Junk food ads ban to cost burger giant £100m
The ban on advertising fast food aimed at children could cost Burger King up to £100m (€148.9m) in UK sales next year, it was reported today.
Giorgio Minardi, the company’s head of north west Europe, told the Daily Telegraph that once the children’s adverts stop airing, turnover will be hit “without doubt by approximately 10% to 15%”.
While the New York-listed company does not split out sales from individual countries, market research firm Euromonitor estimates that Burger King in the UK generated sales of £693m (€1.03bn) in 2004. That would lead to an impact of around £100m (€148.9m) in a worst-case scenario, the newspaper pointed out.
Mr Minardi said: “Advertising is a key part of our drive to get kids and families into our restaurants. It will have a major impact on our top line.”
His comments come less than a week after Burger King aired its last advert aimed at children – an advert promoting penguin toys based on animated film Happy Feet. It will continue to sell toys in its restaurants.
Mr Minardi said: “There’s nothing wrong with our kids’ meals, and the toys are part of that experience. We’re not going to take them out. What we’re not going to do is target kids directly.”
Burger King spends an estimated £10m (€14.8m) a year on advertising, with traditionally a third of that geared towards children. Media regulator Ofcom estimates that the lost advertising revenue to broadcasters will be £39m (€58m) when the ban comes into force next year.
Mr Minardi – a former senior McDonald’s executive who joined Burger King earlier this year – has vowed to turn around the fast-food chain. After years of decline, sales in the UK are now in positive territory thanks to the launch of the Aberdeen Angus beef burger.
Mr Minardi’s new head of marketing, David Kisilevsky, is confident that some of the lost business from the advertising ban can be offset elsewhere.
He has launched a major promotion of Double Whopper burgers while some of the advertising spend will be redirected to focus on to families.
Mr Kisilevsky said of the Double Whopper campaign: “People are starting to get a little bit fed up with the nanny state intrusion in our lives.
“It was important for Burger King to come out in a light-hearted way and say there is nothing wrong to partake in your love of a great burger.”
