The potential impact of reducing sodium in packaged food: The case of the Chinese instant noodles market

Abstract Reducing sodium intake has been identified as a priority and cost‐effective intervention in lowering the risk of hypertension and cardiovascular diseases. To accomplish the population‐wide sodium reduction, two main strategies regarding food supply have been widely discussed: one is to set mandatory standards for the sodium content of foods and the other is to call for efforts from the food industry to voluntarily reduce sodium. Using the Chinese instant noodles market as an example, we estimate a random‐coefficients logit demand model to quantify the degree of substitution between competing products and between sodium and fat. The demand estimates are then used to simulate three sodium reduction strategies: a unilateral reduction by one firm, and industry‐wide reductions by multiple firms with and without reformulation of fat content. We find that voluntarily sodium reduction by a single firm results in its sales loss to its competitors; an industry‐wide sodium reduction causes demand reduction to be more evenly distributed across participating firms; and an industry‐wide reduction accompanied by an increase in fat content largely negates the adverse effect of sodium reduction on sales but risks an increase in population fat intake. [EconLit Citations: D12; I18; L66].