The Response to Nutritional Labels: Evidence from a Quasi-Experiment.

This paper evaluates a recent UK policy that aimed to improve dietary information provision by introducing nutrition labelling on retailers’ own-brand products. We examine the effect of Front-of-Pack (FOP) nutrition labels on retailers as well as households, using the timing of introduction of FOP labels as a quasi-experiment. Using data on all grocery purchases by a UK rolling panel of 20,707 households between 2005 and 2008, we estimate retailer strategic responses and household demand models. Our findings show that retailers reformulated labelled foods and introduced new products. On the households’ side, labelling led to a reduction in the share of spending on labelled foods. However, we find no clear indication of any change in the “healthiness” of the shopping basket, suggesting that households reduced their spending without changing the nutritional composition of the food basket.