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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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