Will making Health Star Ratings mandatory lead to gamification?

Food Standards Australia New Zealand (FSANZ) is in the middle of the process that could make Australia’s front of pack nutrition label scheme (Health Star Ratings, HSR) mandatory. While it is theoretically possible for the proposal to find that HSRs should not become mandatory, FSANZ is under such pressure to make it happen that it has started work before the Australian Dietary Guidelines are due for their first update since 2013. And now, FSANZ finds itself under increasing pressure in the face of the recent Four Corners “Duped” investigation into food labelling, which claimed that making HSRs mandatory will make things worse.  

Following this investigation, the Australian Competition & Consumer Commission announced inquiries into the Duped allegations. Will that investigation include whether Health Star Ratings are inherently misleading? This article attempts to ask a smaller question: will making Health Star Ratings mandatory incentivise gaming the HSR system? 

Where is the Health Star Ratings proposal at right now? 

At the time of writing, FSANZ has just completed its first call for submissions for making HSRs mandatory (Proposal 1067) and is now considering those submissions. The next step will be a second call for submissions which will include a cost benefit analysis as well as draft legislation. 

In the first call for submissions, it is worth highlighting the following quote from FSANZ itself about the efficacy of the HSR: 

While consumers often report that the HSR has influenced their purchasing decisions, typically to encourage healthier choices, real-world data suggests the impact of the HSR (as currently implemented) on purchasing may be minimal. [Emphasis added] 

Furthermore, FSANZ found that the HSRs only aligned with the Australian Dietary Guidelines 71% of the time. This means that 1 in 5 food products would either be represented as healthy when they are not, or in fact are healthy and yet represented as unhealthy. The Four Corners investigation took the analysis further, with the ABC reporting that more than a quarter of discretionary foods would receive a rating of more than 3 stars if HSRs were mandated. In short, the very system designed to encourage Australians to make healthier eating choices will falsely encourage them to choose foods not recommended by the Australia Dietary Guidelines.  

On top of that, prior to work on P1067 commencing, FSANZ was commissioned to conduct consumer research into the efficacy of the HSR. It found that 72% of Australian consumers do not understand HSRS or interpret them correctly. 

As the ABC quoted former FSANZ Board member Professor Mark Lawrence:  

“Normally, I would say it is much better to have health promotion programs that are mandatory. But when it’s a flawed design, mandatory is not the way you want to go.”  

It is worth noting that the Four Corners reporting has come under scrutiny, with a lot of assumptions stated as fact. For example, the New South Wales Food Authority has demanded a retraction from the ABC over the allegation that meat supplied in Australia for human consumption contained horse flesh.  

While the ABC correctly points out that the HSR algorithm (the calculation behind how many stars any given product will get) completely ignores food processing, it also asserts without foundation that a product containing emulsifiers and flavours should not market itself as “natural”. Humans have been using emulsifiers and flavourings for millennia. Whether the product is natural or not depends on the ingredients and processing in question. 

Categorisation is the biggest impact on star rating, not nutritional profile 

It is a common criticism of the HSR algorithm that it only focuses on punishing energy, sugar, salt and saturated fat whilst promoting protein, fibre and fruit and vegetable content. This applies a broad whole of diet paradigm to individual foods, while also ignoring many other well-established factors that are crucial to human nutrition. As was raised at FSANZ’s own stakeholder conference this year, many Australians have micronutrient deficiencies, none of which are measured by Health Star Ratings. 

That said, the biggest legal issue with making HSRs mandatory is not the algorithm but the categorisation of food products. For those who do not know, HSRs are designed to only compare foods within prescribed categories (categories 72% of Australians are unaware of). The system is not designed to compare a muesli bar with a yoghurt, for example. 

Further, different categories have their own algorithm. 

If you can move a product from one category to another, the star rating can jump from 0.5 to up to 4.5 without any change to its nutritional profile. 

It is almost an unspoken goal of the HSR system to encourage the food industry to reformulate products to make them more nutritious. But what if the goal is to get more health stars at the lowest possible cost as opposed to making a product more nutritious? 

Does making HSRs mandatory… gamify them? 

If so, the best game strategy will be to re-categorise your product, not to make it healthier. 

How easily will people be able to re-categorise their products? 

The least defined category under both the existing voluntary scheme and the proposed mandatory scheme is “dairy beverage analogues”. While this regulatory category already exists within the Australia New Zealand Food Standards Code (the Food Standards Code), its only current reason for existence is to set minimum protein requirements to allow for vitamin and mineral fortification. 

There is no definition of what a “dairy beverage analogue” can or cannot be. Can it be carbonated? Must it be white? Must it have a certain viscosity? Must it contain any protein whatsoever? 

None of this is prescribed. The current Implementation Guide for the voluntary scheme suggests “dairy beverage alternatives” includes any “plant-based products”.  

Troubling, and FSANZ in consultation has shown it is aware that industry could be incentivised to: 

• take a flavoured carbonated water product;  
• simply add sufficient seed, nut or cereal extract that the product contain 0.3% protein (10x less than milk on average); 
• say to yourself that the product is an “alternative” to a dairy product, like a chocolate milk; 
• meaning you would then be permitted to fortify the product with vitamins and minerals (and market their presence); 
• and then you would be permitted to count all the water and food additives including flavourings, vegetable oils and food additives towards the minimum 75% “dairy alternative” component, none of which would count towards the dairy component in an actual dairy product. 

This would be fully compliant. 

But isn’t this misleading? 

Under the current voluntary scheme, arguably yes. 

But under a mandatory scheme? Where industry is required by law to classify a product and declare the corresponding health stars on the front of pack? Then the law is the issue, not the outcome. 

When health stars were first introduced, the ACCC raised concerns with the system with the health star secretariat, not with industry. Under a mandatory scheme, the ACCC would have to take any concerns it has up with FSANZ, not with industry. 

This could shift the risk assessment for bad actors within the food industry to take advantage of the glaring legal deficiencies within the HSR system. 

In other words, making the HSRs mandatory may provide a legal smokescreen for bad actors within the food industry unless the health star algorithm fixes its “flawed design”. 

So will it incentivise gamification or – worse – adulteration? 

“Adulteration” has a specific meaning in the food industry, which involves substituting inferior, cheaper, often-non-food substances to food products. 

Adding trace amounts of plant protein and vitamins and minerals is not adulteration. 

But the incentive to identify the cheapest way to get the most stars on a product will lead to Australians and New Zealanders being misled as to the nutritional benefits of products, particularly the same discretionary foods that the HSR system is supposedly trying to get us to avoid. 

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