The British Nutrition Foundation (BNF), long criticised for its financial links with the sugar industry and food industry generally, recently hosted a symposium: “Food taxes – what role might they have in the battle against obesity?” Chaired by Professor Judith Buttriss, BNF Director General, the afternoon served as a platform for discussion on the issue of food and beverage taxation.

Using taxation to discourage unhealthy eating and drive improvements in public health has potential as a form of true cost accounting. Denmark imposed a tax on fats in food in 2011, while Mexico introduced a soda tax in 2013. New York has toyed with a size limit on servings of sugary drinks, and in the UK, a tax on sugar rich foods has been proposed, which could then subsidise the production of fruit and vegetables, as a means of making high quality foods more accessible to all.

To date though, such initiatives have had only limited success. Former New York Mayor Michael Bloomberg’s proposed ban on the sale of 16-ounce sugary beverages in restaurants and other public facilities was twice voted against, before returning to appeal. However, taxing fat and sugar rich foods is still seen as a potentially useful tool, by many campaign groups in the UK, in the battle to combat obesity. Interest in the UK stems from an increasingly familiar set of statistics on the increase: currently a quarter of the UK’s population is obese and nearly a third of children are overweight and at risk of obesity in coming years.

It is widely recognised that the challenges associated with obesity and chronic disease prevention are complex. No one is proposing that a fat or sugar tax is an adequate substitute for increased physical activity or a balanced diet. Gaining similar attention to the tax issue is the idea of reformulations of the food supply, i.e. the eradication of trans-fats, or the provision of greater market choice, such as a greater range of  ‘healthy foods’ in their various guises. Both hold the potential to leave customers with healthier options in their baskets. But standing alone, the symposium asked, how robust is a fat tax and what are its limitations?

The recent work of Professor Richard Tiffin, Director of the Centre for Food Security at the University of Reading, has explored the role of a fat tax in reducing obesity in the UK. He is currently modelling the distributional impacts of such a tax using a hypothetical tax scenario. He raised food prices by 1% for every percentage of fat, with a cap at 15%. To make the policy fiscally neutral, and as effective as possible, fruit and vegetables were subsidised by 27% (when the price of high fat foods was raised, the prices of fruit and veg were lowered by the same amount). Using econometric models, he speculated that the average levels of relative risk in the population would reduce only marginally – by around 1%. Putting it frankly he said, “these policies may save some lives but will make no dent in the obesity epidemic.”

Professor Tiffin also highlighted the undesirable effect of not making a distinction between naturally occurring fats, as part of natural foods, compared with fat in processed food. Taxing both may lead to a reduction in consumer’s intake of vitamin B, D12 and E alongside other nutrients from animal proteins. The fact that naturally occurring fats offer essential nutrients to our diets, has partly led to the recent popular opinion that we’re going after the wrong thing. Sugar, especially in sugar-sweetened beverages (SSBs), is now boasted as the new Achilles’ heel of obesity.

According to Professor Tiffin, a 20% tax on soft drinks could reduce adult obesity by 1.3%. But he warned that this may in fact be inaccurate because the taste we have for high sugar and fat foods suggests that if one type is taxed, we will simply sate the craving elsewhere, i.e. move from soft drinks, to chocolate or crisps. Doctor Hannah Timpson, another of the speakers, looked at the attitudes of consumers most likely to be affected by a tax on SSBs. Interestingly, many of the participants in her study felt that a 20% price increase on sugary drinks would not be high enough to impact their decision-making, and that the huge price difference between branded and supermarket varieties would make downgrading the obvious first step before cutting out SSBs altogether.

It was equally evident in Professor Tiffin’s model that blanket taxes on fats and sugars could be regressive. A tax on all fatty foods would mean that the price rise would have a greater effect on those with less money. This proved to be the case in Denmark with the Copenhagen Post writing that its fat tax had ‘become an unbearable burden, hitting the poorest the hardest’. Denmark’s tax on saturated fat was hailed as a world-leading public health policy when applied in 2011 on foods above 2.3%. It was abandoned fifteen months later, when voted out with 90% margin.

The research of Christopher Snowdon, director of Lifestyle Economics at the Institute of Economic Affairs, focuses on lifestyle freedoms and prohibitions. His reflection on the Danish experience largely echoed Tiffin’s speculations – the tax was seen to have done little to change eating habits or improve health.

It was the unintended consequences of the fat tax that led some to feel that it was leading Denmark from the frying pan and into the fire. Firstly, it was blamed for contributing to a rise in inflation to 4.7%, during a year in which real wages fell by 0.8 %. Secondly, it was noted that retailers used the tax as an excuse to increase the price of products. Research showed that discount stores raised their prices more than the supermarkets when the tax was introduced. People also automatically turned to the discount stores despite this, demonstrating that people were ready to downgrade from brand products as a first response. After a period of hoarding, most Danes did simply switch to cheaper brands or shop over the border. Ultimately it was found that only 7% of the population reduced their fat intake.

In addition, Snowdon stated that at least 10% of fat tax revenues were swallowed up in bureaucracy and administrative costs. Measuring the final fat content of all products, including imports, was no small feat and was just one of the tax’s burdens on the food industry and its importers, producers and retailers.

In short, the fat tax led the Danish to change behaviour but not in the way it had been hoped. If such a tax were to be implemented again, it was proposed that a better understanding of how consumers change patterns of consumption across their whole diet, due to taxes, would be needed.

Despite the breadth of speakers – from industry to economists to healthcare professionals – the heart of the issue really seemed to be why people eat unhealthily in the first place? How do people arrive at their food choices? Why do they keep on eating foods that they generally known to be bad for them? Economics, psychology, biology and anthropology all then entered the equation. Food culture clearly also plays a role. In a survey, many Parisians stated that they knew they were full when the food stopped tasting good, while interviewees in Chicago said they were finished with their meal when the TV show was over (Wansink et al: 2009). The amount of food that people perceive to make up a meal also impacts the quantity purchased; it is not always explained by price.

The attendees highlighted the need to have a better understanding of why choices are made before turning to policy and legislation. More sophisticated ways of segmenting people, and the way that they make their food choices, are needed in order to identify what appropriate measures might be best for different segments of the population. The conclusion was made that one size does not fit all.

The consensus was that health-related taxes on fat, sugar, ‘junk food’ and SSB’s may deter some, but ultimately the complex issue of how to tackle obesity and public health crucially needs a broad range of initiatives that are implemented through multiple stakeholders. While it is undoubtedly true that food taxes, on their own will not reduce the nation’s expanding waistline, this event included no speakers from the NGOs campaigning for such taxes and some were left wondering whether it wasn’t just a little too much of a coincidence that the overall conclusions reflected the food industry’s position so closely?

Feature image by Tim Bayman

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