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The head of Germany’s biggest private broadcaster has hit out at an “ideological” government plan to curb junk food advertising, warning that it will worsen the strain on the TV industry at a time of concern about the health of the broader economy.
Thomas Rabe, chief executive of the European broadcasting network RTL Group, said that a proposal by the Green food and agriculture minister Cem Özdemir to ban junk food adverts was an example of the “overregulation” that was weighing down the largest economy in Europe.
He argued that the ban, which would prevent broadcasters from showing adverts for unhealthy foods aimed at children during certain time slots, would have a “significant” impact on the television industry at a time when it is already struggling.
“It is a fact of life that the German TV advertising market is the weakest among the bigger advertising markets in Europe and has been for a while,” Rabe told the Financial Times. “That has to do with private consumption, consumer confidence and the like.”
Earlier this month, RTL Group reported a 12.5 per cent slump in advertising revenue in the first half of 2023 that hit overall revenues and profits. It was driven primarily by a decline in Germany.
Rabe’s comments come amid gloom and anxiety in Germany about the state of the nation, which is forecast to have the worst-performing economy of the world’s leading nations this year and is facing challenges from a lack of digitalisation to faltering global trade.
The country’s justice minister, Marco Buschmann, on Wednesday warned that companies in Germany were experiencing “bureaucracy burnout” but promised that ministers were listening and striving to reduce the burden.
Rabe, who is also chief executive of RTL’s parent company Bertelsmann, argued that the German economy was actually “in much better shape than many people think,” adding that there was a “tendency right now to talk the country down”.
But he also said that the debate should be a “wake-up call” for politicians who needed to better appreciate the importance of private companies to the nation’s overall wellbeing. “They should be handled with respect and with care and should certainly not be over-regulated and burdened with bureaucracy, which adds little value,” he said.
Rabe said that the proposed advertising ban, which has also met with opposition from the liberal members of chancellor Olaf Scholz’s ruling three-way coalition, was an example of the excessive load being placed on corporations.
This plan, he said, was “overdone, it’s disproportional, and it’s ideological — and there’s no proper scientific basis for banning advertising, hoping that this will have an impact on the health of people and young people in particular. But the effect on the industry and the effect on companies, that rely on advertising, is significant.”
Germany has more liberal rules on advertising unhealthy foods to children than some other European countries such as Sweden and Norway.
Özdemir has won the backing of doctors, dentists and health associations for his proposal to ban TV adverts for foods that are high in sugar, fat or salt and aimed at children, which would apply from 5pm to 10pm on weekdays and during additional slots on weekends. Supporters aim that the plan will help tackle obesity, diabetes and other illnesses.
But the draft law — which has already been watered down by Özdemir in the face of opposition — has drawn the ire of food manufacturers and industries dependent on advertising.
Bertelsmann on Wednesday reported record revenues of almost €10bn in the first six months of 2023, driven by strong performance at its record label BMG, its education group and its international services division Arvato. But it suffered a squeeze on profits, which fell from €492mn in the first half of 2022 to €260mn in the same period this year.
The drop, the company said, was caused partly to a contentious decision to cut jobs and sell a raft of titles at the company’s German-language magazine division that was announced earlier this year.
Additional reporting by Guy Chazan in Berlin