Study finds no negative economic impact from Chilean food labeling and advertising law

Barry Popkin Photo
Barry Popkin, PhD

New research from the Global Food Research Program at UNC-Chapel Hill finds that the food and beverage sector in Chile did not face significant job losses or wage decreases 18 months after implementation of its food labeling and advertising law.

These findings counter common food and beverage industry claims that healthy food policies, such as front of package warning labels, will harm the economy and negatively impact employment.

Barry Popkin, PhD, W. R. Kenan Jr. Distinguished Professor in the Department of Nutrition at the UNC Gillings School of Global Public Health, is a coauthor of “The effects of the Chilean food policy package on aggregate employment and real wages,” published January 19, 2021 in Food Policy.

This study – in partnership with researchers from Universidad Adolfo Ibáñez, Instituto Nacional de Salud Pública, and the Central Bank of Chile – is the first to demonstrate the economic impact of Chile’s Law of Food Labeling and Advertising. The landmark law was implemented in June of 2016.

“Policies such as front of package warning labels and marketing restrictions help consumers make healthier decisions, but they face significant opposition from the food and beverage industry,” says Popkin. “This study shows that governments should not be intimidated by the industry’s false arguments about massive employment losses. These policies won’t harm the economy, they will make our country healthier.”

The study used detailed Internal Revenue Service (known as SII), data to analyze monthly company wages and employment before and after the implementation of the law. Despite major changes to the purchases of beverages as a result of the law, there were no significant changes to employment or average wages in the food and beverage sector compared to other sectors not impacted by the law, such as the metallic manufacturing sector and hotels and restaurants sector. This was true for the companies most impacted by the front-of-the package octagonal warning labels.

Popkin says policymakers should take note of the important findings of this study.

“For years, the food and beverage industry has fought against policies that could help address the rising rates of obesity and diet-related diseases our country is facing, claiming they would harm employment. This study provides evidence that these claims are false.”

The 2016 Chile Food Advertising and Labeling Law is a package of evidence-based food policies, including front of package labels on unhealthy food, regulations on child-targeted marketing of foods and beverages, and a ban on the sale of unhealthy foods and beverages in schools. Previous studies have found the Chilean law has reduced purchases of sugar-sweetened beverages and other ultra-processed foods. This study adds to the growing evidence that the comprehensive Chilean law is effective at creating a healthier food environment and reducing consumption of unhealthy foods, which can ultimately lower the prevalence of diet-related diseases, all without negatively impacting the economy.

The Global Food Research Program at UNC is a project of the Carolina Population Center and collaborates with partners across the globe to carefully evaluate food and nutrition policies and help to develop in-depth, longitudinal research on large-scale obesity prevention efforts.