According to Chile’s National Statistics Institute, the country’s three main causes of death are cancers (26%), cardiovascular diseases (25.6%), and respiratory diseases (12.6%). 1 A major contributing factor to such non-communicable diseases (NCDs) are overweight and obesity, 2 which affects 74.2% of Chile’s population. 3 Moreover, people in lower socioeconomic groups suffer from higher rates of obesity, and women are more obese and morbidly obese than men. 4 Overweight and obesity are fundamentally caused by an energy imbalance between calories consumed and calories expended, making dietary habits and physical inactivity key risk factors. In this regard, it is not surprising that Chileans suffer from high rates of overweight and obesity and diet-related NCDs: they are large consumers of sugary drinks, averaging 190 calories per person per day,Reference Popkin and Hawkes 5 and buy on average 201.9 kg of ultra-processed foods and beverages per person per year. 6 As regards physical activity, 86.7% of Chileans lead sedentary lifestyles, exercising less than three times a week. 7
It is against this background that the Act on the Nutritional Composition of Food Products and their Advertising (the Food Act) entered into force in 2016. 8 The goal of this ambitious act was to promote healthier diets by introducing a mandatory front-of-package warning label (FOPL) for foods high in fats, sodium, sugar, or calories (HFSS foods), strict marketing and advertising restrictions of HFSS foods to children, and a sales ban of HFSS foods in schools, among other measures. Crucially, the Food Act is at the heart of a comprehensive, multi-sectoral nutrition policy aimed at curbing obesity and diet-related diseases, which includes an 18% excise duty on sugary drinks, 9 the promotion of breastfeeding, 10 and a prohibition to use nutrition and health claims on HFSS foods and food supplements. 11
From the outset of the parliamentary discussions of Chile’s proposed Food Act, national and multinational food companies expressed their discontent, advocating for an approach based on voluntary self-regulation and public-private partnerships instead. 12 In opposing the Food Act and its related regulations, the industry used all available means to try to influence the outcome of the legislative and regulatory processes and the perceived legality of these regulatory actions.
Illustrative are the international economic law concerns raised by corporations and industry associations in stakeholder submissions during public consultations related to Chile’s subsequent regulations implementing the Food Act, as well as their extensive coordination with their government representatives to raise similar concerns in diplomatic government-to-government exchanges, particularly at the World Trade Organization’s Technical Barriers to Trade Committee.Reference Dorlach and Mertenskötter 13 Moreover, the food industry expressed concerns under national law grounds in several parliamentary hearings and stakeholder submissions. These legal concerns were primarily based on constitutional rights, including the right to freedom of commercial expression and the right to property.
Taking these arguments as a starting point, this contribution shows how the industry relied heavily on the right to freedom of commercial expression during parliamentary hearings and stakeholder submissions to oppose Chile’s advertising and marketing restrictions, but later on relied primarily on the right to property to build their arguments in formal legal challenges. It is argued that this practice reflects an instrumentalization of legal rights, and is part and parcel of the industry’s legal strategies to oppose state regulation more generally.
Taking these national law challenges as a starting point, the goal how the industry relied heavily on the right to freedom of commercial expression during parliamentary hearings and stakeholder submissions to oppose Chile’s advertising and marketing restrictions, but later on relied primarily on the right to property to build their arguments in formal legal challenges. It is argued that this practice reflects an instrumentalization of certain legal rights, and is part and parcel of the industry’s legal strategies to oppose state regulation more generally.
After briefly describing the most contested measures introduced by the Food Act and its related regulations, I consider more fully specific arguments raised by multinational food companies in challenging some of these measures, and explore possible explanations as to why arguments alleging breaches of freedom of commercial expression were not included in subsequent formal legal challenges. Finally, I offer brief concluding remarks.
Chile’s Strengthened Food and Nutrition Policy
The Chilean Food Act became fully operational on 27 June 2016, when its implementing decree entered into force. 14 The Food Act contains inter alia provisions regulating food labelling and food information, food sales of foods in schools, and food marketing and advertising. Additionally, regulations concerning health and nutrition claims were adopted separately by Chile’s Ministry of Health to bring relevant rules in compliance with the newly adopted Food Act.
Front-of-Package Warning Labels
The Food Act’s mandatory FOPL scheme mandates that food products that exceed certain nutrient thresholds for sodium, sugar, fats and calories be marked with black octagonal warning signs (resembling traffic STOP signs) on the front of their packaging. 15 Written on these signs is the warning “High in…” for each nutrient exceeding the legal thresholds (e.g. “High in sugar”). Thus, a product may may have to display up to four “High in…” warnings, occupying significant space from the front face of a product’s packaging. The nutrient thresholds set by the Ministry of Health are also particularly strict if compared with the voluntary FOPL schemes introduced in other countries, like the United Kingdom or Australia for example. 16 However, they have been applied gradually to allow sufficient time for the industry to adapt. The strictest thresholds entered into force on June 27, 2019 and the FOPL scheme will be mandatory for smaller businesses as of June 27, 2022.
Marketing and Advertising Restrictions
Strict marketing and advertising restrictions were included in the Food Act to protect children from pervasive and ubiquitous exposure to unhealthy food marketing. 17 In particular, HFSS foods can no longer be advertised to children under 14 years of age, 18 and cannot appear on TV or in cinemas between 6 am and 10 pm. 19 Crucially, the advertising ban to children has been interpreted by health authorities as prohibiting also the use of cartoons and other child-attractive figures on the packaging of HFSS foods, affecting brand equity characters such as Tony the Tiger and Cheetos’ Chester Cheetah. 20 Finally, marketing restrictions have banned the use of “commercial hooks” unrelated to the product itself (e.g. toys, contests, raffles, stickers, games, etc.), banning products like Ferrero’s Kinder Surprise eggs from the Chilean market. 21
Prohibition of Using Nutrition and Health Claims
The use of voluntary nutrition and health claims such as “sugars-free” on HFSS foods has also been prohibited, primarily on the basis that they could mislead consumers. 22 Moreover, the use of such claims has been banned from certain food products regardless of their nutritional composition because they do not align with the varied and balanced diet that Chile is seeking to promote according to its dietary guidelines and national nutrition policy. Such products include food supplements, sports foods, and infant formulas. 23
Legal Arguments Raised by the Food Industry
In addition to arguments based on international economic law, the food industry has also raised several objections based on Chilean constitutional law in their attempt to oppose the Food Act and its related regulations, and in particular arguments pertaining to the right to freedom of expression and the right to property.
The Right to Freedom of Commercial Expression
Concerns related to the right to freedom of commercial expression were first raised during parliamentary hearings discussing the Food Act bill. In particular, the National Advertisers Association (NAA), whose list of members includes multinational food companies such as Coca-Cola, Unilever, and Nestlé, 24 stressed that the restrictions included in the bill would infringe Article 19(12) of the Chilean Constitution, which protects the “freedom to express opinions and to inform, without previous censorship, in any form and by any means.” 25 The interpretation advanced by the NAA also claimed that freedom of commercial expression was as “indispensable” as any other form of expression or communication (e.g. artistic, political and journalistic), and thus protected to the same degree. 26
It is worth noting that such an interpretation was very expansive considering that commercial speech has traditionally been excluded from discussions concerning freedom of expression in Chile. The concept itself was not mentioned by the Chilean constituents mentioned when discussing the inclusion of freedom of expression in the Chilean Constitution, and is normally not included in leading academic works on the topic.Reference Charney, Marshall, Contreras and Salgado 27 Moreover, the interpretation advanced by the industry did not consider that the advertising restrictions only apply to a subset of products, i.e. HFFS foods, and only when directed at children. Neither did it consider that the right to health is also protected by the Chilean Constitution. These are all important factors to consider, as the Constitutional Court of Chile has explicitly acknowledged that freedom of expression is not an absolute right and can and should be subject to legitimate restrictions in a democratic society to protect other rights and values, including public health. 28 Taking into account the widespread use of a proportionality test to strike a fair balance between competing interests,Reference Garde, Shuibhne and Gormley 29 one would have expected considerations relevant to such test to have been included in the NAA’s arguments relating to commercial speech or freedom of commercial expression. As discussed below, a better understanding of the industry’s arguments based on commercial speech reflect an instrumentalization of certain legal rights to oppose food marketing and advertising restrictions, rather than genuine concerns based on their understanding of their legal entitlements.
Similarly, concerns related to commercial speech were raised by the Latin American Alliance for Responsible Nutrition (ALANUR) — an association that represents producers of food supplements in Latin America — albeit in relation to proposals to ban the use of nutrition and health claims on food supplements and sports foods. These concerns were raised in stakeholder submissions during public consultations, where the industry claimed that the right of business operators to inform consumers about the science-based health benefits of their food products was also protected under Article 19(12) of the Chilean Constitution. 30 By anchoring their arguments on the scientific accuracy of the nutrition and health claims — rather than on commercial speech more generally — the industry was also able to invoke Articles 29 and 33 of the Chilean Consumer Protection Act, which permits the dissemination of accurate and truthful product information. The Ministry of Health responded stressing that the industry’s right to inform was already guaranteed by the possibility to provide relevant information to consumers in the ingredients list and nutrition declaration of their food products. It further argued that using nutrition and health claims could not be permitted taking into account Chile’s nutrition policy, which seeks to promote a varied and balanced diet.
The Right to Property
The right to property has been at the center of formal legal challenges against the Food Act and its related regulations. The food industry has primarily challenged the prohibition to use child-attractive trademarks on the packaging of their food products, claiming that such prohibition constitutes a “regulatory taking” of their intellectual property. Lawsuits were filed by multinational companies including Kellogg’s, 31 PepsiCo, 32 and Carozzi. 33 Whilst most cases have been dismissed, one major case is still pending. 34
In their claims, the industry relied on Article 19(24) of the Chilean Constitution, which protects the right to property and states that “[o]nly the law may establish the form of acquiring, using, enjoying, and disposing of property.” Since the Food Act and its related regulations do not include trademarks in their definition of advertising, the industry claimed that health authorities’ prohibition to use child-attractive trademarks on the packaging of HFSS foods was illegal and expropriatory, demanding adequate and effective compensation. 35
Thus far, courts have ruled against the food industry, stating that trademarks fall within the scope of the Food Act and its related regulations, 36 which means that resulting use-restrictions do not constitute a deprivation of the companies’ intellectual property rights. 37 Courts have also weighed the right to property against the right to health, ruling that public health concerns justify Chile’s advertising restrictions. 38 Overall, the advertising restrictions have been found to be lawful under Chilean law, and health authorities have been given a wide margin of discretion to implement the Food Act and its related regulations. 39
Remarks on the Food Industry’s Legal Strategies
It is interesting to note that not all legal arguments raised prior to the adoption of the Chilean Food Act and its related regulations have reached national courts. Although legal arguments raised in formal legal challenges are largely dependent on the factual circumstances of the case — which in Chile have primarily concerned decisions of health authorities prohibiting the use of trademarks — two factors may explain why the food industry has not invoked the right to commercial speech in formal litigation.
Firstly, by contesting primarily the trademark restrictions read into the Chilean Food Act and its related regulations — and linking this to the constitutional protection of the right to property — the food industry has sought to center the courts’ attention on questions concerning the scope of application of the Food Act and on the alleged lack of powers of health authorities, thus avoiding questions of proportionality. This strategy is further confirmed by the large amount of evidence submitted to demonstrate that the use of trademarks on the packaging of food products should not be considered to be a form of advertising. 40
Secondly, by relying on the high level of protection afforded to the right to property by the Chilean Constitution and traditionally by the Chilean judiciary, the industry confidently put forward the interpretation that intellectual property was protected under the Constitution to the same degree as normal property. Such interpretation was likely reinforced by concordant opinions of prominent Chilean constitutional and intellectual property lawyers, some of whom submitted legal expert opinions supporting the industry’s case. 41
Had the industry advanced alternative or complementary arguments based on the right to freedom of commercial expression, it would have had to overcome several legal hurdles, such as convincing the courts that the right to freedom of expression covers commercial speech and also protects it to the same degree as other forms of expression (e.g. artistic, political and journalistic). Moreover, the industry would also have had to make a prima facie case that the restrictions on commercial speech were disproportionate in the context of Chile’s obesity epidemic. These difficulties could explain why there has been no lawsuits to date challenging other aspects of the strict marketing and advertising restrictions introduced by Chile, as well as the prohibition to use nutrition and health claims to promote certain products, despite their being strongly resisted during parliamentary hearings and public consultation procedures.
Conclusion
Consistent with research demonstrating the relevance of interpretive contests between regulators and corporations over the legality of specific regulatory measures, 42 this contribution has shown that the food industry put forward very expansive interpretations of the right to freedom of expression during parliamentary hearings and public consultation submissions to protect their advertising and marketing practices from State regulations in Chile. However, once adopted, arguments on the right to freedom of expression were not included in formal legal challenges, suggesting that industries’ pre-regulatory interpretive practices do not necessarily correspond to their actual understanding of their legal entitlements, but are rather part of their overall legal strategies to do away with or diminish the effect of unwanted State regulations. The fact that no other lawsuits have been filed against unparalleled strict advertising restrictions of food products introduced by Chile, as well as prohibitions to use science-based nutrition and health claims on certain food products, further reinforces this conclusion.
Note
The author has no conflicts to disclose.
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