Plain packaging could cost major FMCG firms $187bn

 
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Coca-Cola could have billions wiped off its value (Source: Getty)

The extension of plain packaging policies could cost companies as much as $187bn (£140bn), a report released today has estimated.

Major companies including Coca-Cola and AB InBev would be exposed to major loss of value if plain packaging proposals are taken up for alcohol, confectionery, savoury snacks and sugary drinks, according to consultancy Brand Finance.

According to the report, Pepsi could lose more than a quarter of its enterprise value, making it the biggest potential loser proportionally.

Coca-Cola however would lose the most in absolute terms, as a cost of $47bn faces the corporation.

If mandatory plain packaging for alcohol is introduced, huge drinks companies including AB InBev, Heineken and Pernod Ricard could see their entire portfolio of brands exposed to legislation.

Earlier this year, Cambridge academic Wolfram Schultz called for plain packaging to be applied to fatty, salty foods to improve public health. Other voices in public health have followed suit, with the British Medical Association saying in June that labels should be added to sweets in order to reduce consumption among children.

Read more: Ignore the nanny statists – plain cigarette packaging does not work

David Haigh, chief executive of Brand Finance, said: "To apply plain packaging in the food and drink sector would render some of the world’s most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies."

For beverages alone, Brand Finance estimated that the potential loss could be as much as $293bn.

"Predicted loss of brand contribution to companies at risk is only the tip of the iceberg," added Haigh. "Plain packaging also means losses in the creative industries, including design and advertising services, which are heavily reliant on FMCG contracts."

Read more: Sugar-free Coke is now as popular as regular Coke

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