.g., French fries, pasta, distilled spirits, and breakfast cereals).
According to trade group Food Export USA (Philadelphia), “Based on size, market growth rate, and the U.S. competitive position in the market, the following products have the greatest potential in Chile: ingredients for…processed foods/bakery industries (e.g., dairy, soy, meat, and poultry by-products, etc.)…as well as…snack foods/high-value processed foods.”
That said, due to a slowing economy in Chile in 2009, U.S. exports to Chile of “consumer-oriented food products dropped to $84.1 million, which represented an almost 19% decrease from 2008,” said the group.
Still, according to Food Export USA, retail sales in Chile’s overall packaged food market were estimated to rise to $7.7 billion in 2009. “Historically, high-growth categories included snack bars, meal replacement products, noodles…snack foods, confectionery, and chilled processed foods,” it said.
By the year 2014, retail sales in the packaged food market in Chile are expected to climb to $8.3 billion, which would bespeak a growth rate of nearly 8%, or $601.6 million. Forecasted high-growth products include pasta, ice cream, oils, and fats.
Foods high in fat, sugar, or salt will certainly be affected by the law. Palm and coconut oils, for example, are both naturally very high in saturated fat. According to EAS Europe, “[The regulation] will apply to foods which exceed the limits to be set by the Ministry of Health for saturated fat, trans fat, sugars, and sodium.”
But one can also foresee potential problems with this approach. “When Denmark imposed its Fat Tax [in 2011], it only resulted in the Danes traveling across the border for their fatty treats,” exclaims Kantha Shelke, PhD, of Chicago-based nutrition think tank Corvus Blue.
And, “While [such a regulation] may seem to be a good way to protect consumers from foods that could be harmful to their health, you can’t simply lump all saturated fats, sugars, and other nutritional components together as a class and legislate them,” says Jim Roza, director of product development for Edison, NJ–based manufacturer Reliance Private Label Supplements.
Also, fat, sugar, and salt content alone may not provide the full picture of a food’s nutrition profile. Roza states, “It is true that coconut oil is rich in saturated fat, but one of its primary components is lauric acid, which has been shown to be beneficial for the immune system. Similarly, sugars such as fructooligosaccharides are important as a prebiotic but could be derided as a sugar because of their molecular structure.”
And, while EAS Europe pointed out that the new law applies to foods and beverages, not food supplements, how clear are the boundaries between those products? As Roza says, “The distinction between foods, beverages, and supplements is narrowing at a quick pace.”
Finally, although it is difficult to imagine a dietary supplement high in salt, many food supplements in the sports nutrition and energy enhancement areas are intentionally very high in protein or carbs. It could be problematic if these categories of products were somehow affected by the new law.
Of course, which levels of fats, calories, or salt are to be considered high have not yet been decided to a nicety.
“Standards for levels of fat and salt cannot be imposed with a flat paint brush,” observes Shelke. “Food is a complex combination of various nutrients and ingredients, and the level of fat and or salt in any given food depends on the reason for the addition and the ultimate purpose of the food. For example, salt is added to fish like cod and to olives to preserve and flavor them, but the recipes that use these ingredients typically make the necessary compensation for the added salt so that the final food product is not exceptionally high in salt.”
And who should oversee setting these standards? “Who will be the arbiter of these fine points?” asks Roza. “The scientific community or legislators? History has shown that when legislators set standards, scientific common sense can easily be pushed aside.”
In an effort to predict some of the “How high is high” numbers, Ary Bucione, DuPont’s regional regulatory officer in Cotia, Brazil, told Nutritional Outlook that it’s likely that anything with more than the following will be considered high: 200 kilo-cal/serving, 300 mg sodium/serving, 18 g sugar/serving (including naturally occurring sugars) and 8 g/serving of added sugar, 3 g saturated fat/serving, and 0.3 g trans fat/serving.
Think about what numbers like these could mean. By this rationale, one cup of sweet potatoes (at 216 cal) would be considered high calorie! So would the following: one cup of pinto beans (228 cal), one cup of canned kidney beans (230 cal), and one whole avocado (380 cal)!
Another thing to consider is how marketers may adjust their products to fit the new law-and how those adjustments could affect acceptance of the products themselves. “Prepared foods such as breads and crackers, for example, are made with a lot more salt to compensate for the mediocre functionality resulting from low protein flours and shortcuts in processing,” says Shelke. “The reduction in sodium content of breads will likely force the bread makers to use higher-protein ingredients.”
She continues, “Taste is the number one factor influencing choice in food shopping. If the low-sodium and low-fat foods don’t taste good, shoppers will turn to other venues for their foods.”
While Chile is the first country adopting this type of regulation, it’s likely that it won’t be the last. “Although worldwide, some countries such as Singapore, South Korea, Thailand, or countries of the European Union are applying new rules on nutrition labeling-be they voluntary or mandatory-Chile will be the first in the region and the world to make warning statements on food labels mandatory,” said LarraÃ±aga in EAS’s press release. “Already in Peru, a draft law, which will make warning statements on HFSS [high fat, sugar, salt] foods mandatory, is being discussed. So it will be interesting therefore to see the impact of this law in Chile when implemented and across the Latin American region.”
As for the impact on U.S. manufacturers of foods and beverages, DuPont’s Bucione notes: “Importers will have to meet the new regulation, either labeling in the country of origin or doing it themselves in country before making the foods available for consumers. Repacking might be avoided by supplementary labeling on the original packaging when physically possible.”
At the end of the day, will Chile’s new law hurt food and beverage manufacturers and scare away consumers?
“That remains to be seen,” Jim Roza concludes. “If we use the United States as an example, although certain foods are being ‘stigmatized’ as a result of their caloric content by new local labeling requirements that mandate calorie disclosure, we haven’t seen a drastic reduction in their consumption.”
Andrew Weil, MD, had a similar viewpoint in an interview with Nutritional Outlook: “All I can tell you about impact on consumers and the market is that new regulations in the United States requiring restaurant chains to post calorie counts and nutritional information on foods, including fast foods, have not changed sales or reduced consumption of foods and beverages that are highest in fat, sugar, and sodium.”
DuPont’s Bucione agrees with Weil, noting, “Consumers are free to choose what they want to buy.”
The bottom line is that if consumers want to buy such products, they will-whether it be in Chile or elsewhere. “This is not the first time that regulators have tried to reduce fat and salt in prepared foods in the retail channels,” observes Shelke. “Such efforts have never really amounted to a tangible difference because people get most of their sodium and fat at home and in restaurants.”
That said, Weil adds, the regulation’s publicity against fat, sugar, and salt could pressure food and beverage companies to decrease the presence of these ingredients in their formulas. “Publicity about negative health effects of trans fats and bans on them-in New York City, for instance-have forced manufacturers to reformulate some products.”
Attorney Jura Zibas with Wilson Elser Moskowitz Edelman & Dicker in New York City was not as sanguine.
“More labeling and more requirements hurt business. The consumer doesn’t care [about such regulations] as much as the government officials do, and businesses suffer.”