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Other countries taking up the mantle of the sugar tax

Jul 6 2018

Other countries taking up the mantle of the sugar tax

The UK took a major step in tackling obesity by introducing a sugar tax in April 2018. Formally known as the Soft Drinks Industry Levy, the sugar tax targets businesses that produce, package or transport soft drinks with added sugar in the UK, by asking them to register and pay a levy.

In doing so, some of the biggest products, such as Old Jamaica Ginger Beer, which contains 15.7g of sugar per 100ml, will be forced to reduce the amount of sugar in their drinks or pay up.

It’s worth noting that the opposition to sugar is a fairly recent development. 10 years ago we were being warned of the dangers of fat, specifically saturated fat, however sugar appears to be the new enemy. I think it’s excellent that the government is working to tackle obesity and type 2 diabetes in Britain, and I’m encouraged to see other countries taking up the mantle of the sugar tax.

Which countries have a sugar tax?

In 2017, the UAE, Portugal and Sri Lanka all introduced taxes on sugary drinks, with the UK, Ireland and South Africa following suit this year. Perhaps unsurprisingly, some parts of the US have rejected the idea. According to Beverage Daily, sales of carbonated soft drinks in the US have been on the decline for some time, and so-called ‘soda taxes’ are currently enforced in the cities of Boulder, Albany, Berkeley, Oakland, San Francisco, the Navajo Nation and Philadelphia, with Seattle joining the group in January 2018. However Santa Fe and Cook County both recently rejected the tax.

Large drinks companies have also rallied against the introduction of sugar taxes, with Coca Cola’s North America president Sandy Douglas reportedly telling delegates at a conference that the Philadelphia sugary drinks levy had been ‘a complete disaster’ which resulted in job losses and ‘materially reduced our business’, according to Beverage Daily.

Mexico, on the other hand, successfully introduced a soda tax in 2014, and analysis by Health Affairs in March 2017 revealed that there was a 5.5% drop in sugary drinks purchases the first year after the tax was introduced and a 9.7% decline in the second.

Canada, Australia, New Zealand, Saudi Arabia, Singapore, Sri Lanka, Thailand, the Philippines and Vietnam are all said to be introducing some form of sugar tax in the very near future.

Consumer reaction

Since its introduction in the UK, the sugar tax hasn’t received the most positive response from all consumers. While many feel it is essential in order to tackle obesity and type 2 diabetes in Britain, others are simply upset that the tax has ‘ruined’ their favourite drinks.

A recent report in The Metro revealed that a Parliamentary petition has been launched to repeal the sugar tax, reading: “For some, the full sugar version of a drink not only tastes superior, it has beneficial effects, especially for people with a sensitivity to (said) artificial sweeteners. A key example is the halving of sugar in Lucozade (a recommended drink for people with diabetes to combat hypoglycaemic events). This wasn’t announced in enough time for diabetic nurses to alter their recommendations. All the tax is doing is punishing adult consumers. Why should we suffer this draconian approach to obesity?”

Another argument, made on a separate petition via Change.org, reads: “The sugar tax is also aimed at low to poverty line individuals reducing their ability to buy said items and making it less available to them, taxing the poor for a small quarter of a percentage point to Consumer Price Index growth in 2018 to 2019. Is building the country growth on the backs of the poor what you want?”

It’s important to remember that the tax is still in its early stages, and that many of these issues will be solved over time. For now, the more businesses that comply with the regulations and actually cut down their sugar content, the better.

What’s next for the UK?

It’s rumoured that the government is discussing a potential sugar tax on chocolate and sweets. Campaign group Action on Sugar is said to be pressuring the government to expand the current sugar tax to impose a 20% levy on chocolate and sweets. And, according to recent analysis, this form of tax could be more effective in the fight against obesity and diabetes. A study by Oxford and Cambridge Universities and the London School of Hygiene and Tropical Medicine predicts that adding a 10% levy on confectionery, cakes and biscuits could lead to a 75% drop in purchases.

Interestingly, the study revealed that taxing sweet snacks could have a knock-on effect, resulting in consumers buying less soft drinks and savoury snacks, too. Co-author Professor Susan Jebb, from the University of Oxford, told The Telegraph: “It’s impossible to study the direct effects of a tax on snack food on consumer behaviour until such policies are introduced, but these estimates show the likely impact of changes in the price.

“These snacks are high in sugar but often high in fat too, and very energy-dense, so their consumption can increase the risk of obesity. This research suggests that extending fiscal policies to include sweet snacks could be an important boost to public health, by reducing purchasing and hence consumption of these foods.”

I’m eager to see how the sugar tax will play out here in the UK and overseas, and hope that it will urge many businesses to reduce the amount of sugar they use in their products. I’m also excited to see how creative companies can be when inventing new low-sugar or no-sugar alternatives.