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Sin tax debate: Make the healthy choice the cheaper choice

By Nathan Gray+

05-Jun-2012
Last updated on 20-Jun-2012 at 09:57 GMT

Forget high taxes on unhealthy foods, health policy makers should be working with industry to help make the healthy options cheaper, argues Professor Jack Winkler.

Sin taxes on ‘unhealthy’ foods and drinks may be the bandwagon that many seem to have jumped on, but duties on such foods are ineffective and will not help achieve the policy health goals they set out to target, according to Winkler, who is a retired professor of nutrition policy (formerly at London Metropolitan University, UK).

Writing in the BMJ, Winkler, contends that although sin taxes are the “the dish du jour in nutrition policy,” the numbers backing up calls for such levies are ‘flawed’.

As such he believes any taxes will have “limited, even negative, effects.”

Speaking with FoodNavigator, the policy expert said whilst price is important, and should be considered as a valuable tool to improving public health, the idea of increasing the price of ‘unhealthy foods’ via such tariffs will not reduce consumption.

“The difficulty is that they all suggest one pricing mechanism – putting taxes on to unhealthy foods.”

“When you look at the numbers – in Britain and the USA – the simple fact is that putting taxes on things like soft drinks doesn’t change consumption very much. So it is an ineffective measure,” said Winkler.

He argues instead that the real way to get the public eating healthier is to shift the pricing ratio between healthy and unhealthy foods. “The goal is to make the healthy choice the cheaper choice.”

“The real question is how we go about this!”

Possible solutions

In his BMJ letter (found here ), Winkler suggests several ways help achieve these changes: including putting pressure on industry to reduce margins on healthy foods, in addition to modifying agricultural policies at the European level, and looking to governments to begin the changes by implementing nutritional standards in national catering contracts.

Government standards:

Governments are often the largest catering providers in countries – especially in the UK – providing meals for schools, hospitals, offices, residential institutions, and military bases.

As such Winkler believes national governments have the purchasing power of a supermarket group. Therefore by incorporating nutritional standards into supply contracts, governments could encourage the manufacturing industry to produce healthier ingredients.

“Once the ingredients are being produced to scale and the manufacturing process is in place for this area, then you can easily extend into the retail consumer market too,” argues the policy expert.

Health premiums:

Winkler also noted that healthier products often carry higher prices, not because they cost more to produce, but because manufacturers and retailers add on extra margin – knowing that nutritionally aware consumers are often more affluent and willing to pay more for products they think will do them good. 

He argues that manufacturers and retailers should cut the ‘premium’ margins put on healthy products, especially as they often cost less to produce than other products.

“The best example of this is soft drinks. Producing diet soft drinks costs much less than full sugar versions, so companies make a greater margin on these products,” Winkler says.

“If they gave part of that margin away then you would make sugarless drinks cheaper for consumers, but the industry would actually be more profitable because people would move towards these products [with higher margins] rather than the more expensive sugary drinks.” 

Agricultural policy:

Winkler believes that raising support prices for limited production quotas, of milk fat, meat fat and sugar would help increase the pressure to reformulate by increasing costs to food manufacturers without impacting farmers.

He said manufacturers would generally respond to such a policy by lowering levels of these ingredients in food – meaning changes in price would not be passed to consumers.

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