In the face of a July 2015 outcry by physicians and The British Medical Association (BMA) calling for a 20 percent tax on sugary drinks, the government appears to be between a rock and a hard place. Ministers are receiving major pressure because they have resisted the Sugar Tax. So, why are they resisting when even the Commons’ Health Committee has stated that the evidence is indeed compelling regarding a reduction in sugar consumption based upon taxation?
UK Food Production Industry Fights Back
The problem is that representatives of the food production industry are also pressuring them on the other side of the issue, saying that the tax would not be fair to consumers. But, since the BMA is suggesting that one third of the population in the UK will be suffering from obesity by the year 2030 without a major change in dietary standards, is the Sugar Tax a genuine possibility and, more importantly, will it work?
Sugar Tax History
History shows that other countries have tried imposing a Sugar Tax with varying degrees of success. France introduced a soft drink tax in 2012,
increasing the prices by approximately 3.5%. Norway imposed a refined sugar tax, as well, at 7.05 kroner on a kilogram. Denmark imposed a tax on soft drinks all the way back in 1930, but then announced that it would be abolishing it in 2013. Mexico first proposed their sugar tax in September 2013. At that time, the president proposed a 10 percent per litre tax on soft drinks. Mexico actually has the highest obesity rate in the world, by the way. After some back and forth in-fighting that reached as far as New York and included criticism of Mayor Bloomberg, paired with numerous news articles about the issue, it was decided. A $1 MXN, which is approximately 0.08 USD, tax on every litre of soda was approved by the Mexican Senate. In addition, they also approved a five percent tax on all junk food.
Did it Work?
The fact about Mexico is that their diets basically always include soda. Whether you go to a taco stand or a fine restaurant, just about everything is served with a fizzy and, yes, sugary drink. So, did the Sugar Tax slow soda drinkers down at all, or was it a waste of time? Did it put a dent in the obesity epidemic or not?
The Sugar Tax in Mexico amounts to approximately ten percent of the cost of a soda and essentially it made Mexico sort of an international guinea pig. But, now, the Mexican soda tax data, albeit still preliminary, has been reviewed by U.S. health researchers. Their findings show that the tax has brought about a decrease in sales of sweetened soft drinks, especially among the poorest consumers countrywide, many of whom are children.
So, in spite of the fact that it’s uncertain what the long-term effects of the Sugar Tax may be, the bottom line is that medical experts and soda tax advocates alike feel that it’s working and could eventually be proposed in the U.S. as well. In fact, according to the American Heart Association, The University of North Carolina and The National Health Institute, the Mexican soda tax experiment brought about a six percent annual decrease in soft drink consumption. And, the sharpest decrease was, of course, among very poor households. These results seem to be suggesting that Mexican consumers are at least thinking before drinking.
More recently, according to the New York Times, between December 2013 and December 2014, sugary Mexican soda sales decreased by 12 percent over the same period the previous year. Their statistics also show that soda drinking in poor households had actually been decreased by 17 percent. Mexican public health authorities were responsible for providing those particular figures.
Meanwhile, numerous researchers now believe that an 18 percent tax could successfully decrease sugar intake daily by as much as 56 calories for each person. That decrease could very well result in five pounds, or two kg, of lost weight a year per person. So, although the jury is still out on the Sugar Tax in some countries, it definitely seems to have worked in Mexico and probably could do the same for the UK and the U.S.
Well know UK celebrity chef Jamie Oliver seems to think it would make a difference and is heading the fight straight into downing street. The TV chef
looked into the impact of sugar in children’s diets in his Channel 4 documentary in August 2015. He then made a six point plan which he presented to David Cameron. His recommendations included a 7p tax on all soda drinks along with compulsory labelling of products to show the the number of teaspoons of sugar within food and drink, forcing manufacturers to provide healthier options. Jamie added “It is absolutely clear that the time for dithering about the future health of our nation is long gone.” Jamie also created a petition to “Introduce a tax on sugary drinks in the UK to improve our children’s health” which you can sign here.
— MyKeyManInsurance (@MyKeyFinance) December 2, 2015
Jody is the Managing Director and founder of My Key Finance Ltd. He has over 16 years experience as a protection adviser and is an authority within the UK business protection market. Jody has written articles for Business Matters Business Directory, and been featured in Forbes. As editor and Author of our blog Jody is hoping to educate and advise people with more in depth details and information on the various subject relating to the protection market.