Earlier this week the British Medical Association (BMA) called for a 20% tax on sugary drinks to help address Britain’s obesity epidemic, suggesting that the proceeds could be spent on subsidising healthier foods such as fruit and vegetables. The Faculty of Public Health has backed this call and included the measure in its new 12-point plan for better public health.
Sugary drinks tax in the news
The tax was originally proposed in 2013 after research published in the British Medical Journal showed that a 20% sugary drinks tax could reduce consumption by 15%. Soft drinks taxes were the subject of a BBC Food Programme episode in 2010, following considerable interest in the idea across the United States, prompted by the ‘obesity tax’ proposed by Governor of New York David Patterson in 2008.
Since then, sugary drinks taxes and other health-related taxes on food and drinks have frequently been in the news. Much of the discussion in the media and in academic articles has revolved around uncertainty about whether fiscal measures actually work, as well as the lack of political support from governments, civil society and, of course, the food industry in implementing them.
Problems with taxes
Objections to these health-related taxes have included their ‘regressive’ nature: the likelihood that they would disproportionately affect lower-income groups who spend a larger proportion of their income on food and tend to eat and drink more ‘unhealthy’ (taxable) foods. Another concern has been the ‘substitution’ effect: that people would switch from a taxed product to untaxed (and equally unhealthy) products. Finally, critics have claimed that taxation would have little impact on overall levels of obesity and is too blunt a tool for stimulating behaviour change (and would therefore needlessly affect ‘healthy’ people who occasionally enjoyed sugary drinks and sweet foods).
Until recently, the main problem with these tax proposals – such as a tax on saturated fat or sugary drinks – was that there was no actual evidence for their positive impact: there were only models and estimates. Now, thanks to efforts in a number of countries that have recently pioneered health-related food and drinks taxes (in Finland, France, Hungary and Mexico, as well as the city of Berkeley in California), we finally have some figures to back up the theory.
Mexico’s successful sugary drinks tax
In 2013 Mexico introduced a sugary drinks tax of approximately 10% on non-dairy and non-alcoholic beverages with added sugar. Subsequently, an analysis of the purchasing behaviour of around 50,000 Mexicans showed an average 6% drop in purchases of taxed drinks throughout the year and a 12% drop in December 2014, 12 months after the new tax was implemented. This data provides the first solid evidence that a relatively small tax on sugary drinks can have an important impact on consumer behaviour, and therefore is likely to improve rates of obesity, diabetes and other diet-related illnesses.
Significantly, the greatest drop in the Mexican’s consumption was among lower-income households, which tend to have poorer diets and therefore the greatest burden of diet-related illness. This might help to dispel doubts about the regressive impact of a sugary drinks tax, and highlights the fact that lower-income groups have the most to gain from an improvement in their diet.
In Britain, we are faced with an obesity epidemic and the rapid rise of diet-related illnesses that are estimated to cost the government half the entire NHS budget by 2050. In this situation, all policy options must be explored. Given the reluctance of successive governments to tackle the obesity epidemic head on and implement much-needed regulations (including fiscal measures) the sugary drinks tax proposals by the BMA and others should be welcomed.
And yet, taxes on sugary drinks alone will not overcome the obesity epidemic. They will certainly help change consumer behaviour, but they will not address the underlying problem of an industrial food system that continues to produce ever-cheaper food at the expense of human and environmental health. How can we expose the true cost of sugar to our society?
Environmental and social impacts of sugar
Annual global sugar production reached 180 million tonnes in 2012 – that’s 26 kilos per person per year – and currently takes up 30 million hectares across 120 countries. The price of sugar has also been declining in recent years, currently costing $0.274 per kilo. This worldwide addiction to cheap sugar raises questions about how it is produced as well as its effects on human health. The recent work of the Food Research Collaboration (‘Does sugar pass the social and environmental test?’) highlights the product’s wide-ranging negative impacts in terms of land use, pollution, water, processing and labour. The authors recommend that public health discussions include both the problems of excessive sugar consumption and the need to find less environmentally damaging sources for it. They suggest that civil society and academics produce a plan for the phased reduction of sugar production combined with incentives for consumers to ‘de-sweeten’ their diet. Ultimately, however, they fail to offer tangible, practical solutions that will really challenge the vast scale of our sugar dependency.
The true cost of sugar
Perhaps if the true cost of sugar – that is, the real environmental and social costs of its production – was included in the price of a fizzy drink consumption rates would decline. Indeed, all processed foods and drinks that contain sugar would become less popular, thereby having a much more far-reaching impact on obesity and other diet-related illnesses than a simple sugar tax. Companies would be incentivised by the increased cost of sugar to reformulate and ‘de-sweeten’ their products. By correcting the price distortions in our economic system we could create a market that favours healthier, more sustainable food and a society that no longer faces an obesity time bomb.
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