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

José G. Nuño-Ledesma

No 404571, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

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.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 25
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404571

DOI: 10.22004/ag.econ.404571

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