The research by Oxford Economics was undertaken with some of the UK’s largest food and drink manufacturers and represents around 15,000 products in the scope of the Nutrient Profiling Model (NPM) regulations, which give food and drink a health score to decide whether products are subject to advertising and promotion restrictions.

Findings from the research showed that implementation costs of the Department of Health and Social Care (DHSC) proposals could be up to 50 times higher for manufacturers than Government estimates, at £2,812 per product, compared to the £53 Government figure.

According to FDF, this gap reflects an underestimate the complex changes across company product ranges, alongside additional costs such as updating IT systems to reflect the requirements of the revised NPM. It said that the food manufacturers surveyed will also lose £10 million, on average, in “sunk investment costs” spent developing healthier products to support existing regulations because many of these products will be reclassified as ‘less healthy’ under the Government proposals.

Businesses are unable to absorb additional costs

The Government Impact Assessment for the new proposals assumes that none of the business costs will be passed onto consumers, however, FDF has predicted that food inflation could reach 9-10% and stated that with the industry “already under significant strain” due to the war in Iran and other regulatory pressures, food and drink manufacturers have very limited ability to absorb further costs.

Kate Halliwell, chief scientific officer at The Food and Drink Federation (FDF), commented: “This analysis shows DHSC has significantly underestimated both the cost and impact of its proposals on food manufacturers, while relying on limited evidence to support its health claims.

“At a time when food businesses are already under intense cost pressure, these proposals will add further strain on the sector.”

Halliwell continued: “By contrast, there are early indications that the current advertising and promotion regulations, the most recent of which came into force this year, are having an effect on what consumers are buying.

“At a time when food businesses are already under intense cost pressure, these proposals will add further strain on the sector and, perversely, risk removing from shop shelves many of the products that help consumers make healthier choices.

“We urge Government to work with industry on a more proportionate approach that protects consumer access to healthier options while promoting healthier diets.”

NPM proposals risk reducing consumer choice

The Oxford Economics research has also revealed that Government has underestimated the number of products that will be impacted by the NPM proposals, with findings suggesting that there would be a 40% increase in products that couldn’t be advertised or promoted, nearly double the Government estimate of 22%. These will include high fibre breakfast cereals and fruit yogurts as well as swaps like lower sugar cakes and lower salt crisps, which will be classified as ‘less healthy’.

FDF reported that manufacturers taking part in the research expect to delist more than one in ten of their products as a result of the proposals, which, it said, risks reducing the availability of accessible “swap options” that support healthier choices.

Uncertainty around health impacts

The report also highlights the uncertainty around the estimated health benefits in the Impact Assessment, noting that the DHSC’s estimated calorie reductions for promotion restrictions are based on sales of ‘less healthy’ products reducing by between 16%-90% and FDF stated that the use of such a wide range underlines the “significant lack of certainty” around the policy’s real-world impact on calorie consumption.

Alex Stewart, associate director of Oxford Economics, stated: “Our analysis of the Government’s impact assessment suggests costs to businesses are being significantly underestimated, while the health impacts are unclear. This reinforces the importance of post-implementation evaluation of existing policies and gathering further proof points, such as those from our analysis, to inform the final impact assessment.”

FDF added that in the last five years food manufacturers have made “significant progress” in helping consumers towards healthier diets, with its member companies cutting the sugar (19%), salt (18%) and calories (17%) they contribute to the British grocery market by nearly a fifth (Worldpanel by Numerator – GB Take Home Food & Drink – Nutrient volume contribution (percentage difference), FDF total members, 2025 vs 2021).

FDF argued that it is too soon to evaluate the effectiveness of the latest phase of advertising and promotion restrictions that came into force in January 2026 and it is calling on Government to rethink its plans to change the NPM. It has urged Government to instead bring forward mandatory reporting of healthier food sales across the whole food sector, which would require companies to publish standardised data, and said that this “novel approach” will continue to incentivise companies to develop healthier options for shoppers while also “supporting everyone’s ability to evaluate health policies effectively”.