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Restricting Volume Price Promotions of "Less Healthy" Foods and Beverages

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  • Nuño-Ledesma, José G.

Abstract

England recently banned volume-based promotions of foods high in fat, sugar, or salt. When these promotions are used to induce market segmentation, removing them can lead to counterintuitive outcomes and frustrate policy goals. To illustrate how, I use a standard nonlinear pricing model where a single-product seller serves two types of buyers. Without regulation, the seller distorts consumption down for low-preference consumers. After regulation; if the seller serves low-types, the strategic under-provision of quantity is not necessary, reducing consumption for high-type buyers but increasing consumption for low-types. When the seller does not serve low-types consumption by high-types remains steady.

Suggested Citation

  • Nuño-Ledesma, José G., 2026. "Restricting Volume Price Promotions of "Less Healthy" Foods and Beverages," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404571, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404571
    DOI: 10.22004/ag.econ.404571
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    References listed on IDEAS

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    1. José G. Nuño‐Ledesma & Steven Y. Wu & Joseph V. Balagtas, 2025. "Soda taxes versus cup sizes when the retailer practices nonlinear pricing: An experiment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 73(3), pages 229-246, September.
    2. Brian A Bourquard & Steven Y Wu, 2020. "An Analysis of Beverage Size Restrictions," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 169-185, January.
    3. José G. Nuño‐Ledesma & Steven Y. Wu & Joseph V. Balagtas, 2024. "Taxing sugar‐sweetened beverages: A nonlinear pricing approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 967-981, March.
    4. Bokhari, Farasat A.S. & Dobson, Paul W. & Morciano, Marcello & Suhrcke, Marc, 2023. "Banning volume discounts to curb excessive consumption: A cautionary tale," European Economic Review, Elsevier, vol. 156(C).
    5. Armstrong, Mark & Rochet, Jean-Charles, 1999. "Multi-dimensional screening:: A user's guide," European Economic Review, Elsevier, vol. 43(4-6), pages 959-979, April.
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