First, it ignores the reality of what most parents try to do. Basically, we live in a meal to meal negotiation over the proportion of healthy and unhealthy food children eat. We use the prospect of a special treat to get children to more of the healthy stuff. However, to make that deal work in our favour, the more they like (or think they will like) the unhealthy stuff, the more vegetables we can get into them.
In that world, if advertising and promotional characters makes children think they will like the unhealthy stuff more, the greater is a parent's ability to get them to eat healthy stuff first. Give me pure puffy advertising and a Shrek label any day. If having a green character on a chocolate bar means that they will be as happy with a 30 gram treat than with a 60 gram one then so much the better. Shrek is my friend in my quest to market unhealthy goods to my children. Put simply, you want treats to have a good taste, good memory and yet not have much of it eaten. Banning this stuff will only make our job harder. [The same is true for toys in Happy Meals].
Second, Shrek doesn't come for free. Food makers have to pay for it. They expect greater sales but those sales are only valuable if they come at a reasonable price. What promotional characters and their expensive rights do is push up the costs to food makers. And what does that do, it pushes up prices. High price means fewer sales. Fewer sales means less junk food in children's mouths.
Ban this stuff and food makers have to compete on price. Prices plummet and sales go up. Straight into the mouths of babes. On this logic, the better place to look to ban cool characters is on the healthy foods just to keep them affordable for parents.
Put simply, Shrek isn't the problem but part of the solution. The problem is instead the lack of other stuff on food packaging; most notably, good nutritional information. We need a standard -- a single number -- that indicates how appropriate a food item is for children. Yes, it is imperfect, but it is the information parents need to ensure they feed their children the right stuff. Politicians concerned about childhood obesity need to empower parents rather than disarm food makers and advertisers.