Background
On 5 January 2026, new rules in the CAP and BCAP Codes on the advertising of “less healthy” food and drink products came into force.
The rules were supported by additional guidance, “Advertising of less healthy food and drink products”, which set out various tests and exemptions relevant to the ASA’s approach to assessing individual ads under the relevant Code rules.
The rules and guidance reflected the requirements of the Communications Act 2003, The Advertising (Less Healthy Food Definitions and Exemptions) Regulations 2024, and The Advertising (Less Healthy Food and Drink) (Brand Advertising Exemption) Regulations 2025.
Ad description
A paid-for Instagram ad for Cadbury Gifts Direct, seen on 20 March 2026, featured a caption that stated “NEW personalised Cadbury Easter eggs […] #eastereggs […] #cadbury #cadburyeggs […].
It featured a video of two people holding large, personalised Easter eggs with the names “ELLIE” and “LIAM” and small photographic images of the two individuals visible on the packaging. One of the individuals said to the other, “They’ve actually put our names on them.” The other replied, “I know, look at that, so cool.” The other replied, “Best Easter ever.”
The “Ellie” egg showed an egg in gold foil inside a box. The outer packaging featured the text “Cadbury” and “HALF & HALF” alongside a milk chocolate square and a white chocolate square.
The “Liam” egg showed an egg in gold foil inside a box. The outer packaging featured the text “Cadbury” and “INCLUSIONS” alongside a milk chocolate square that had been bitten into showing there were crunchy bits inside and a piece of chocolate egg also with crunchy bits inside.
Overlaid text on the video stated, “Cadbury Gifts Direct”. A “[link emoji] Start shopping today” button appeared across the ad in a white text box. Text at the bottom of the ad stated “cadburygiftsdirect.co.uk”, “cadburygiftsdirectofficial” next to a “shop now” button.
Issue
Bite Back challenged whether the ad was a paid-for ad for an identifiable less healthy food product placed on the internet.
Response
Hemingways Marketing Services Ltd t/a Cadbury Gifts Direct (Hemingways) said they were a small or medium-sized enterprise (SME) and were therefore exempt from the restrictions on the advertising of “less healthy” products. They said on 1 May 2025, which was the first day of their financial year in which the ad was published, they had 122 permanent employees and provided a payroll report covering the period worked 1 to 31 May 2025 to evidence that. They had also employed an additional 16 temporary employees during the first fortnight in May 2025 and provided a payroll report covering that period. They said there were other companies in the Hemingways group and provided a chart showing the corporate structure and the numbers employed by each company. They said there were 160 employees across the group on 1 May 2025, including employees in the overseas companies. They provided payroll reports for the other companies in the group. They explained that one of the active overseas companies in the group (Hemingways Marketing Services Pty) did not have any employees; the day-to-day operations of that company were carried out by staff employed by Hemingways Marketing Services Ltd and charged back to the Pty company. To evidence that, they provided an annual invoice for the financial year 2025/26 showing staff costs incurred by the Pty company. There were also three dormant companies in the group that did not have any employees.
They explained that they had a long-standing commercial relationship with Mondelez Europe GmbH (Mondelez) under a trademark licence (which was a brand licensing agreement, not a franchise agreement). They said it was a long-standing commercial arrangement that had been in place for several decades and the agreement was not drafted with the “less healthy food” restrictions or SME exemption provisions in mind; it reflected a genuine and established brand owner/licensee relationship. They said that the arrangement was, amongst other things, a trademark licence and whilst it contained some brand governance and approval provisions, it did not create a franchisee/franchisor structure. They provided a copy of a document called a Trademark License' entered into with Mondelez. The purpose of the agreement was therefore to grant intellectual property rights relating to the website URLs and trademarks, rather than to establish a franchise arrangement or provide Mondelez with ongoing operational control over Hemingways’ business.
While they accepted that the agreement related to the sale and distribution of food, they did not believe that the definition of a “franchise agreement” in Regulation 4 of The Advertising (Less Healthy Food Definitions and Exemptions) Regulations 2024 (the Regulations) was met.
Regulation 4 defined a franchise agreement as where one undertaking (the franchisee) and another undertaking (the franchisor) agreed that the franchisee carried on a business activity which included the sale or distribution of food or drink (the franchise business), and where the following conditions were met: (1) the food or drink provided in the business; (2) the internal or external premises where the business was carried on; and (3) were agreed by the franchisor and were similar to those of other undertakings in respect of which the franchisor had entered into comparable contractual arrangements.
They explained that they purchased product stock from Mondelez or its affiliates and sold it to customers via the Cadbury Gifts Direct website. They said they retained commercial autonomy in relation to marketing, sales and stock decisions. They said that level of commercial autonomy was inconsistent with the degree of product and operational control ordinarily associated with a franchise arrangement.
With regard to the internal and external appearance of the premises where the business was carried on, they said Hemingways operated its business from warehouse facilities which had no customer-facing presence and did not display external Cadbury branding. They were simply operational facilities used to store, pack and distribute products. Whilst the agreement did require Hemingways to operate from approved facilities, permit access to representatives, comply with applicable laws and regulations and meet specified quality standards, they said those provisions were directed towards regulatory compliance, product integrity and food safety. They did not believe they were requirements which controlled the internal or external appearance of premises in the manner contemplated by Regulation 4. They said Mondelez did not carry out routine quality audits of the warehouse facilities and the last site audit took place in 2006.
In relation to the cadburygiftsdirect.co.uk website, and whether it could function as a digital “shop window” for the purposes of Regulation 4, Hemingways said they retained autonomy for the overall appearance, operation and management of the website, subject only to standard trademark and brand governance provisions which were intended to protect and maintain brand equity, rather than serve to exert day-to-day operational control over the website. They had autonomy over how products were photographed, how imagery was created and presented on the website, and how website content was designed and displayed. Whilst they received brand guidance from Mondelez relating to matters such as logo usage and colour specifications, the design, implementation and presentation of website content were matters for Hemingways and no routine approval or sign-off was required from Mondelez in relation to those activities.
Hemingways did not accept that the business model used for the operation of its Cadbury Gifts Direct business was agreed by Mondelez; they retained significant autonomy in relation to the operation of the business, independently determined their operating model, marketing activity, fulfilment processes, customer service arrangements and commercial strategy. Whilst there was co-operation between the parties regarding consumer complaints, there was no shared complaints process or common set of rules imposed by Mondelez for handling such complaints. Furthermore, given their longstanding commercial relationship, many operational processes had become well established through experience and custom.
Regarding the final part of the Regulation 4 definition of a franchise, that the franchisor had entered into comparable contractual arrangements, they said they were not in a position to comment on whether Mondelez had entered into comparable contractual arrangements with third parties. That information sat exclusively with Mondelez.
They confirmed that Hemingways Marketing Services Ltd had paid for the ad. It had been created and placed entirely by Hemingways without any input from Mondelez. They provided invoices from Meta and a redacted bank statement showing the relevant transactions in March 2026.
Assessment
Not upheld
CAP Code rule 15.19 required that persons must not pay for an identifiable less healthy food or drink product to be placed on the internet.
Hemingways had asserted they were a small or medium enterprise (SME) and as such they were exempt from rule 15.19. The ASA therefore assessed whether they were an SME, including whether their arrangement with Mondelez meant they fell within the scope of the of the definition of an SME set out in the Regulations.
We first considered that consumers who saw the ad could reasonably be expected to identify that the ad was for personalised Cadbury’s Easter eggs, including the “half and half” and “inclusions” varieties shown in the ad.
We understood that Hemingways Marketing Services Ltd had, without any input or approval from Mondelez, created the ad and had paid for it to be placed on the internet.
The restriction in rule 15.19 did not apply where the persons paying for the ad to be placed online was a food or drink small or medium enterprise (food or drink SME), namely an enterprise that employed fewer than 250 people across the relevant businesses, including as part of a franchise agreement. The Regulations further defined a food or drink SME as an enterprise that, during a financial year, carried on one or more businesses which involved or were associated with the manufacture or sale of food or drink, and that, on the first day of that financial year, employed fewer than that number for the purpose of those businesses. In addition to franchise businesses, that included international staff and members of staff of an “associated company” of the business who also worked for the purposes of the business, with “associated” denoting a company that was a parent undertaking or a subsidiary undertaking of the company that owned the business.
We understood that 1 May 2025, as the first day of the financial year in which the ad was paid for, was the appropriate date for assessing employee numbers under the Regulations. We noted that Hemingways had provided month-end figures for May 2025 and a mid-month figure in respect of its temporary employees. Given the proximity of those figures to the relevant assessment date, we considered them sufficiently reliable for the purposes of accurately determining the total number of employees. The payroll reports showed that 160 employees in total were employed across the corporate group. We therefore did not assess whether all of the businesses in the Hemingways corporate group were working for the purposes of its food retail business, because we accepted there were fewer than 250 employees across the whole group. We also noted that Mondelez was not part of the Hemingways corporate group.
We then assessed whether Hemingways was operating under a franchise agreement with Mondelez for the purpose of the manufacture or sale of food or drink within the definition of a franchise agreement as set out in Regulation 4 and cited in the Response section above.
We understood that Hemingways had a long-standing commercial relationship with Mondelez dating back decades and that the trademark licence agreement dated back to the early 2000s, long before the restriction on the advertising of less healthy foods came into force.
We considered the terms of the agreement as well as the information provided by Hemingways regarding how the arrangement operated. We concluded, on balance, the evidence they had provided was sufficient to demonstrate that Hemingways was not operating under a franchise agreement with Mondelez and therefore Mondelez’s employee numbers were not relevant to assessing Hemingways’ employee numbers under the Regulations.
For those reasons, we considered Hemingways had demonstrated that on the first day of the financial year in which Hemingways Marketing Services Ltd paid for the ad to be placed, it employed fewer than 250 people for the purposes of those food and drink-associated businesses. We therefore considered that at that time Hemingways was a food or drink SME for the purposes of the exemption. The ad therefore fell outside the scope of the rule and did not breach the Code.
We investigated the ad under CAP Code (Edition 12) rule 15.19 (Placement of less healthy food and drink product advertisements online), but did not find it in breach.
Action
No further action necessary.
