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.?
Ad description
Three paid-for Google search ads for Patisserie Valerie, displayed in response to the search term “birthday cakes”, seen on 5 January 2026:
a. The first ad stated “Pistachio and Raspberry Cake” and featured an image of a cake with light green icing.
b. The second ad stated “Vintage Heart Cake Lambeth Iced Cake” and featured an image of a heart-shaped cake with white icing.
c. The third ad stated “Sweet Treat Sundae Cake” and featured an image of a cut cake with white icing and cherries on top, and a cream and jam filling.
Four further paid-for Google search ads, also for Patisserie Valerie, displayed in response to the search term “celebration+cake” seen on 11 February 2026:
d. The fourth ad stated “Raspberry Ripple Layer Cake” and featured an image of a cake with pink and white icing and buttercream decorations on top.
e. The fifth ad was identical to ad (a).
f. The sixth ad stated “Gingerbread Cake” and featured an image of a cake with white icing and whipped cream, candy canes and gingerbread men on top.
g. The seventh ad stated “Golden Honey Slice Cake” and featured an image of a square layer cake with pistachio and raspberry pieces on top.
Issue
The ASA received two complaints.
1. One complainant challenged whether ads (a), (b) and (c) breached the Code, because they were paid ads for identifiable less healthy food products placed on the internet.
2. One complainant challenged whether ads (d) – (g) breached the Code, for the same reason.
Response
1. & 2. Patisserie Valerie Production Ltd t/a Patisserie Valerie (PVPL) confirmed they had paid directly for the sponsored search ads. They provided Google invoices for their January and February 2026 advertising activity, together with a bank statement showing direct debit payments to Google made on 2 February 2026.However, they 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 January 2026, which was the first day of their financial year, they had 123 employees. They also benefitted from the services of two further individuals employed by another company, Bakers + Baristas UK Ltd (Bakers + Baristas), in a supporting role, approximately 50% of whose costs were recharged to PVPL. They provided a payroll report for the relevant date.
With regard to the corporate group structure within which they operated, PVPL was the manufacturing and selling entity and employed staff. Flour Power Group Ltd, the ultimate parent company, had no employees, nor did Flour Power Holdco Ltd, the holding company. Flour Power Marketing Ltd, which held the intellectual property rights and trademarks and licenced the brand to franchisees, also had no employees. Cakeco 11652 Ltd managed the franchise business on behalf of the group and did not employ any staff. The six physical Patisserie Valerie stores were run by independent franchisees and totalled 69 employees on 1 January 2026. They provided a list of employees for each store.
PVPL said Bakers + Baristas, which employed more than 250 individuals, was not part of the Flour Power/ Patisserie Valerie group and was not a parent or subsidiary undertaking of PVPL. It sat within a separate corporate group, albeit with some common shareholders, whose parent company was Causeway Capital, an Irish-registered investment management firm. They said Bakers + Baristas was a separate brand with a distinctive offering and operation to Patisserie Valerie, which did not sell products to Patisserie Valerie or sell Patisserie Valerie products.
Assessment
1. & 2. Not upheld
The CAP Code required that persons must not pay for ads for an identifiable less healthy food or drink product to be placed on the internet.
The ASA understood that PVPL had paid for the ads to be placed on the internet.
We considered that consumers who saw the ads could reasonably be expected to identify that the ads were for each of the named products shown in the images.
The rule stated that the restriction did not apply where the person paying for the ad to be placed online was, at the time the payment was made, a food or drink small or medium enterprise (food or drink SME), namely an enterprise that employed fewer than 250 people, including as part of a franchise agreement. The Advertising (Less Healthy Food Definitions and Exemptions) Regulations 2024 (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 first considered when payment for the ads was made, in order to determine which financial year’s employee headcount was relevant to our assessment. We noted that the invoices provided by PVPL did not identify which invoice entries or payments related to the specific ads complained of, and they did not provide further details or evidence as requested. However, PVPL’s Google advertising account appeared to operate on an automatic payment basis, under which recurring direct debit payments were taken in respect of ongoing advertising activity and invoices were issued for that activity. While that did not enable us to identify the precise payment date for each ad, we understood that payment was likely to have been made on a rolling basis, within at most a few days of the ads’ appearance on 5 January and 11 February 2026. We therefore considered that 1 January 2026, as the first day of the financial year in which the ads were paid for, was the appropriate date for assessing PVPL’s headcount under the Regulations.
Because PVPL was part of a wider corporate group, we next examined whether the employees of other businesses should be included in its headcount. We considered that the staff employed by the franchise operations should be counted. We also considered that any staff employed by PVPL’s parent company, Flour Power Group, and its holding, licensing and franchise management subsidiaries should also be counted. However, we understood they did not employ any staff on 1 January 2026. Additionally, PVPL had confirmed that approximately 50% of the time of two Bakers + Baristas employees was spent providing services to PVPL. We considered they were therefore employed, part-time, for the purposes of PVPL’s business and as such should be included in its headcount.
We also reviewed whether the total number of persons employed by Bakers + Baristas should be counted. While PVPL had not responded in full to our queries, we understood from information held by Companies House that the Bakers + Baristas group of companies was separate to the Flour Power/Patisserie Valerie group of companies. We understood that both those groups of companies were controlled by Causeway Capital, and that links between the groups included common shareholders, shared directors and the provision to PVPL of two individuals employed by Bakers + Baristas. We considered that those links indicated a degree of connection between the businesses. However, we acknowledged that they appeared to operate as separate brands and to sit as separate portfolio businesses within the wider Causeway structure rather than in a parent and subsidiary relationship. As such, we understood that Bakers + Baristas UK Ltd was not an “associated company” as defined by the Regulations. We therefore did not include Bakers + Baristas’ employee numbers when considering PVPL’s headcount.
We understood from the documents provided that PVPL employed 123 people directly and that the six franchised stores had a total of 69 staff. Including the two employees subcontracted from Bakers + Baristas, this gave an overall headcount of 194. PVPL had not fully addressed the queries we had raised in relation to Bakers + Baristas and the payment evidence. However, on the information available to us, we concluded that PVPL was an SME at the time payment was made for the ads.
We therefore concluded that the SME exemption applied. The ads fell outside the scope of the rule and did not breach the Code.
We investigated ads (a) to (g) under CAP Code (Edition 12) rule 15.19 (Placement of less healthy food and drink product advertisements online), but did not find them in breach.
Action
No further action required.
