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Pros and Cons of the Sugar Tax

A Sugar Tax: What are the pros and cons for the health of the nation?
Introduction
Two thirds of the UK population were classified as overweight or obese in 2015(1), and even ten years ago, the obesity pandemic was believed to be costing the NHS more than £5 billion per annum(2). The NHS are strained in attempting to cover the costs to treat obesity related morbidities(3). For example, an ‘epidemic in type 2 diabetes’ has developed(4)mirroring the rapid increase in BMI and obesity is an independent risk factor for coronary heart disease(5) which is the most common cause of death in UK males in 2015(6).  This essay will consider whether the implication of a sugar tax in the UK could reduce these extreme figures and evaluate the advantages and disadvantages of the new tariff.

Reason for weight gain
Changes in weight are affected by the amount of energy expended versus the amount of energy consumed(7). Therefore, in principle, to cause weight loss either more energy should by expended in doing physical activity or calorie intake should be restricted. However, a meta-analysis of weight loss interventions determined that ‘the rate of weight loss was only 0.02kg more after physical activity and caloric restriction than caloric restriction alone’(8). This considered, one could argue that diet control would be the more important factor in controlling weight gain. Evidence for this can be seen in rationing of meat, eggs and sugar in the second world war(9), in which consumption dropped. Very few of the population were malnourished(10) and the BMI was much lower than it is currently, as demonstrated by figure 1.

Figure 1- Graph produced from sources:

  1. Davey RC

The obesity epidemic: too much food for thought?
British Journal of Sports Medicine 2004;38:360-363

  1. Health and Social Care Information Centre

Statistics on Obesity, Physical Activity and Diet
April 2016

Countries that have experimented with taxes to manipulate food markets and control food consumption
A sugar tax has been used in some countries aiming to reduce the purchase and consumption of items high in sugar and calories. Foods containing a certain amount of sugar would be taxed a set amount of money per litre or gram. Tax revenue would go to the government, leading to an increase to the shelf price of the product.
Examining taxes implied on food products in other countries could be beneficial in considering how effective a sugar tax may be in the UK.
In 2012, France imposed a tax on drinks containing added sugar or sweetener, at 7.55 cents per litre(11), with the  intention to reduce the risk of excess weight. Although this is not a tax on all sugar-containing products, France is a suitable country to make comparisons to the UK given the similar levels of industrial and social development(12, 13). Results can be examined from an evaluation based on ‘two French regions which were compared to two neighbouring Italian regions at twelve months preceding and following the enforcement of the tax’(11). The study showed a small decrease in purchases of soft drinks equating to about a can less per person per month relative to the Italian figures(14).  Data taken from Ecorys Data analysis showed that the ‘price of regular cola increased by 5% in 2012 and demand decreased by 3.3%’(15) . The revenue collected was put towards public health and in 2012 it produced £268 million(16). This is only a small percentage change and the money produced is not a substantial amount in comparison to the total health budget(17). Consequently, the sugar tax in France did not have significant effect on BMI.
../../Downloads/unknown-2.pngTaxes on sugar-sweetened beverages started in 1933 when California implicated a 7% sales tax(11). By 2014, 34 US states had a similar tax. ‘The main outcome of the tax was generation of revenue rather than a change in behaviour’, this is thought to be down to the fact the tax was not large enough(11).
The UK can learn from the consequences of the previous taxes in order to find out the degree of taxation needed to have meaningful effects. Research published in the BMJ proposed that ‘taxation needs to be at least 20% to have a significant effect on national health(18).’ ‘A 20% sales tax on sugar-sweetened drinks in the UK has been predicted to decrease the number of adults who are obese by 1.3% and the number than are overweight by 0.9%’(19). Taxation at this amount would generate revenue, like France and America, but have a larger impact on health-behaviour as well as sales.
In September 2013, the Mexican congress passed an excise tax on sugar sweetened beverages at one peso per litre(20). By December 2014, there was a 12% decline in the consumption and purchase of these goods and the largest change was seen in the lowest socioeconomic group in which consumption fell by 17.4%(21). Evidently, a tax in Mexico had a larger impact in decreasing sales of sugar products when compared to France. The reason for this will have confounding variables but one likely proposal is that it is due to the difference in the level of country development. In many areas of Mexico tap water is not safe to drink and therefore bottled drinks are higher in demand. Mexico had the largest per capita intake of soft drinks in 2014(22) and was ranked the 4th most obese country in 2017(23).  This considered, the tax in Mexico targeted one of the main sources of calorie intake and it had a higher proportion of the population to act on. This indicates that for a tax to be effective it should target the main source of calorie intake.
Denmark introduced a tax on saturated fat in 2011(24). Although this doesn’t involve sugar, examining the effects of this tax will be helpful in seeing how a food tax affects a nation. This tax had to be repealed due to the negative outcomes and the consequent negative response from the nation. The tax increased cross-border trade which lost income and jobs for those working in the food industry in Denmark; ‘continuation of the fat tax would have resulted in 1300 job losses’(25). The fat tax had little support from the population when introduced and even the initially supporting politicians changed their minds in reaction to criticism(26). This illustrates that a new law needs to have political support before being enforced and confidence that it will not majorly affect employment levels.
The consequence of a sugar tax in the UK
In the following paragraph, I will explore how the successes and failures from taxes introduced in the previous countries would apply to the UK.
The tax in France made a small influence on sales figures so how can the UK government be sure that a tax on UK sugar products would have a more notable result? In addition, the purpose of this tax is to try and reduce national BMI so evidence is needed that a drop in sales would lead to a drop in obesity. Despite the French decrease in demand only being small, this is still the preferable change. The tax had a negative impact on the number of products containing sugar sold which is the intended outcome.
Mexico demonstrated that implying the tax on food-types which a large proportion of the population consume can be very effective. A diet too high in sugar would be targeted with the enforcement of the sugar tax. In the UK, children aged 4 to 10 are consuming twice as much sugar as they should be(27) therefore by making products containing this less accessible, obesity can be tackled from childhood.
In Mexico, the largest impact was in those people of the lowest socio-economic background which illustrates a potentially regressive nature of the tax (16). ‘A regressive tax is a tax that takes a larger percentage of income from low-income earners than high-income earners’(28). Food is a necessity which everyone needs to buy and therefore people who earn less will spend a larger percentage of their income buying the same amount of food than someone who is richer. One could argue that with an increase in the price of sugar-containing products, due to tax, poorer people will no longer be able to afford these food types. However, the richer members of society will not be affected by the price change because they aren’t financially stretched.  This could be proposed as unfair given that the tax doesn’t apply to everyone equally thus the tax shouldn’t be enforced. That said, people of a lower socio-economic standing tend to have an unhealthier diet than those of a higher socio-economic standing(29), the ‘main contributors to energy intake being breads, oils and sugars’(29). This is partly due to the ‘higher relative price of foods such as fruits and vegetables and lower prices of unhealthy foods’(16). The regressive nature of the tax could therefore be favourable given it has the largest impact on the group of people where the biggest effect is needed. Lower socio economic groups have a higher incidence of most diet related diseases, particularly cardiovascular disease(30), so progressive health improvements could be expected.
It is important to think about how a sugar tax might affect jobs in the UK. The food industry claim that consumption taxes are ‘ineffective and unfair’(31). In Denmark, the problem was due to competitive pricing from international suppliers which were imported therefore the UK government may need to consider measures which can be put in place to ensure the change in pricing has as little effect on profit as possible. Alternatively, one could look at it in the sense that taxes would reduce demand for certain foods but increase demand in other food types. This would increase profit and job opportunities in these sectors and compensate for the loss elsewhere.
Additionally, food suppliers may look to change the recipe of products to include sugar alternatives(31) and consequently not be taxed. The product price wouldn’t be increased as much by tax and the product may be healthier which would undoubtedly be a positive outcome of the taxation.
Evaluation of effectiveness
In order to be able to analyse the result of a sugar tax in the UK, studies would have to be done before and after the implementation. Effect of tax on sales is simple to quantify by measuring the reduction in purchases. It would also be necessary to measure if demand rises in any other food areas which are untaxed to understand how the population is replacing sugar products in their diet.
Employment statistic in the food industry could be monitored to indicate if there are any significant declines and, if so, control the negative effects that a tax may have. The tax in Denmark illustrated that it is important to have political and population support in the implementation of a new tax. Consequently, public surveys would aid in understanding the reaction of the population and allow response to major complaints that may arise.
Measuring health outcomes is more challenging given the large time scale needed for results to occur. Many obesity-related illnesses have an onset later in life and BMI isn’t something that changes immediately. Consequently, no sudden changes in health would be seen. It would not be until many years after the implementation of the tax that a critical analysis could be done to quantify the change in BMI that it produced.
Conclusion
The decision whether or not to imply a sugar tax is not one with a conclusive answer. Existing evidence suggests that the tax is likely to shift consumption in the desired direction(19). However, the long-term health effects of food taxes still aren’t clear given there is no evidence that there is a definite successful effect in decreasing obesity-related illnesses. The negative outcomes of food taxes in other countries should be used to the UK’s advantage in making alterations to prevent these occurring and enforcing a well-designed tax. That said, studies based on taxes in other countries are not directly comparable to the UK due to the differences in population obesity, the food products that the tax was implemented on and varying economic development. Despite risk, I think a sugar tax should be enforced in attempt to decrease the nations BMI. In my opinion, action needs to be taken to control the obesity pandemic(1) and this is one achievable way. One certainty is that the tax will generate revenue for the government(16). This revenue can be used in obesity prevention programs or adding to the health-care budget. In a meta-analytic review of obesity prevention programs carried out in the USA it was found that ‘prevention programs targeting health behaviours, such as eating-pathology, produced weight gain prevention effects’(32). In addition, ‘larger weight gain prevention effects were observed from programs targeting children and adolescents’(8, 32). Although the government cannot be sure that the tax will have positive and meaningful effects, I think it is a risk that should be taken in taking steps to combat obesity.
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