KFC caused a stir last week with outdoor advertising posters shouting the slogan 'Cheaper than your groceries'. Chicken burgers and fries with a few lettuce leaves are offered for the mere sum of €3,75 per person. In the same week that it was announced that 50% of the Dutch population is overweight, the advertisement unleashed a storm of indignation. In a Western world where fast food is now available on every street corner, it is becoming very difficult for many citizens to resist all these temptations of taste, convenience and price.
It was also the week in which Wageningen University & Research organised an event about true cost accounting (TCA). TCA is a method of calculating the 'true costs' of products, services or economic activities. Unlike traditional accounting, which focuses on direct financial costs and revenues, TCA also takes into account social, environmental and health costs, which are currently not included in the market price. The aim is to provide a more holistic and sustainable view of the true impact of production and consumption. It is clear that if social, environmental and health costs were also included in the KFC offer, the price would be significantly higher.
Why don't we implement TCA directly? That's not so simple. First of all, it is complex to map out all the costs properly and allocate them to a product. Secondly, the question logically arises as to who will pay for these costs. Given the social impact, it is clear that the price tag will ultimately end up on the consumer's plate. The practical feasibility of TCA is still a long way off and as long as supermarkets fight each other under the motto 'the highest quality for the lowest price', the motivation to pass on the actual costs in the consumer price is low and TCA will mainly remain a toy for researchers and NGOs.
Toy for researchers and NGOs
Nevertheless, TCA is the way to go to achieve a more conscious and healthy food system. After all, TCA is not only relevant for consumers, but also for food producers. As director of agro and food at Rabobank, Alex Datema continuously emphasizes the importance of 'true pricing' in his public appearances. Datema sees this as the way to reward farmers and horticulturists for the 'true value' they deliver to society. In addition to food production (with fewer animals), it also involves rewarding the delivery of green and blue services: measures in the business operations of farmers, horticulturists and fishermen that result in more biodiversity and better water quality. TCA helps to better map out the so-called hotspots, specific cost items.
Back to practice. In the current capitalist system, the food manufacturers and supermarkets, driven by margins and shareholders, will not take the lead, that much is clear. The government has a responsibility here, based on the realisation that healthcare costs will eventually become unaffordable. A number of buttons can be turned here. For example, the government can put a stop to advertising for fast food and sweets. Limit the number of visible locations where advertising is allowed and take a stricter look at misleading advertising on packaging. In the establishment policy, ensure that fast food providers are not located near schools. Another role for the government is to provide information. The prospect that people are getting older, but are already struggling with all kinds of chronic diseases at a much younger age can be an eye-opener for many people. A strong steering tool is VAT differentiation. 'Wheel of Five' products are rewarded with a low VAT rate. Products that fall outside this - fast food and sweets in particular - are taxed with a higher VAT rate. Finally, food education should be a standard part of the curriculum of primary schools. By acquiring knowledge about the origin and value of food at a young age, obesity is prevented and there are no problems later in life. tech fixes such as Ozempic, Wegovy and Saxenda, which means the industry earns twice as much from the consumer.
Government has a task
What you eat is and remains your own responsibility, but the government has the task of protecting citizens. Given the limited willpower of citizens, the living, working and residential environment plays a crucial role. Remove incentives, so that citizens can easily and quickly prepare a healthy and tasty meal with affordable products at home.
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.