In response to growing concerns regarding childrens' vulnerability to advertising, and the potential adverse impacts of advertising foods and beverages to children that are high in sugar, sodium or fats, both regulators and industry have taken steps to place parameters around these practices. Two recent developments aimed at mitigating these risks are of particular note, with significant implications for brands, retailers and advertisers alike:
First, starting on June 28th, Ad Standards, the advertising industry's self-regulatory body, will begin to administer the Code for the Responsible Advertising of Food and Beverage Products to Children (the "Ad Standards Code"). The Ad Standards Code, together with its companion document, the Guide for the Responsible Advertising of Good and Beverage Products to Children (the "Guide"), establish a national industry standard for the advertisement of food and beverage products to children. It generally provides that only food and beverage products which meet specified nutritional criteria may be advertised in a manner that is primarily directed to children under the age of 13.
Second, on April 25th, Health Canada published a policy update (the "Health Canada Policy") announcing its proposal to amend the Food and Drug Regulations to restrict advertising to children under the age of 13 for foods that contribute to excess intakes of sodium, sugars and saturated fat. This follows the introduction of Bill C-252 into the House of Commons, which would prohibit advertising "foods and beverages that contribute to excess sugar, saturated fats or sodium in children's diets in a manner that is directed primarily at persons who are under 13 years of age".
Both developments employ a similar model: prohibiting targeted advertising to children of food products which do not satisfy prescribed nutritional criteria. However, as described below, there are distinctions in each approach that Canadian advertisers should be aware of.
- Ad Standards' Code for the Responsible Advertising of Food and Beverage Products to Children
a. Scope of the Prohibitions
The Ad Standards Code is premised on recognition of the fact that children constitute a vulnerable audience, and that advertisers must take this into account when crafting messaging about food and beverage products that will be directed at them.
To that end, the Ad Standards Code imposes a prohibition: unless the food or beverage product being advertised meets specific nutrition criteria set forth in the Ad Standards Code, the advertising may not be primarily directed to children under the age of 13.
Generally speaking, the Ad Standards Code applies to all advertising featuring a food or beverage product, in any media, which is directed to residents of Canada. However, it contains three specific exemptions:
- displays, in-store flyers, posters, menus, menu boards and other on-premises communications and material about a food or beverage product are exempt from the prohibition;
- brand advertising and sponsorship advertising that do not feature a food and/or beverage product are not subject to the prohibition; and
- advertising that features a food and/or beverage product which has non-compliant nutrition criteria, but which promotes an educational or charitable initiative or cause, is not subject to the prohibition unless such advertising puts greater emphasis on the food or beverage product featured than on such initiative or cause.
The Ad Standards Code establishes distinct thresholds for saturated fat, sodium and sugar content for both pre-packaged foods and restaurant/food service meals. There are also additional criteria for restaurants serving children's "meals", including mandatory inclusion of at least 3 specified food groups, and distinct nutritional thresholds.
b. Defining "Primarily Directed to Children"
The Ad Standards Code also provides three criteria (with no single criterion being dispositive) to assist with the determination of whether an advertisement of a non-nutritionally compliant product is "primarily directed to children" and therefore prohibited under the Ad Standards Code:
- the nature and intended purpose of the food or beverage product advertised;
- the manner of presenting the advertisement; and
- the time and place it is shown.
Greater guidance on how these factors would be implemented in practice is provided in the Guide, nearly half of which is focused on illustrative applications of the test.
c. Prohibition on Urging Children to Purchase
Food and beverage advertisements directed at children which (a) are permitted by virtue of their compliant nutritional content, or (b) which are exempt from the Ad Standards Code, do not entirely escape the Ad Standards Code's reach, however. Such advertisements remain subject to an overarching condition: they must not urge children to purchase the product being advertised. Specifically, permitted advertisements must not (i) use words that directly urge a child to purchase a food or beverage product, or (ii) use words that directly urge a child to ask another person to make inquiries about it or purchase it.
Taken together, this means that:
- Subject to the availability of an exemption, the Ad Standards Code effectively prohibits advertising certain "unhealthy" foods and beverage products to children; and
- Any food or beverage advertising directed to children must not "urge" the children to purchase the product being advertised.
The aforementioned general prohibition and the ban on imploring children to purchase are not the only restrictions imposed by the Ad Standards Code. In addition, the Ad Standards Code provides for the following ancillary restrictions:
- No packaging or exempt advertising which urges children to buy: Although packaging, labels, wrappers and containers are not considered "advertising" under the Ad Standards Code, and while brand and sponsorship advertising that do not feature a food or beverage product are exempt from the prohibition, an advertiser must not use words in collateral materials that directly urge a child to purchase a food or beverage product, or directly urge a child to ask another person to make inquiries about it or purchase it.
- No advertising in schools: regardless of the nutrition profile of the product involved, no advertising of food or beverage products is permitted in elementary or middle schools (through grade 8). Certain exceptions to this restriction apply to the advertising of bona fide educational and charitable/not-for-profit initiatives or causes so long as such advertising does not place greater emphasis on the food or beverage product featured than on the initiative or cause purportedly being advertised.
- No product placement: advertisers are prohibited from paying for or actively seeking to place their food or beverage products in any entertainment/editorial content on any medium primarily directed to children for the purpose of promoting the sale of such products.
- No prohibited product integration: advertisers are prohibited from paying for or actively seeking integration of their food or beverage products in any medium primarily directed to children, including in interactive games or other digital content, unless such products satisfy the child advertising nutrition criteria in the Ad Standards Code.
d. Enforcement of the Ad Standards Code
When the Ad Standards Code comes into effect this June, administration will be both proactive, through a preclearance regime, as well as responsive, through a complaint-driven enforcement regime. Under the preclearance regime, Ad Standards will determine whether proposed advertising is primarily directed to children and, if so, whether it is in compliance with the Ad Standards Code. If an advertisement has not been precleared, it may be subject to the Ad Standards Code's responsive and complaint-driven enforcement regime. If Ad Standards finds that an advertisement is non-compliant, the advertiser will be required to withdraw or appropriately amend the advertisement. Additionally, non-compliant advertising may be identified in a compliance report issued by Ad Standards.
- The Health Canada Policy
The Health Canada Policy similarly recognizes that children are particularly vulnerable to the influence of advertising and that food advertising may have a negative impact on children's health.
In response to these concerns, and while Bill C-252 works through Parliament, Health Canada is proposing what it refers to as a targeted approach to introducing restrictions on food advertising to children. The initial focus of these restrictions will be on advertising via television and digital media (e.g., websites, social media, mobile apps, streaming services, online games).The Health Canada Policy does indicate, however, that it will continue to monitor food advertising in other media and settings to inform any future restrictions.
a. Scope of the Prohibitions
Under the framework described in the Health Canada Policy, television and digital media advertisements for certain foods which are "primarily directed at children" under the age of 13 would be prohibited. The foods subject to the restriction would be those with added sodium, free sugars, or added fat that exceed the 'low in' nutrient content claim thresholds for sodium, sugars and/or saturated fat. The Food and Drug Regulations would be amended so as to identify these categories. Importantly, these thresholds generally align with the thresholds for pre-packaged foods in the Ad Standards Code. However, unlike the Ad Standards Code, there are no distinct thresholds for restaurant and food service meals in the Health Canada Policy.
Notably, like the Ad Standards Code, advertisements that only include food brand elements but do not show any food that can be identified or reference the unique name of a food would not be captured by the restrictions.
b. Defining "Primarily Directed at Children"
As with the Ad Standards Code, whether an advertisement is directed at a child audience is a subjective matter of interpretation. In order to determine whether an advertisement is "primarily directed at children", Health Canada proposes to consider two factors which are similar, but not identical, to those which will be considered under the Ad Standards Code:
- The nature and intended purpose of the medium where the ad is communicated; and
- Whether the advertisement targets, or is reasonably expected to appeal particularly to, children.
While the analysis is to be contextual, the Health Canada Policy indicates that it is likely that an advertisement would be considered primarily directed at children if it is communicated in: (i) media specifically intended for children, or (ii) media intended for a general audience where the impugned advertisement targets, or is reasonably expected to appeal particularly to, children. The more design elements, characteristics and advertising techniques in an advertisement which could be said to appeal to a child audience, the more likely the advertisement targets, or is reasonably expected to appeal particularly to, children.
Noting, however, that an advertisement could be directed at adults or a general audience despite featuring characteristics, design elements and/or advertising techniques that may appeal to children, Health Canada states that it will be careful to assess the "overall context" of an advertisement by considering:
- Who is present in the ad and what are they doing? If the advertisement mostly includes children or characters in a child context (e.g., playing games, doing homework), that could indicate that the advertisement is primarily directed at children.
- What is the setting of the ad? If the advertisement is set in a school or a children's soccer game, that could be an indication that the advertisement is primarily directed at children.
The detailed description of the proposed analytical framework foreshadows the potential complexity of applying both the Ad Standards Code and the instrument which eventually results from the Health Canada Policy to advertisements. The nature of this interpretive framework could be a particularly active area of discussion in future public consultations and engagements with industry stakeholders on the proposed restrictions.
c. Enforcement via the Food and Drug Regulations
Unlike the Ad Standards Code, Health Canada's proposal to amend Food and Drug Regulations would carry the force of law once effected. The Canadian Food Inspection Agency ("CFIA") is responsible for the enforcement of food-related provisions of the Food and Drugs Act and, according to Health Canada, would be equally responsible for enforcement of these proposed restrictions. Health Canada has indicated that a "compliance and enforcement" approach would be employed which could include a variety of tools to promote compliance and identify and address non-compliance, such as a complaint mechanism, monitoring, and penalties including compliance letters, which could be escalated to prosecution and fines.
Next Steps for Advertisers
The Ad Standards Code is scheduled to come into effect on June 28, 2023. In anticipation of the effective date, Ad Standards has announced it will host a two-part webinar series, to be held on May 10 and May 31. At the webinars, analysts from Ad Standards Clearance Service will, among other things, provide attendees with an overview of the Ad Standards Code, explain the nutrient content thresholds required to allow for advertising primarily directed to children, and give practical examples to provide guidance on the application of the nutritional criteria and factors used to determine if an ad is "primarily directed to children".
Any implementation of Health Canada's proposals is likely to unfold on a much longer timeline. The department has announced that the policy update will form the basis for draft regulations that will be published in or around winter 2024 for public consultation. Any actual amendments would come after the conclusion of that consultation period. Advertisers should carefully monitor developments in this space and consider if, and how, they wish to engage with Health Canada on the nature and scope of these proposals over the course of the next year.
McCarthy Tétrault LLP's product regulatory team is here to help your business navigate this rapidly evolving regulatory area, ensure that your advertising practices are compliant with all applicable laws, regulations, and industry requirements, and advise on engagement with regulators.
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