Monday, April 18, 2016

Taxing times ahead as sugar falls from favour

The UK’s latest budget brought down by the chancellor, George Osborne, last month contained a surprise proposal to tax soft drinks containing added sugar.
It was a tough budget and this proposal did nothing to promote Osborne's popularity. So why did he and the government decide to take such steps?
The move comes a year after the WHO released an update of its recommendations on sugar intake for adults and children.1
It says both should reduce their intake of free sugars by roughly half to less than 10% of their daily calories.
But to accrue the most health benefits, the guidance adds, this figure should actually be as low as 5%. That's the equivalent of just 25g, or six teaspoons, a day.
The reason soft drinks have become the focus of this is because they contain heaps of sugar. A 355mL can of cola has about 30g or seven teaspoons of sugar.
Furthermore, the UK's consumption of sugar is high compared with other developed nations.
According to an article in British newspaper the Independent, the average person in the UK receives around 16-17% of their calories from sugar, compared with 11-15% in the US and 7-8% in Hungary and Norway.
The UK's proposed levy will see soft drinks containing more than 5g of sugar per 100 mL taxed at a rate of 18 pence (GBP) a litre and those containing over 8g taxed at 24 pence (GBP) a litre.2 The proposals are due to come into force in 2017/18 and the funds used to support sport for children.
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Critics point out that many drinks other than soda contain lots of sugar; fruit juice and flavoured milk to name two. But despite what the critics say, sugar taxes — although not perfect — do work.
Several systematic reviews of the evidence (both modelled and real life) have shown that taxing sugary drinks reduces their purchase and consumption.
Hungary and Norway both tax sugary drinks, as do France, Chile and Mexico, which is the country best known for implementing the public health move.
Mexico implemented its soda tax in 2014, and after just 12 months saw a 12% reduction in purchases of these drinks, with the largest declines among low socio-economic households.
This coincided with a 4% increase in the purchase of untaxed drinks, mainly bottled water.3
Soda companies argue that these taxes are regressive, hitting the poor and vulnerable the hardest. But if the less well-off save their money by buying less fizz, they may switch to fruit juice and flavoured milk — which, unlike fizz, have nutritional value — or spend a little more on food.
‘Big Soda' is prepared to fight hard to stop such taxes, as the residents of Berkeley, California, discovered two years ago when it first announced plans to introduce such a tax.
The beverage industry spent US$2.4 million trying to stop the city from passing legislation on the issue. However, despite its efforts, the tax did come into force in November 2014.
This should act as a warning to the UK Government should prepare for a long battle, rather like the one waged in Australia over plain packaging of tobacco.
And what about Australia? Should we follow suit on taxing soft drinks?
Well, the writing should already be on the wall if you look at our collective consumption of sugar.
Australia ranks 11th in the international league chart of per capita sugary drink consumption, according to Euromonitor International.
Two-thirds of the Australian population are overweight or obese, and in the 2011/12 Australian Health Survey, more than half of Australians exceeded the WHO recommendations for added sugar, with sugary drinks the main culprit (21.4%).4
The Australian Obesity Policy Coalition, which has a focus on law reform to prevent obesity, says 85% of Australians would support a tax on sugary drinks if the revenue were used to support childhood obesity programs.
Given the international evidence of effectiveness, the Coalition has called on the government to add a levy of 20% to fizz.
It will be interesting to see whether, in light of the UK's move, Australia will follow suit.


Professor Leeder is professor of public health and community medicine at the Menzies Centre for Health Policy and School of Public Health, University of Sydney.
Ms Downs is an Earth Institute post-doctoral fellow in nutrition policy and an affiliate of the Menzies Centre for Health Policy.

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