A German Battle over Food Labeling

Due to a growing outcry against misleading labels, the EU calls for a mandatory system, but Berlin wants to decide for itself how to do it

Germany's food industry wants to decide for itself how to present nutrition information. But with growing dissatisfaction over what many see as misleading labels, both Berlin and the EU are considering a mandatory system. Britain may be the model in this battle against the bulge.

Few in Germany's parliament expected the kind of heated debate that would be sparked when it began to discuss the issue of food labeling last month. But industry, politicians and consumer protection advocates have long been waging a bitter battle over food labeling practices. Some are concerned about their business, while others are worried about consumer health and the costs to society at large.

More than half of Germans are overweight, and 20 percent are considered obese. Almost 2 million children and adolescents are too fat. Thirty percent of the costs within the German healthcare system—more than €70 billion a year, and a number that is rising—are attributable to the consequences of food-related illnesses. The World Health Organization (WHO) calls it an epidemic.

All parties agree that better food labeling could help guide consumers through a jungle of an estimated 240,000 products available on the German market. More importantly, it could help them to differentiate between healthy and unhealthy foods, and whether what they are putting in their shopping cart is a calorie bomb or not. Most agree that if a system is put in place it must also be easy to understand, since overweight people tend to belong to social classes with lower education levels. But what should this food roadmap look like?

The Green Party, the Left Party, and now the Social Democrats (SPD), wanted to join forces with consumer groups to implement the type of color-coded system, known as the traffic light, already in use in Great Britain. The British system includes color-coded labels on products with fats, sugar and salt according to their relative amounts—red for foods that are too much of a bad thing, yellow for borderline goods and green for those that can be eaten without worry.

But the food industry lobby calls this "discrimination against products," as if brand names had human rights, and it has managed to win over Horst Seehofer, the country's minister of food, agriculture and consumer protection. The traffic light system, says Seehofer, represents a "brainwashing of the people," while the food manufacturers' proposal is more objective and less patronizing.

In fact, the traffic light system would be devastating for the dessert products industry, because most of its goods would be labeled a deep red. Instead, Seehofer is backing an industry proposal to provide individual values for nutrients and express them as a percentage of the recommended daily requirement. Calories would be listed on a product's front label while other information would be shown on the back. Of course, all of this would be voluntary.

Seehofer, together with food industry officials, presented the key elements of this so-called GDA model in October, and later injected them into the European debate.

The whole thing looked like a fait accompli for the food industry lobby. But then Gerd Müller, a state secretary in Seehofer's Consumer Protection Ministry with the conservative Christian Social Union (CSU) party, showed up at the March 6 debate in the German parliament.

In his speech, Müller said, almost as an aside, something that was considered unmentionable until then: "To your surprise, we plan to test a labeling system in which red, yellow and green play a role. We launched a survey to this effect yesterday." The table on Müller's handout had a red, yellow and green background. Politicians within Müller's CSU and its larger sister party, the Christian Democratic Union (CDU), could hardly believe their eyes. There was something unmistakably traffic-lightish about the document.

Since then, people representing all sides of the debate have been left scratching their heads over whether Seehofer, a man known for his ability to sense the general mood, has switched sides now that resistance to the industry plans has grown and politicians have realized that the food labeling controversy could become a campaign issue.

Thilo Bode, director of the German consumer protection organization Foodwatch, tirelessly criticizes the policies of the consumer affairs minister on the radio and on television, as well as in his book "Abgespeist" ("Fobbed Off"). "With his rejection of the traffic light system, Horst Seehofer has made himself the chief lobbyist for the food industry. He has failed in the one area where he could really take significant steps to combat the problem of obesity: clear and understandable product labeling."

Bode refuses to give credence to the argument that the traffic light system is too simple and paints a distorted and negative image of products that are in fact good (think of margarine and olive oil). "People are fed up with having to decipher unclear rows of figures in small print on package labels."

Foodwatch supporters have sent more than 10,000 e-mails objecting to the traffic light system to the Consumer Affairs Ministry. A new major digital offensive has also been underway since last week, and residents of Germany can now tell their elected representatives what they think by logging on to a special Web site.

A Successful Program in Britain

The biggest and most influential proponents of the traffic light system are Germany's consumer protection agencies. Experts there feel experiences in Great Britain show that consumers like and understand the labels. "There is nothing patronizing about this," says Stefan Etgeton of the Federal Association of Consumer Protection. "It is an urgently needed shopping tool."

His colleagues at the consumer protection agency in Hamburg reinforced their pro-traffic light position in a recently published and eye-opening study. It examines how the industry uses arbitrary lists of ingredients to fudge its way into making food products appear healthy. To make nutritional value figures seem as appealing as possible, portion sizes are listed on labels that have very little to do with the reality of an evening spent at home on the couch. For example, the nutritional values on a package of peanuts are given for a portion size of 25 grams—a small share of what is actually in the bag. The same applies to potato chips. The savvy consumer, if he hopes to remain within the calorie limits printed on labels, is expected to make do with a portion of four little chocolates and then close the box and put it away, or to drink only half of a half-liter bottle of Coca-Cola or eat half of a frozen pizza.

These cheap tricks harm the industry's credibility. And although 60 percent of products are already labeled voluntarily, as long as there is no uniform labeling system, the information that is currently being provided is more likely to obfuscate than reveal.

Britain's traffic light food labeling system: "There is nothing patronizing about this."

No amount of government intervention into social policy, such as the "Nutrition and Exercise Platform" promoted by the German government, can change this. As members of the initiative, Nestlé and Danone support a television program created specifically to serve its needs, "Peb & Pebber." In the program, which will be aired on the children's channel Super RTL, two hand puppets will introduce healthy nutrition to children. But the ads airing during the program do just the opposite, tempting children with Danone's Fruchtzwerge dairy dessert, the yoghurt drink Actimel and Nestlé's Cini Minis breakfast cereal.

All three products are loaded with calories. Fruchtzwerge, a product containing fromage frais, contains 14.4 grams of carbohydrates, almost all sugar, for each 100 grams. Normal fromage frais contains only 3.1 grams of carbohydrates. Actimel, a yoghurt drink, contains 10.5 grams of sugar, compared to only 4.1 grams in normal low-fat yoghurt. Nestlé's breakfast snack, Cini Minis, has almost as many calories as chocolate. Of every 100 grams, 32.8 are pure sugar.

What is this sort of advertising doing in a children's program that promotes good nutrition? "Children should learn to eat a balanced diet, and to consume everything in moderation," says Nestlé spokesman Hartmut Gahmann. Besides, he adds, children would burn more calories if they only exercised more.

A few days after the interview, the company sends out an e-mail notice stating that it has cancelled its ad campaign for Cini Minis in the "Peb & Pebber" program as of March 2008. "There are no plans to reintroduce this advertising in this program." Besides, the memo notes, the product's sugar content was reduced in the past two years by about 12 percent, to its current value of 32.8 grams per 100 grams of cereal. "We will continue this reduction process," Nestlé writes.

Part 2: Skepticism of Voluntary Labeling

Consumer protection advocates also hold a skeptical view of the industry's new food labeling model. They object to the inconsistent portion sizes and the "allowable daily value" category, which is based on the requirements of an adult woman. But children and the elderly require significantly less energy, while men and people in physically demanding occupations require more. Thus, it comes as no surprise that doctors are also speaking out in favor of the far more straightforward color-coding system.

Gerd Claussnitzer, who, as physician-in-chief of the Spessart Hospital in the central German town of Bad Orb, treats overweight children, believes that the traffic light system can be useful. "Color coding—be it through a traffic light symbol or the less judgmental food pyramid—is easier to understand, especially for children." The system would help prevent obesity, says Claussnitzer, because "many children's foods would come with a red dot."

The food industry is also running up against Germany's largest health insurance association. "Consumers need a simple and clear system that allow them to recognize whether a food product contains too much fat, sugar or salt. The traffic light solution, which has tested well in England, offers precisely these characteristics, especially because it includes both color coding and precise amounts," says Hans Jürgen Ahrens, the chairman of German's largest health insurer, AOK-Bundesverband. "If German waist sizes are to be brought down once again, it's important for consumers to be able to tell, directly on supermarket shelves, whether they are buying healthy or high-fat foods."

With his surprising about-face in favor of testing a color-coded system, Seehofer is distancing himself from his strict opposition to the idea for the first time. "We want to test how consumers perceive the GDA model if it is combined with red-green-yellow," admits Ursula Heinen of the CDU, who is a parliamentary state secretary in Seehofer's ministry. The survey was completed on March 31, but the results have not been analyzed yet, says Heinen.

But what happens if people like the color-coded system? "We will not act without taking the needs of consumers into account," says Heinen. But concessions to industry will be necessary, she adds. What those concessions could look like remains vague, however.

The industry, for its part, seems disappointed. "We would like to see more clarity. After all, Seehofer was consistently opposed to the traffic light system until now. And yet, what they're now testing is a traffic light system," says Matthias Horst, managing director of the German Federation for Food Law and Food Science (BLL), the lobbying organization for the food industry.

The industry was confident until now. Representatives of major food corporations, like Nestlé, Unilever and Kellogg's, have been meeting regularly since 2004 to develop strategies. They hired PR agencies to design campaigns against the British color-coded system and assiduously lobbied the European Commission in Brussels. Their associations maintained close contact with the German Consumer Protection Ministry—apparently with great success, or so it seemed.

At first, Seehofer accepted the BLL model at face value, promising to preserve the voluntary nature of food labeling.

The first setback for the industry came in late January, when Brussels presented its own proposal for food labeling across the European Union. Under the Brussels plan, all food packages will list calories, fat content, carbohydrates, sugar, salt and saturated fatty acids on the front label. The back label would then provide information on recommended daily allowances of individual ingredients, and what percentage of those allowances the product contains. Even the font size is regulated under the EU proposal, which stipulates that words must be at least three millimeters tall.

Markos Kyprianou, the EU health commissioner in office during development of the proposal, took it a step further than the German model, which calls for listing calories on the front label and everything else on the back. But what is far more important about the EU plan is that labeling would be mandatory. This came as a shock to the food industry, and yet it celebrated its own victory of sorts: the European plan takes the traffic light concept off the table for now.

"We want informed consumers, but we don't want to make their decisions for them," Kyprianou said, thereby delegating the decision to each individual member state. The EU plan leaves it up to each country to introduce its own version of the "traffic light." But this presents the EU with the exactly the kind of situation it was trying to avoid with its internal market: regulations that differ in each country. And for industry it is nothing short of a horrific scenario that would only lead to "more confusion instead of information for consumers," the Confederation of the Food and Drink Industries of the European Union (CIAA) argues.

Now it is time for the European Parliament and member states to reach a decision on the European Commission's proposal. This could take some time; leaders of the EU member states have only met for an initial meeting to discuss the issue, and many in the EU parliament are skeptical that an agreement can be reached before the next European elections in June 2009.

Officials in Seehofer's ministry, on the other hand, have a more positive take on the matter and expect a quick decision before the elections. Until then, the officials say, Germany will not try to go it alone.

Does this signify the demise of the traffic light system once and for all, or the last reprieve for the industry model? Gerd Müller's next appearance is keenly anticipated.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE