Tax on sugary soft drinks could be a bitter but beneficial pill

sugar tax, the venture magazineA year ago, the UK began charging a “sugar tax” on soft drinks, with the aim of forcing beverage makers to cut their sugar content or pay a price for it in the hopes of lowering obesity rates. The UK joined Mexico, France, and Norway among nearly 30 countries that have implemented a tax. The tax does exempt fruit juices and milk with no added sugar. Studies indicate that such taxes have some, but perhaps not as much as hoped, effect on sales of sugary soft drinks.

With obesity a concern in Australia, the idea of a sugar tax has been bandied about. The Australian Institute of Health and Welfare’s 2018 health report found that 63 per cent of Australians were overweight or obese in 2014-15. Among adults, 28 per cent were obese, and a quarter of children ages 2-17 were overweight or obese. Given such figures, many measures have been proposed to combat obesity, with a sugar tax being among the more talked-about ideas.

Popular Support for a Sugar Tax

A January 2018 poll by The Guardian of 1,038 Australians found that 53 per cent favoured a sugar tax, with 38 per cent opposed, and the rest undecided. Support was 54 per cent among self-identified Labor voters, 57 among Coalition voters, and 60 among Greens supporters. A Deakin University study of 1,793 Geelong residents aged 18-30 found that 48 per cent supported a tax of 40 cents per 100 grams of sugar in soft drinks. More than half said they would buy fewer sugary soft drinks if a tax were imposed, drinking more water. Interestingly, approval went up to 74 per cent if the tax money were to go toward fruit and vegetable subsidies and 72 per cent if the revenue funded community exercise facilities.

“This study is an important step in showing government and policy makers that there is strong public support for a tax on sugary drinks, particularly by young Australians who would be impacted the most,” co-lead researcher on the study Tom Richardson said. “The likelihood of supporting a tax did not differ with gender, weight, or socioeconomic status and neither did anticipated consumption, suggesting that these opinions are relatively consistent among young Australians.”

Richardson’s colleague and co-lead researcher Brendan Yanada did add some caveats. People who consume fewer sugary drinks already were more likely to support a tax than those who regularly drink them. Regular drinkers also said a tax would not have much impact on their consumption.

“This suggests that one intervention alone will never be a silver bullet solution and additional public health interventions would likely need to accompany the introduction of a sugar tax,” he said. “However, we did find that a sugar tax would not only offer a financial incentive for young people to make healthy choices, but also act as a health promotion tool to change the public’s perception of the healthiness of sugary drink consumption.”

Risks and Alternate Proposals

sugar tax, the venture magazineNot all sugary drinks are created equal, it turns out. A comparison published in the Medical Journal of Australia in 2017 showed that popular Aussie soft drinks contained 22 per cent more glucose than their American counterparts. Nearly 40 per cent of men and 30 per cent of women regular drink sugary soft drinks, which are the leading source of sugar in the national diet. Nearly half of children consume at least one sugar-sweetened beverage daily.

“Given that glucose, but not fructose, rapidly elevates plasma glucose and insulin, regular consumption of Australian soft drinks has potential health implications regarding type 2 diabetes and its complications,” Prof. Bronwyn Kingwell of the Baker Heart and Diabetes Institute told the ABC.

In response to concerns over such figures, the Australian Beverages Council pledged in June 2018 to cut its sugar use by 20 per cent by 2025. “As a country, we can help tackle the obesity epidemic through the practice of industry, through participation, and with the support of government,” Health Minister Greg Hunt announced. “If you can work with the industry and get an outcome such as this, you get exactly the outcome we all want: healthier products, healthier children, and healthier adults.”

Critics of the pledge point out that the 20 per cent reduction is an average across all products made by council members, meaning that they could simply release a new sugar-free beverage line to lower the average without reducing the sugar content in existing drinks.

Opposing Sides

Needless to say, the beverages council and its members aren’t exactly keen on their products being harder for consumers to buy. “There is no discernible evidence from anywhere in the world that such a tax has any impact on public health. It continues to be a minority Greens policy,” council CEO Geoff Parker said when the 20 per cent reduction was announced. “Consumers and households don’t want governments in their shopping trolley, they don’t want governments poking around in their fridges, and they certainly don’t want governments in their pantries.”

The Australian Medical Association (AMA) is in favour of a sugar tax and also wants more specific food labelling to distinguish added sugars from naturally occurring sugars.

“This is an attempt to try and perhaps muddy the waters in terms of creating a … diversion from the real issue,” AMA president Dr. Tony Bartone said. “A sugar tax will address this problem of trying to reduce the consumption, which is at the heart of the problem.”

Bartone said artificial sweeteners won’t fix the problem. “Diet soft drinks actually create more instability when it comes to hunger and appetite management, and in terms of an average daily intake of appropriate amounts of food,” he said. They “actually have a number of unintended health effects, including on your teeth, so it’s important we try to use water as our default beverage, rather than turning to pseudo-sweetened beverages.”

The Rethink Sugary Drink campaign has been posting photos and running adverts featuring decaying teeth to try to dissuade kids from overindulging.

“We know young Australians are hooked on sugary drinks. Males aged 12-24 are the biggest consumers of sugary drinks, with some consuming as much as 1.5 litres of soft drinks, sports drinks, or energy drinks a day,” Cancer Council Victoria head of prevention Craig Sinclair said in a public statement. “These drinks don’t just ruin your smile. In the long run, the high levels of sugar they contain can also lead to unhealthy weight gain, which increases the risk of serious health problems, such as type 2 diabetes, heart and kidney disease, stroke, and 13 types of cancer.”

Will It Actually Happen?

sugar tax, the venture magazineA University of Melbourne Centre for Health Policy study released in 2017 found that taxing foods high in sugar, salt, and saturated fats and using the money to subsidise fruits and vegetables would save more than $3 billion annually in healthcare costs. A sugar tax by itself would add 1.2 years of healthy living per 100 Australians, while across the board taxation and subsidisation would add 2.1 years of healthy living per 100 Australians.

A study by the Obesity Policy Coalition found that a 20 per cent tax on sugary soft drinks could result in a 2.7 per cent obesity decline in men and a 1.2 per cent drop in obesity among women. Over 25 years, it would lead to 16,000 fewer cases of type 2 diabetes, 4,400 fewer cases of heart disease, and 1,100 fewer cases of stroke with 1,606 people still living who otherwise wouldn’t be.

Despite this, Greens are the only major political party in support of a sugar tax. Hunt, the Liberal health minister has said, “That’s not something we’ve supported. I know there are others that take that approach, whether it’s in other countries, who advocate for it here, but we don’t want to see the price of groceries go up; we want to see the cost of living continue to have downwards pressure on it.”

Labor is not pushing for the tax, either. “We don’t have a plan for a sugar tax at the moment,” deputy leader Tanya Plibersek has said.

“Labor believes obesity is a critical public health problem. To fix it, we certainly have to address how Australians eat,” Labor health spokeswoman Catherine King said last year. “But we have no plans to introduce a sugar tax. A sugar tax is only one of many possible ways to tackle this problem.”

So, it doesn’t seem as though a sugar tax is coming to Australia soon. But with the adult obesity rate projected to hit 35 per cent — with another 45 per cent overweight — by 2025, it might just be a matter of time.