Regulatory Crossroads: MAHA’s Impact on U.S. Food Advertising and Investor Implications

The U.S. food advertising sector stands at a regulatory crossroads as the Make America Healthy Again (MAHA) Commission’s proposed guidelines threaten to reshape industry dynamics. At the heart of this shift is a $12.5 million lobbying surge by major advertisers in the first half of 2025—a 11% increase from 2024—aimed at countering MAHA’s push to restrict marketing of unhealthy foods to children [1]. This spending, led by companies like Coca-Cola, PepsiCo, and McDonald’s, underscores the sector’s anxiety over potential regulatory overhauls and highlights the growing tension between public health goals and corporate interests.

MAHA’s Regulatory Framework: A Voluntary Approach with Loopholes

The MAHA Commission, chaired by HHS Secretary Robert F. Kennedy Jr., has proposed industry guidelines to limit “misleading claims and imagery” in food advertising targeting children [3]. While the initiative aligns with broader efforts to combat childhood obesity and chronic disease, its reliance on voluntary self-regulation—such as the Children’s Food and Beverage Advertising Initiative (CFBAI)—has drawn criticism. Public health experts argue that such programs lack enforceable mandates and contain loopholes, allowing companies to continue aggressive marketing tactics [1]. For instance, the CFBAI excludes snacks and beverages, two categories central to the industry’s revenue streams [4].

The Commission’s focus on deregulation further complicates its effectiveness. The leaked second MAHA report emphasizes reducing regulatory barriers for small producers and removing outdated food standards of identity (SOIs) [6]. While this could lower compliance costs for some businesses, it risks undermining public health protections by prioritizing industry flexibility over consumer safety.

Industry Lobbying: A Defensive Strategy

The food industry’s lobbying efforts reveal a defensive strategy centered on delaying or diluting MAHA’s recommendations. McDonald’s, for example, has spent $1.67 million on lobbying since January 2025, engaging with regulators on nutrition policies [1]. Similarly, the American Beverage Association has allocated $790,000 in Q1 2025 to oppose potential soda purchase restrictions under the SNAP program [5]. These expenditures reflect a broader industry narrative that MAHA’s proposals echo a failed 2011 FTC initiative and are unlikely to yield meaningful change [1].

However, this strategy may backfire. The White House’s assurance to industry insiders that there will be “no surprise regulatory crackdowns” [4] has emboldened critics who argue that voluntary measures are insufficient. For investors, this creates a paradox: while deregulation may reduce short-term compliance costs, it could also erode consumer trust and expose companies to reputational risks if public health outcomes worsen.

Global Comparisons: A Missed Opportunity

The U.S. lags behind the EU and Latin America in implementing robust food advertising regulations. The EU’s Nutri-Score labeling system, which uses color-coded ratings to highlight healthier options, has been adopted by multiple countries and shown effectiveness in guiding consumer choices [4]. In contrast, the U.S. lacks a comprehensive front-of-package labeling system, and its nutritional labeling rules have remained largely unchanged since the 1990s [5]. Similarly, soda taxes in the UK and France have curbed sugar consumption, while the U.S. remains divided on such measures [1].

MAHA’s admiration for European standards is selective. While it advocates for phasing out synthetic food dyes, it has not embraced policies like Nutri-Score or soda taxes [4]. This inconsistency leaves U.S. companies vulnerable to global competitors who operate under stricter but more transparent regulatory frameworks.

Investor Implications: Navigating Risks and Opportunities

For investors, the MAHA-driven regulatory environment presents both risks and opportunities. On the risk side, increased lobbying costs and potential product reformulation expenses could pressure margins. The FDA’s post-market chemical reviews, for instance, may delay ingredient restrictions and inflate R&D budgets [3]. Additionally, state-level initiatives—such as Texas Senate Bill 25, which mandates front-of-pack warning labels for products with over 40 additives—signal a fragmented regulatory landscape that could complicate compliance [2].

Conversely, companies that proactively align with MAHA’s deregulatory agenda may benefit. For example, firms investing in natural additives or functional ingredients (e.g., prebiotics, protein-rich products) could capture growing consumer demand for healthier options [2]. The projected 3% to 5% growth in U.S. food and beverage price/mix in 2026 [6] suggests that innovation and agility will be key differentiators.

Conclusion: A Delicate Balance

The MAHA Commission’s guidelines represent a pivotal moment for the U.S. food advertising sector. While the emphasis on voluntary action and deregulation may appeal to industry stakeholders, it risks falling short of public health objectives. For investors, the challenge lies in balancing regulatory uncertainty with strategic opportunities—whether through lobbying, product innovation, or navigating state-level policy shifts. As the debate unfolds, the sector’s ability to adapt will determine its long-term resilience.

Source:
[1] 'MAHA' calls for limits on food ads to kids likely to face industry opposition, [https://www.reuters.com/business/media-telecom/maha-calls-limits-food-ads-kids-likely-face-industry-opposition-2025-08-30/]
[2] MAHA Food Warning Labels Are Coming—Is Your NPD Strategy Ready?, [https://tracegains.com/blog/maha-food-warning-labels-are-coming-is-your-npd-strategy-ready/]
[3] Leaked MAHA Draft Pushes Deregulation, Voluntary Action, [https://www.foodnavigator-usa.com/Article/2025/08/18/leaked-maha-draft-pushes-deregulation-voluntary-action/]
[4] MAHA's European food envy is full of contradictions, [https://www.statnews.com/2025/07/10/maha-movement-vs-european-food-standards-make-america-healthy-again/]
[5] A Possible SNAP Soda Ban Gains Momentum from MAHA, [https://undark.org/2025/05/13/maha-snap-soda-ban/]
[6] Slow Growth Predicted in Circana's 2025/2026 Food & Beverage Outlook, [https://www.circana.com/post/circana-s-2025-2026-food-and-beverage-outlook-predicts-slow-growth-amid-shifting-consumer-priorities]