Sugar industry’s fight against tax takes tips from tobacco’s playbook – an opinion piece by steering group member Victoria Mulligan

3 Dec, 2018 | Media Release

The debate over whether a sugar tax would effectively combat New Zealand’s obesity problem is back in the spotlight.

Today’s supermarket foods contain increasing levels of added sugar and fat, but the major culprits are sugary drinks, known as sugar sweetened beverages (SSBs).

At the FIZZ Symposium in Auckland, Big Beverage chief Geoff Parker told delegates that sugar taxes were ineffective. Taking a line from the corporate lobbying playbook, Mr Parker tried to cast doubt on the evidence base for a sugar tax and instead promoted self-regulation and personal responsibility.

The corporate lobbying around this issue is, according to Helen Clark “reminiscent of the way the tobacco industry fought tax and regulation”.

Coca Cola has taken out large ads promising that they are listening to consumers and reducing sugar. Their urgency in front-footing this issue suggests that the companies peddling sugar are rattled, and well they should be.

2018 has seen more sugar taxes introduced around the world, as well as early signs that such taxes can be effective in reducing purchase and consumption. By mid-2018, 39 countries and eight US jurisdictions had implemented such a tax. Recent polls suggest that New Zealanders are overwhelmingly in support of a sugar tax if the revenue contributes to prevention programmes.

Sugary drinks are a particularly good target for a tax, given their lack of nutritional value and large contribution of sugar to the diets globally
New Zealanders are right to support the tax; we are the third-fattest country in the developed world, and getting fatter. Obesity causes heart disease, type 2 diabetes, and cancer, but you can reduce these diseases by changing people’s diets. If you don’t, then health care expenditure, reduced workforce capacity and environmental burdens will continue to increase.

There is no magic bullet but the World Health Organisation and every other authoritative health group has called for a health levy on SSBs as the first, cost-effective strategy.

Sugary drinks are a particularly good target for a tax, given their lack of nutritional value and large contribution of sugar to the diets globally, particularly children (for whom where SSBs are the top calorie source of sugar). A recent study confirmed that sweetened drinks pose a greater risk of type 2 diabetes than most foods containing fructose, a naturally occurring sugar.

The negative health impacts is exacerbated by sugary drinks being cheap, accessible and aggressively marketed.

Industry players say there is no evidence taxes work. In a sense they’re right: there’s no evidence because in many places the taxes have only just arrived so studies following their impact haven’t yet been published. Nonetheless, we are already seeing positive results.

Public Health England this year reported that sugar content subject to all tax in the UK had been reduced by 11 per cent 2015-17 (their tax was announced in 2016) and energy consumed in a single occasion reduced by 6 per cent.

Last week the World Obesity Federation published a dossier of evidence on SSBs suggesting that an increase in price of sugar-sweetened beverages is indeed associated with a decrease in consumption; and that the higher the price increase, the greater the reduction in consumption.

Included in this analysis are studies from Berkeley, California, the first jurisdiction to pass a sugar-sweetened beverage excise tax for public health purposes. The impact of the tax in low-income neighbourhoods in Berkeley was significant, with a 21 per cent decline in consumption of SSBs over a one-year period from pre-tax to post-tax while it increased by 4 per cent in the comparison cities (interestingly water consumption in the area jumped by 63 per cent).

In 2011, Hungary introduced a Public Health Product Tax. Sales fell by approximately 27 per cent, consumption of SSBs decreased by 12 per cent among people with higher education, 20 per cent for people with secondary education, and 25 per cent for people with primary education. The consumption of SSBs decreased by 8 per cent for underweight or normal weight people and by 11 per cent for overweight and obese people.

The evidence will continue to mount.

A common criticism of a sugar tax is that it is a regressive tax: that it will have an inequitable impact on people with lower incomes who spend a higher proportion of their income on food and beverages. If only there was so much concern for the poor when companies were peddling these drinks – there are major ethnic and socio-economic disparities in the prevalence of obesity and related complications.

Maori and Pacific people develop diabetes 10 to 20 years earlier than Europeans, and experience worse outcomes. These groups are also more likely to be heavy consumers of sugar-sweetened beverages.

But critiques around regressiveness also fail to recognise the health benefits of the tax. Poorer households are more price sensitive and therefore more likely to substantially reduce their consumption after a tax, and be disproportionately benefited. If it works for tobacco, it will work for sugar.

The New Zealand Government has been slow to get interested in such a tax, instead encouraging industry to self-police while promoting lifestyle changes. But this approach has been ineffective. Last month the newly formed Health Coalition Aotearoa (I’m on the steering group of this organisation) comprising 82 academic leaders and health organisations launched with a suggested 20 per cent health levy on sugary drinks.

This follows an Open Letter to Cabinet in 2016 where 74 health experts called for a sugary drinks tax, arguing that evidence supporting sugary drink taxes is stronger than evidence for any of the 22 strategies in the Government’s childhood obesity action plan.

The WHO, health experts, and a majority of the New Zealand public support a substantial health levy on sugary drinks with the funding contributing to prevention programmes. We should continue to take advice on how this tax would best work, but we shouldn’t take this advice from the industry, whose only goal is to make more money out of sugar.

Like New Zealand, the UK had a long period of doubts and reticence towards a taxing sugar until the dire obesity rates and related diseases were just too overwhelming to ignore. We can follow their lead now or later, but it will happen. Big Beverage is right to be rattled.

Victoria Mulligan works at the Fred Hollows Foundation, specialising in the prevention of non-communicable diseases.This story was originally posted on here.

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