The Fu­ture of Brands

How much of an ef­fect does pack­ag­ing have on your brand? Hadi Sleiman, cor­po­rate af­fairs and com­mu­ni­ca­tions di­rec­tor, Mid­dle East, Ja­pan To­bacco In­ter­na­tional (JTI), ex­plains what the fu­ture holds for brand own­ers and calls for an open di­a­logue with the a

CateringNews Middle East - - Opinion -

Food and drink com­pa­nies across the globe are un­der in­creas­ing pres­sure of ex­ces­sive reg­u­la­tion and risk be­ing ex­cluded from dis­cus­sions on their in­dus­try’s fu­ture. As to­bacco style reg­u­la­tion is now be­ing ac­tively ap­plied to these cat­e­gories, brand own­ers should be wor­ried about this domino ef­fect.

One such ex­am­ple is plain pack­ag­ing, which in ef­fect is a ban on brand­ing or brand cen­sor­ship. By im­pos­ing these strict rules and reg­u­la­tions, the leg­is­la­tor re­quires man­u­fac­tur­ers to re­move all branded fea­tures from ex­ter­nal pack­ag­ing, ex­cept for the brand name writ­ten in a stan­dard font on a sur­face in a stan­dard colour.

An in­creas­ing num­ber of coun­tries are con­sid­er­ing and al­ready in­tro­duc­ing re­stric­tions on the mar­ket­ing and ad­ver­tis­ing of food and drink prod­ucts in an at­tempt to pre­vent obe­sity and life­style dis­eases. With calls for more in­tru­sive mea­sures, the prospect of fur­ther ap­pli­ca­tion of plain pack­ag­ing looks in­creas­ingly likely de­spite the lack of ev­i­dence on its ef­fec­tive­ness.

Fast mov­ing con­sumer goods (FMCG) cat­e­gories in­clud­ing con­fec­tionery, savoury snacks and drinks may lose bil- lions of dol­lars if the plain pack­ag­ing leg­is­la­tion is ap­plied to them, ac­cord­ing to a study from Brand Fi­nance, a Uk­based in­de­pen­dent brand busi­ness val­u­a­tion and strat­egy con­sul­tancy.

The Brand Fi­nance Plain Pack­ag­ing 2017 study fol­lows calls in coun­tries like Aus­tralia and the United King­dom to ex­tend the plain to­bacco pack­ag­ing leg­is­la­tion to food and bev­er­age, con­fec­tionery and savoury snack cat­e­gories.

Brand Fi­nance pre­dicts that eight ma­jor brand-own­ing com­pa­nies cho­sen for the study would see $187 bil­lion of to­tal im­plied loss in value, while the im­pact across the global bev­er­age in­dus­try would be at least $293 bil­lion.

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. Ac­cord­ing to Brand Fi­nance the 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.

On the other hand, plain pack­ag­ing is a gift to il­le­gal traders who can copy pack­ag­ing with ease and not worry about the trade­marked colours, fonts or im­ages of branded packs. This would lead to an in­crease in il­le­gal trade and a sharp de­cline in tax rev­enues for the gov­ern­ment. By fos­ter­ing an un­reg­u­lated, un­taxed mar­ket­place, plain pack­ag­ing re­sults in a sig­nif­i­cant im­pact on the busi­ness cli­mate and pub­lic se­cu­rity.

Busi­nesses need to have a voice in reg­u­la­tory de­ci­sion mak­ing and gov­ern­ments should or­gan­ise mean­ing­ful con­sul­ta­tions with all rel­e­vant stake­hold­ers when con­sid­er­ing new reg­u­la­tions. Open di­a­logue be­tween busi­nesses and gov­ern­ments fos­ters an en­vi­ron­ment for reg­u­la­tions that are fit for pur­pose and this gen­er­ates busi­ness con­fi­dence in the op­er­at­ing en­vi­ron­ment there­fore fu­elling fur­ther eco­nomic growth.

The UAE has al­ways been a re­gional leader in es­tab­lish­ing a bal­anced, mod­ern reg­u­la­tory frame­work and de­vel­op­ing such a di­a­logue will be of great ben­e­fit to all stake­hold­ers and con­sumers in the GCC.

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