British television channels could be forced to make cuts of more than £200m to their programme budgets if the government pushes ahead with plans to impose a blanket ban on junk food advertising.
In a further blow to a crisis-hit media industry, ITV would lose about £100m of income if a 9pm, pre-watershed ban is implemented, according to television industry estimates.
Channel 4 has estimated that it would lose £40m annually – almost a tenth of its now drastically reduced annual programming budget. Such a move could boost competing subscription services such as Netflix, which do not rely on advertising.
“We know that the creative industries are already suffering as a result of Covid,” said one senior source at a commercial broadcaster, who said the government risked “kicking away the crutches” of the British television industry.
Broadcasters are waiting to see details of the government’s plans before setting out their responses, although a particular concern is that any restrictions on broadcast television – which has struggled to attract younger audiences – should be accompanied by equivalent regulation of online advertising on YouTube and Facebook.
Television executives also doubt that a ban would have the desired effect. They point out that the government’s own recent impact assessment suggested a pre-watershed ban on junk food adverts would result in the average child’s calorie consumption being reduced by a negligible amount: just 1.7 calories per day.
Multiple governments have made attempts over more than a decade to restrict junk food advertising on television, only to struggle with the detail of such a ban. This has resulted in figures such as Channel 4 presenter Jamie Oliver – a supporter of restrictions – finding himself effectively campaigning against executives at the channel.
Michael Grade, the former chief executive of Channel 4 and ITV, said on Friday that he has never seen any evidence proving that a blanket TV ad ban on junk food advertising has reduced a nation’s waistlines.
Grade, who led ITV when the TV and ad industry successfully saw off plans to impose a pre-9pm junk food TV ad ban in the last decade, said that if the plans are implemented the government must be prepared to drop them if they don’t work.
“I don’t know of any evidence that has been produced anywhere in the world that says ad bans actually do reduce [junk food] consumption,” he said. “But I do understand why the government feels it needs to do something. There is an obesity crisis and they have got to do something. I think the jury is out on the government’s action. What I wouldn’t like to see is for a ban to stay in place indefinitely. They need to look at it in two or three years’ time and see if it has any effect.”
A decline of about £700m in TV advertising on UK channels is expected this year and spending is not expected to return to pre-Covid 2019 levels until 2023. Before the pandemic, the British TV ad market was expected to reach about £4.4bn this year, but that has now been downgraded to £3.7bn, according to WPP’s media arm Group M.