There was a time when high-fat, salt, and sugar (HFSS) foods were marketed relentlessly without restriction. Cartoon mascots, television commercials during children's peak viewing hours, and toy giveaways made fast food incredibly popular. Today, excess weight and obesity-related illnesses are leading global health concerns. Nearly 65% of adults in high-income countries are classified as overweight or obese. (5)
Restrictions on HFSS food advertising on television and digital media can significantly reduce fast-food consumption. Comprehensive bans covering online promotions and pre-9pm television adverts have now been proposed or implemented in several European nations.
Indirect taxes on sugary drinks are also a highly cost-effective way to reduce consumption, especially among school-aged children and low-income groups. A levy that increases the price of carbonated soft drinks by 10% typically reduces consumption by approximately 8% in urban areas. (10)
However, healthcare systems are still projected to spend billions annually by 2035 treating illnesses linked to poor diet. The market for healthier alternatives, such as organic or sugar-free ranges, is growing rapidly, but consumer habits remain difficult to shift. Large fast-food chains continue to invest heavily in brand promotions and sponsorship of major sporting events to bypass direct product restrictions, frequently challenging legislative measures. (15-20)
Question
Explain why 'restrictions on HFSS food advertising' (Extract A, line 6) may result in a decrease in the revenue of fast-food firms. Include a supply and demand diagram in your answer.
