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Sugar tax ‘best option’ to limit escalating health problems, says Credit Suisse

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By Oliver Nieburg+

13-Sep-2013
Last updated the 13-Sep-2013 at 11:23 GMT

The threat of tax may encourage food and drink businesses to step-up high-intensity sweetener use, says Credit Suisse
The threat of tax may encourage food and drink businesses to step-up high-intensity sweetener use, says Credit Suisse

A sugar tax is the best way to combat excess sugar consumption which doctors agree is partly to blame for growing global obesity and diabetes rates, according to a report from Credit Suisse.

The financial services firm has published its report ‘Sugar: Consumption at a Crossroads’ where it surveyed doctors across the globe on attitudes towards sugar. The majority agreed that sugar was addictive and responsible for type II diabetes.

Type II diabetes link

“As with alcohol and tobacco, higher taxation on drinks is the best option to reduce sugar intake and help fund the fast growing healthcare costs associated with diabetes type II and obesity,” said the report.

The majority of doctors surveyed (90%) said excess sugar consumption was strongly linked with the rise of type II diabetes and 65% agreed that sugar was addictive.

One of the authors of the report, Stefano Natella, co-head of securities research & analytics at Credit Suisse, said: "Although causality is difficult to prove in this area, with such a high percentage of doctors in our proprietary survey confident of this strong link, we cannot ignore the significance and the implications for society and our economy."

The Association of Chocolate, Biscuit and Confectionery Industries (CAOBISCO) previously called for a halt to ‘discriminatory’ food taxes and argued that there was no such thing as unhealthy foods, only unhealthy diets.

The rise of diabetes

According to the Credit Suisse report, type II diabetes is growing at a rate of 4% per year as obesity rates climb 1-2%, with around 370 million worldwide people are classified as obese.

Levies On Sugar

Some countries have already acted to curb rising sugar consumption. Denmark for example has a DKK 24.61 (€3.57) per kilo excise levy on chocolate and sweets, a DDK 6.61 (€0.89) hike per litre of ice cream and a DKK 1.64 (€0.22) tax per litre of soft drink.

In 2012, almost as many people died from diabetes (4.8 million) as did from smoke related disease (5.6m), said the report.

The finger is being pointed at sugar with soft drinks the biggest culprit. But the report did acknowledge that the effect of sugar intake largely depended on a person’s genetic make-up.

Sugar consumption far above recommended levels

The American Heart Association recommends six teaspoons of added sugar a day for women and nine for men.

However, the global average sugar consumption is 17 teaspoons, and the rate is much higher in some countries.

The US consumes more than any nation at 40 teaspoons, with added sugars accounting for 17% of a normal US diet - the majority coming from sweetened beverages.

Mexican consumption is also high at 35 teaspoons, while Brazil, Argentina and Australia are others with a big sweet tooth.

The report said that those with higher incomes and with higher levels of education were moving away from full calorie soft drinks to diet options.

“However, this trend appears to be slowing as amid growing concern related to artificial sweeteners.”

Formulate with high-intensity sweeteners

Coke launched stevia-sweetened product Coca-Cola Life in Argentina earlier this year

Credit Suisse expects the food and beverage industry to move towards ‘healthier’ options in the face of a regulatory clampdown.

The beverage industry has already begun to self-regulate by introducing zero calorie options with high-intensity sweeteners.

Credit Suisse expects the beverage industry to suffer in the short term, but feels it will soon adapt its market strategies to embrace change.

“Ultimately, companies that develop or help develop high-intensity natural sweeteners are poised to be the primary beneficiaries of the change,” it said.

6 comments (Comments are now closed)

Unbalanced Argument

I can only suggest the readers take the opportunity to familiarise themselves with the opposing view from Katherine Rich, Chief Executive of New Zealand Food and Grocery Council at http://www.fgc.org.nz/media/banks-sugar-report-unbalanced-not-based-on-evidence

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Posted by GM
26 September 2013 | 02h48

Taxing sugars

What do bankers know about nutrition? There is a wide body of peer-reviewed science that shows taxing is not the answer, though this is doga to the activists. A bit of education, rather than rhetoric, would go a long way but no one is interested in education, just yelling.

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Posted by Jeff Nedelman
25 September 2013 | 18h21

Evidence

Interesting comments. Evidence can be conflicting. What are the pros and cons of sugar? Can we live without processed sugar? Yes. Can we benefit from profits arising from tax on sugar? Yes - the revenue can be used to fight obesity. Is it effective way to reduce obesity? How does one prove that in quasi-experimental designs? Not likely. Sugar is added to numerous processed food which are not natural. What does natural mean? Processing sugar by processing sugar cane? How natural is that? However natural sugars in fruit are great and likely that will not be taxed. I am all for taxing those who make a lot of money on sugar processed food. The excessive profits and promotion of cheaply produced food with cheap processed sugar is in need of taxing. There are several articles that have found an addictive quality of these type of products but there is indeed conflict but that is not necessarily the issue here. Large number of people consume these products. Whether it is because they are addictive or not is less important than reducing its intake. I am a nutritionist and support this initiative. One of the papers I wrote in my PhD program was about the addictive aspects of certain types of foods and I believe that addiction to these sugary foods are both psychological and biological and have contributed to the increase in obesity. For example, shortage of dopamine receptors is similar for people with addiction and obesity along with psychological pressures for unrealistic thinness (Riva et al., 2006). Recent evidence and brain imaging indicate there is a biological effect on the brain due to higher sugar foods with a higher glycemic index that affect reward and craving behavior (Lennerz et al., 2013). However, obesity is multi-faceted and no single cause contributes to it.

References

Lee, A., & Gibbs, S. E. (2013). Neurobiology of food addiction and adolescent obesity prevention in low- and middle-income countries. Journal of Adolescent Health, 52(2, Supplement 2), S39–S42. doi:10.1016/j.jadohealth.2012.06.008

Lennerz, B. S., Alsop, D. C., Holsen, L. M., Stern, E., Rojas, R., Ebbeling, C. B., … Ludwig, D. S. (2013). Effects of dietary glycemic index on brain regions related to reward and craving in men. The American Journal of Clinical Nutrition, ajcn.064113. doi:10.3945/ajcn.113.064113

Riva, G., Bacchetta, M., Cesa, G., Conti, S., Castelnuovo, G., Mantovani, F., & Molinari, E. (2006). Is severe obesity a form of addiction?: Rationale, clinical approach, and controlled clinical trial. CyberPsychology & Behavior, 9(4), 457–479. doi:10.1007/s11199-010-9872-5

Wilson, G. T. (2010). Eating disorders, obesity and addiction. European Eating Disorders Review, 18(5), 341–351.

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Posted by Linda
19 September 2013 | 16h48

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