Food, drink giants plot fightback as rules tighten

India is alarmed by rising obesity levels in youth. 

India’s idea of ‘fat tax’ on ‘junk’ food worries foreign chains

Several food and drink multinationals and trade groups met in recent weeks to discuss how to lobby more effectively against Indian proposals for higher taxes and stricter labelling rules on fatty or sugary foods, sources familiar with the talks said.

According to officials, Prime Minister Narendra Modi’s administration has begun to look closely at policy proposals under discussion since at least 2015, raising concerns over the possible impact on the $57 billion sector.

Alarmed by rising rates of obesity and diabetes, India plans to frame draft rules within a month requiring manufacturers to display the fat, sugar and salt content of products on packaging. It is also considering a nationwide “fat tax” for so-called “junk foods,” a senior government official said, although that is unlikely to be rolled out in the near-term.

Last month, executives from companies including PepsiCo , Nestle and Indian consumer firm ITC met trade groups in New Delhi to coordinate efforts and urge the Centre to resist pressure from health advocates, according to a source aware of the meeting.

The attendees, who felt their efforts to push back had been too piecemeal, talked about forming a core group to unify their message when engaging the government, the source said.

PepsiCo and Nestle in India did not comment directly on the meeting or its outcome. ITC did not respond to requests for comment.

All India Food Processors’ Association, whose members range from street vendors to global conglomerates, said two industry-wide meetings were held in the month of February.