Food Regulator's Battle Against 'Healthy Labels' Only Half Won

These are questions that arise after the government advisory prohibiting e-commerce platforms from labeling any beverages as 'health drinks'. Unfortunately, there are no definitive answers to any of these concerns.

As India gears up to take on packaged goods makers who have been deceiving customers with false promises and putting their health at risk, experts say that without proper regulations and clear guidelines on what qualifies as a 'healthy' food, this fight may not yield the desired results.

"If they [foods and beverages marketed as healthy] are high in nutrients of concern like sugar, regulate them," says Nutrition Advocacy in Public Interest convenor Arun Gupta. "The current laws are not effective at all."

As per the FSSAI's own admission, the term ‘health drink’ was not defined in the 2006 food standards law, so no companies can claim their drinks to be 'healthy'. Brands, too, don't label their products as 'healthy' on the packaging but very little regulation and oversight aided these companies in exploiting a loophole in the system.

Malt-based beverages like Horlicks, Complan, Boost and Bournvita have been a popular choice in India for generations, capturing three-quarters of the Rs 10,000-crore market. Their universal nutrition-led marketing has been effective, allowing them to expand their sales unchecked.

People gladly drink up Horlicks' promise of 'taller, stronger, sharper'. The taglines "I'm a Complan boy or girl" and "Boost is the secret of our energy" hold a timeless significance for those who grew up enjoying milk blended with Complan or Boost during their childhood. Claims that these powdered milk drinks are superior to milk led consumers to believe they are healthy when they aren't. Interestingly, Bollywood film 'Koi Mil Gaya', where actor Hrithik Roshan's character, Rohit, gains superhuman abilities, is often credited with boosting Bournvita sales, thanks to the household brand's message of providing children with the necessary nutrients to grow.

But, Bournvita has been embroiled in controversy since April of last year.

A viral video by social influencer Revant Himatsingka, popularly known as Food Pharmer who reviews the contents of packaged food products, forced Bournvita to cut sugar in December to 32.2-gm per 46-gm from 37.4-gm earlier. This compares with Horlick’s 100-gm serving that has 78gm carbohydrates, and its 32-gm serving having 20-gm added sugar. For Complan, every 100-gm serving has 62-gm carbohydrates, and a 45.5-gm serving has 21.8-gm added sugar.

It took over 20 years for the government to revoke Bournvita's status as a 'health drink' and other brands are likely to face similar actions too.

In a different case with some similarities, the Supreme Court warned Ramdev, the co-founder of Patanjali Ayurved, to be prepared for possible consequences in a contempt case related to deceptive advertisements.

Still, this is only a halfway success, according to Gupta, who is also a former member of the Prime Minister's Council for India's Nutrition Challenges. "India needs a definition of what is unhealthy and what is healthy," he says, urging for implementation of warning labels and restricting advertising.

The country's food regulator has been sitting on its own draft notification on the front of pack labelling for two years now, pending its finalisation.

According to the draft, all packaged food and beverage items sold in the country will be required to display a health star rating on the front of the package. A higher number of stars will imply healthier choices and need to be displayed on front of the packs, according to the first such labelling norms in India. This rating system evaluates the sodium, sugar, and fat content of the product to inform consumers about its nutritional value.

The proposal is facing obstacles due to the differing opinions among food companies, consumer activists, health organisations and the regulator. While some sections are fine with star rating, others have said that direct warnings on the packaging would be a more effective approach.

"Regulation around healthy food is a very tricky subject," Pawan Agarwal, former CEO of FSSAI, told NDTV Profit. "The healthiness of a food choice is not solely determined by its nutritional value, but also by the portion size. Consuming even the healthiest foods in excess can be detrimental to your health. So, these [regulations] need to be addressed based on science."

Discussions on appropriate thresholds for declaring a food unhealthy has been ongoing for many years, Agarwal said, pointing out that the advisory that suggests no beverages can be categorised as 'health drinks' on online portals possibly marks the initial step before stricter guidelines are rolled out.

In the case of beverages, added sugars are a major concern as they are linked to various health issues, such as obesity and diabetes. Therefore, setting a threshold for the quantity of added sugars in a beverage can help consumers make more informed choices about their consumption.

A person involved in FSSAI-led stakeholder consultations on labeling said on the condition of anonymity that the draft guidelines are in the final stages of approval and would be notified within three–four months.

The star rating-based labelling system that was proposed in September 2022 is set to be the biggest labelling reform for packaged foods in India.

Front-pack labeling has been shown to lower consumption of unhealthy food worldwide. In India, however, food companies are currently required to only include basic nutrient information on the back of packaging.

NAPi's Gupta suggested that warning labels on products is the answer for informed choice if the product contains high fat, salt, and sugar as per the World Health Organization standards. "Or India could do its own standard."

India has introduced the Guidelines for Prevention of Misleading Advertisements and Endorsements (2022) to close a policy gap and protect children from junk food ads, yet there's a need to broaden the regulatory scope, showed a research report published in The Lancet in November 2023.

The medical journal stressed that health warnings on high fat, salt, and sugar foods are crucial in regions with incomplete food marketing bans, like India. France's Public Health Act, 2004, which includes similar measures, could serve as a model for India to address regulatory gaps and discourage the consumption of unhealthy foods among kids and adults.

At least three executives of different e-commerce companies that NDTV Profit spoke with say that the recent advisory issued by the Ministry of Commerce is "unclear" and "impractical" to implement across all platforms, with one of them saying that the battle is not theirs.

The responsibility of making the required changes lies with the seller of marketplace platforms like Flipkart and Amazon as they do not hold inventories. It only applies to platforms like Blinkit and BigBasket, which are inventory-led. While the marketplaces will educate its sellers to refrain from listing beverage brands under the health food category to avoid penalties, it would take at least six months to reflect on the platforms.

Swiggy Instamart is now offering health food brands in the 'kids nutrition' category, while Blinkit and Zepto retagged these products as 'milk drinks' and 'drink mixes' respectively. BigBasket still included them in the 'health drink and supplement' category as of April 15.

"We don't see a big impact," said Abneesh Roy, executive director at Nuvama Institutional Equities. People generally don't search for the health drinks, they just buy Bournvita or Horlicks because they are popular, he said. "Moreover, these companies don't label them as a healthy product, so some changes in advertising may be needed on a case-to-case basis. In any case, the volume sales have been slow for this category due to inflation."

Indian health food drinks, seeing persistent dilution in product formulation for enhancing taste, have seen sales pushback. The category has seen a marked deceleration to low-single digit growth over the last eight years.

"Health food drinks are losing relevance with product formulations of FMCG majors having become substandard over time, in the quest to expand the category by opting for 'tasty' rather than 'healthy' products," according to Nikin Gupta, a consumer sector analyst at Emkay Global.

Market leader Hindustan Unilever Ltd.'s actions —such as making the category relevant with enhanced formulation, making it affordable, an awareness drive with door-to-door sampling and extending its offerings to all age groups and covering wider cohort needs—have not been effective in driving category growth, he says.

Only 17% of the products were marked healthy after assessing the health score of the 1,901 consumer-products, according to the finding of Access to Nutrition Initiative. As per the ATNI India index 2023, ITC Ltd. derives 40% of sales from healthy products, followed by Nestle India (18%). The likes of Mondelez and HUL have single-digit healthy product contribution.

Regulatory tightening on health drinks will weaken the category's perception, putting pressure on company's growth and margins, said Gupta. HUL, the owner of Boost and Horlicks, has the highest stake in the health food drinks market, which accounts for 10% of its overall revenue.

"Any stern regulation ahead will also affect valuations," he said.