South Africa is to introduce the 20% tax on sugar-sweetened beverages (SSBs) on 1 April, as part of a broader package of measures planned by the government to try and reduce obesity in the country, which has the highest ranked obesity levels in sub-Saharan Africa.
South Africa’s sugar tax will consider SSBs as drinks that contain added caloric sweeteners like sucrose, high-fructose corn syrup, or fruit juice concentrates, including carbonated drinks, fruit drinks, energy and sports drinks.
The government hopes the tax will discourage its citizens from consuming SSBs which are often blamed for obesity and rising levels of lifestyles diseases like type 2 diabetes.
Dr Temo Waqanivalu, coordinator of non communicable disease and health promotion at WHO, told FoodNavigator that other African nations will be watching to see if the tax helps reduce obesity levels in South Africa.
He said: “I think the work in South Africa could be significant and also show to other countries that it can work in the African continent.”
However, he pointed out that the tax alone was not a “magic bullet” but could be “cost effective” as part of the package of reforms set to be introduced in South Africa, including nutrition labelling and marketing restrictions on some foods and drinks.
Effectiveness of tax
However, the effectiveness of the tax has been questioned in some quarters, despite evidence that sugar taxes have been successfully implemented in other countries such as Mexico.
The Beverage Association of South Africa has warned it will damage economic growth and lead to job losses and claims that 97% of South African’s obesity problems have nothing to do with SSBs.
Velaphi Ratshefola, the managing director of Coca-Cola Beverages Africa, the bottling joint venture between Coca-Cola and SABMiller, said the introduction of the tax will lead it to scale down its operations in South Africa, with volumes reduced by as much as 25%.
But Dr Waqanivalu said the SSBs tax could mirror South Africa’s tobacco tax which had been a success.
He said: “There is definitely a sense that the benefits outweigh any of the economic implications there would be.”
Big is beautiful in South Africa
In South Africa, many older women aspire to be bigger, as they see it as an indication of health, happiness and affluence.
Up to 70% of women in South Africa are classified as overweight or obese, according to official figures.
Dr Waqanivalu said such deep seated cultural thinking needed to be addressed to help reduce obesity levels, along with government reforms.
UK sugar tax revenues lowered
Meanwhile, Britain’s chancellor of the exchequer Philip Hammond yesterday said that revenues could be lower from the sugar tax, set to be introduced in April 2018, than expected as drinks companies were reducing the amount of sugar in their products to avoid the tax.
“This is good news for our children,” said Hammond in his budget speech.
The tax was expected to raise £520m (€599m) a year but the Office for Budget Responsibility said it now expected it to raise £400m (€462m) a year.
The tax will be levied in two bands: 18p a litre for drinks with 5 g of sugar per 100 ml; and 24p a litre for those containing more than 8 g per 100 ml.