Let’s stop talking about ‘sin taxes’ as if they are the saviour of mankind
The Danish fat tax failed. So did efforts to introduce a ‘pasty tax’ in the UK, along with various efforts to introduce soda taxes in the USA.
Yet not a month has gone by without a story on a fresh push for taxing unhealthy foods hitting my desk as potential news for FoodNavigator.
Sometimes we cover the story, sometimes we don’t. Often it depends on whether the new suggestions or research moves the debate forward in any way, shape or form.
One thing that has become increasingly clear to anyone who regularly engages in the issue is that the debate is far more complicated and nuanced than most people claim it is.
With this in mind, I ask one thing. Please, stop talking about taxes on ‘sin foods’ as if they are a magical cure-all that will reverse years of unhealthy eating practices and a growing epidemic of type 2 diabetes and obesity. Put simply, it won’t. It’s wishful thinking, or dare I say it, sinful thinking.
Whilst a tax on ‘unhealthy’ food and drink items - that really should be seen as a one off treats anyay - appears sound enough, the reality is that it is only one tool in a much wider (and barer) toolkit that public health campaigners, governments, consumers and the industry itself must work together to build.
A few extra pence, or cents, on a can of Coke alone certainly won’t be enough to force me to switch to mineral water.
I’m not saying that a tax could not form part of a solution. Just that it should not be pushed as the major part of any solution. Why? …
Because taxes do not alter consumption (much)
While parallels have been drawn between taxes on alcohol and tobacco, many forget that such taxes are colossal in comparison to any proposed food tax. And while they have worked, many have not worked as well as we once naively hoped they would.
I know lots of people that continue to smoke despite a levy rate reported to be 348%. Indeed, on a typical pack of 20 cigarettes the total tax burden in the UK accounts for around 77% of the recommended retail price. Does anybody realistically think a 20% tax on a can of soda will have any substantial effect? Being realistic, unfortunately, I don’t.
The fact is a 20% increase in retail price on the can of soda I bought with my lunch today (in the UK) would amount to 19 pence (€0.27). The same tax on a two litre bottle of Coca-Cola in a supermarket would amount to around 40 pence (€0.57) on average.
Indeed, previous research has suggested that a 20% tax on sugary drinks would reduce energy consumption by an average of 4 calories per person per day. While this figure is low I would argue that any reduction in caloric intake can, and should, form part of the toolkit to battle the bulge.
In the interests of balance I must mention that recent data from Mexico, which suggests that the 10% tax on sugary drinks brought in last year has reduced soda consumption by 6%, backs up the theory that soda taxes can and do work. The problem is that a 6% drop is not enough. As such, they surely cannot be the main solution.
I also worry about the fact that both the 4 calories per day and 6% drop are averages, and that for the vast majority of people who are most in need of help to battle obesity, there would be very little effect because:
- Brand Loyalty. People who really love their favourite drink will be willing to pay the little extra, leaving them out of pocket but still with an unhealthy diet
- Brand switching. Consumers who cannot afford or justify the price rise will simply switch to a cheaper brand or unbranded version; actually leaving them better off financially but still with an unhealthy diet
- Food swapping. Some will sacrifice other (perhaps healthier) foods to fund the price increases, leaving them no worse off but potentially with an even unhealthier diet.
These are just a few simple reasons why a major focus on taxation of ‘unhealthy foods’ would probably have very little effect, and could backfire.
Let’s move the debate on…
Rather than continuing to debate the ‘ifs’ and ‘buts’ of a political hot potato, we need to consider the full palate of obesity and diabetes-tackling alternatives. Why don’t we agree to drop the idea of taxes, even just for a little while, and focus on building a bigger range of solutions?
How about more pressure on industry to further reformulate foods and drinks to meet World Health Organisation (WHO) and SACN guidelines.
Industry – be it manufacturers or retailers are willing to act. Look at the recent move by UK retailer Tesco to remove added-sugar drinks aimed at children – in addition to previous commitments to ‘sweets free checkouts’. Couple this with ongoing efforts to reduce salt, fat, and sugar through reformulation and better portion control in food packaging.
More can be done by everybody involved in this area - but such solutions will do much more to reduce excess sugar and calorie intake than a tax would.
In addition, repeated suggestions that making healthier choices the cheaper choices (perhaps through subsidies or reducing the ‘healthy premiums’ charged for good-for-you products by some) are worthy of further exploration as a ‘price mechanism’ that has perhaps greater potential to do good.
Taxes can be part of the solution but they are no magic bullet, and it is time they stopped being billed as one.
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Nathan Gray is the science editor for FoodNavigator and NutraIngredients. He has written on key areas of food science and nutrition policy impacting the global food and nutritional supplements industry – including flavour formulation, sugar and salt reduction, gut health, and the links between nutrition and disease states. Nathan has a degree in Human Biosciences. You can tweet him @nathanrgray.
