A healthy food standard will be introduced for supermarkets and other retailers as part of government plans to tackle obesity levels in the UK.

As part of a government initiative aimed at taking some pressure off the NHS, food retailers and manufacturers will “make the healthy choice the easy choice” for customers in a country with the third highest adult obesity levels in Europe.

Supermarkets will be required to report sales data and those that fail to hit targets could face financial penalties, Nesta, the innovation agency which initially developed the policy, suggested.

Businesses will be free to choose how to implement the new healthy food standard, which aims to make their customers’ average shopping healthier.

Measures could include reformulating products and tweaking recipes, changing shop layouts, offering discounts on healthy foods, or changing loyalty schemes to promote healthier options.

Obesity is one of the root causes of diabetes, heart disease and cancer.

The new scheme, announced on Sunday by the Department for Health and Social Care, is part of the forthcoming 10 Year Health Plan, through which the government is seeking to shift from sickness to prevention to alleviate the burden on the NHS.

Health Secretary Wes Streeting said: “Obesity has doubled since the 1990s and costs our NHS £11bn a year, triple the budget for ambulance services. Unless we curb the rising tide of cost and demand, the NHS risks becoming unsustainable.

“The good news is that it only takes a small change to make a big difference. If everyone who is overweight reduced their calorie intake by around 200 calories a day – the equivalent of a bottle of fizzy drink – obesity would be halved.

“This government’s ambition for kids today is for them to be part of the healthiest generation of children ever.

“That is within our grasp. With the smart steps we’re taking today, we can give every child a healthy start to life.”

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Environment Secretary Steve Reed said: “It is vital for the nation that the food industry delivers healthy food, that is available, affordable and appealing.”

An ‘important step’

Michelle Mitchell, Cancer Research UK’s chief executive, said: “Businesses can play a major role in supporting people to make healthy choices, and this important step could help to reduce rising obesity rates.

“Being overweight or obese is the second biggest cause of cancer in the UK, and is linked with 13 different types of the disease.

“The UK government must introduce further bold preventative policies in both the upcoming 10-year health plan and National Cancer Plan, so that more lives can be saved from cancer.”

Some of the UK’s biggest supermarkets appear to have reacted positively to plans for a new standard of healthy food, with Ken Murphy, Tesco Group CEO, saying: “All food businesses have a critical part to play in providing good quality, affordable and healthy food.

“At Tesco, we have measured and published our own healthier food sales for a number of years now – we believe it is key to more evidence-led policy and better-targeted health interventions.

“That’s why we have called for mandatory reporting for all supermarkets and major food businesses and why we welcome the government’s announcement on this.

“We look forward to working with them on the detail of the Healthy Food Standard and its implementation by all relevant food businesses.”

Simon Roberts, chief executive of Sainsbury’s, said: “We’re passionate about making good food joyful, accessible and affordable for everyone and have been championing the need for mandatory health reporting, across the food industry for many years.

“Today’s announcement from government is an important and positive step forward in helping the nation to eat well.

“We need a level playing field across the entirety of our food sector for these actions to have a real and lasting impact.”

Health Secretary Wes Streeting will be appearing on today’s Sunday Morning with Trevor Phillips show – watch on Sky News from 8.30am.

Scottish Power, the Spanish-owned energy supplier, and larger rival Ovo Energy have begun holding exploratory talks about a merger that would create a company serving more than six million British households.

Sky News has learnt that executives from Iberdrola, which owns Scottish Power, and Ovo have been engaged in preliminary discussions in recent weeks about the possibility of a deal.

The talks are at an early stage and any formal transaction would be months away, if it materialised at all.

If the two companies do agree a merger of their residential gas and electricity operations, it would create the third-largest supplier behind Centrica-owned British Gas and Octopus Energy.

As the larger company, with 4 million customers, Ovo would probably be the acquiring entity, but with Iberdrola potentially contributing cash and remaining as a shareholder in the enlarged group, according to one banking source.

Scottish Power serves about 2.4 million households.

The discussions between the two companies are running in parallel to a separate process through which Ovo is exploring the potential to raise roughly £300m from the sale of new shares in the company, according to industry sources.

In recent weeks, a number of financial investors have been contacted by Rothschild, the investment bank advising Ovo, about the opportunity.

Exactly a year ago, Sky News revealed that Ovo had hired Rothschild to explore options, including bringing in a new investor or a sale, 15 years after it launched in a bid to challenge the industry’s oligopoly.

Founded by Stephen Fitzpatrick, the entrepreneur who now owns London’s Kensington Roof Gardens, Ovo’s shareholders include the private equity firm Mayfair Equity Partners, Morgan Stanley Investment Management and Mitsubishi Corporation, the Japanese conglomerate.

Under Mr Fitzpatrick, who launched Ovo in 2009, the company positioned itself as a challenger brand offering superior service to the industry’s established players.

Ovo’s transformational moment came in 2020, when it bought the retail supply arm of SSE, transforming it overnight into one of Britain’s leading energy companies.

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Its growth has not been without difficulties, however, particularly in relation to its challenged relationship with Ofgem and a torrent of customer complaints about overcharging.

Justin King, the former J Sainsbury chief who now chairs Ovo, has made repairing its regulatory relationships a priority for the company.

He also oversaw the recruitment of David Buttress, who was briefly Boris Johnson’s cost-of-living tsar after leaving the top job at Just Eat, as its chief executive.

Key to Ovo’s longer-term valuation will be the performance of its technology platform, Kaluza, which was set up to license software to other energy suppliers and provides customers with smart electric vehicle charging and heat pumps.

Ovo announced last year that AGL Energy, one of Australia’s biggest energy suppliers, had bought a 20% stake in Kaluza at a $500m (£395m) valuation.

The British energy company has also entered the electric vehicle car charging sector under the brand Charge Anywhere, adding tens of thousands of public charging points across the UK.

Iberdrola bought Scottish Power in 2007 in a deal valuing the company at more than £11bn.

Next week, the UK’s energy price cap will fall by 7% to £1,720 a year, following an announcement by Ofgem, the industry regulator.

Ovo and Scottish Power both declined to comment.

Nike’s costs will go up $1bn (£728m) this year if US President Donald Trump’s tariffs remain at the current level, the company has told investors.

It follows a warning from the sports brand last month that it would raise prices due to the taxes imposed on imports.

Work to bring down costs is under way, including reducing supplies from China to the US.

It’s to reduce the amount of footwear made in China and imported to the US from 16% currently to a “high single digit” figure with Chinese supply being “reallocated to other countries around the world”.

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On 2 April, Mr Trump announced country-specific tariffs which hit China hardest and escalated after several rounds of retaliatory rises.

After an agreement between Washington and Beijing the levy was brought down from a 145% tariff to 30% on Chinese goods.

Price rises for consumers will start to come into effect in the autumn.

The latest warning on tariffs comes as Nike reported the worst quarterly results in more than three years.

Revenues were $11.1bn (£8.1bn) – the lowest since the third quarter of 2022.

It has been dealing with the after-effects of an unsuccessful move to sell direct-to-consumer with Wall Street analysts also critical of its dependence on lifestyle products and reliance on fashion trends.

Nike chief executive Elliott Hill had returned from retirement last year to again take the top job at the company.

The worst of the trade wars have already occurred, Mr Hill said, with “the headwinds to moderate from here”.