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UK government to introduce controversial ‘sugar tax’ as part of child obesity strategy
The Government has announced that it plans to introduce a controversial ‘sugar tax’ on sugary drinks from 2018 as part of a strategy to combat what has been termed as an ‘obesity epidemic’.
Announced in this week’s Budget, the sugar tax is expected to be levied in two bands – drinks that contain between 5 and 8g of sugar per 100ml will be subject to the tax with a higher band levied on drinks that contain 8g or more per 100ml. The Treasury estimates the sugar tax will raise revenue in the region of £520 million in its first year, funds that Chancellor George Osborne says will be used to double funding for sports in primary schools.
Soft drinks manufacturers now have the option to reformulate – said to be a costly and lengthy process – or absorb the tax by reducing their own profit margins. Alternatively, manufacturers may opt to increase unit cost – effectively passing the tax on to consumers who will pay more for sugary drinks. Experts suggest that the latter option may be the one that ultimately results in consumers purchasing low-sugar alternatives as opposed to more expensive high-sugar drinks.
The plans have been met with criticism from soft-drinks manufacturers. Ian Wright, director general of the Food and Drink Federation describes the announcement in this week’s Budget as “a piece of political theatre”, denying that the tax would improve obesity rates and adding that the tax could even result in industry job losses. According to information from the FDF, 57% of the soft drink market is already low or zero calorie with a further 5% classed as mid calorie, largely, it says, as a result of innovation and reformulation.
Gavin Partington, Director General of the British Soft Drinks Association (BSDA) which represents UK soft drinks manufacturers says the BSDA is “extremely disappointed by the Government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years – down 13.6% since 2012”.
He adds: We are the only category with an ambitious plan for the years ahead – in 2015 we agreed a calorie reduction goal of 20% by 2020.
“By contrast sugar and calorie intake from all other major take home food categories is increasing – which makes the targeting of soft drinks simply absurd.”
Figures from Public Health England indicate that 25% of adults, 10% of 4 and 5 year-olds and 19% of 10 and 11 year-olds are obese, with a BMI of 30 or above. Dealing with the consequences of obesity, including type 2 diabetes, hypertension, cardiovascular problems and cancer is said to cost the around NHS £5.1 billion a year.
In 2015, the Scientific Advisory Committee on Nutrition (SACN) recommended that sugar intake should not exceed 5% of our total daily energy intake, but figures from Public Health England estimates the average daily sugar intake to be between 12 and 15% for all age groups. It says excessive sugar consumption has been found to be particularly prevalent among school age children, which may constitute a time bomb of future obesity-related health problems if the issue is not addressed within this generation.
Duncan Selbie, Chief Executive of Public Health England, says of the sugar tax: “This will reduce the risks of obesity, tooth decay and other life threatening diseases. This is public health in action and a great foundation ahead of the child obesity strategy later this summer.
“A levy or tax was 1 of 8 recommendations from PHE’s evidence review on sugar reduction and is a stunning early indication of the Government’s commitment to reducing child obesity. The Chancellor has firmly set this in the context of every child having the right to a good start to life, especially good that the money raised will be used to boost funding for school based exercise and sport.”
Professor Susan Jebb, Professor of Diet and Population Health, University of Oxford, says further analysis is required in order to understand how the tax might operate and any possible changes in diet that might occur as a result of it. She adds: “The intention is that by taxing companies there will be an incentive for them to reduce the amount of sugar in drinks by reformulation (changing the recipe) or reducing portion size. But the government has left industry to decide how to handle this new levy. Changing their products is costly, and business may decide to just take the tax, or put up the costs of all its products to offset the tax.
Tax may lead to a “small decrease in consumption”
Professor Jebb adds: “Increasing prices of soft drinks across the board would be expected to lead to a small decrease in consumption, but ideally this levy needs to result in a clear price difference in the shops between drinks containing added sugar and those without. In this situation there is a clear price advantage for customers to switch to a no-sugar option. This switch would bring much greater benefits than reformulation. For example, a 30% reduction in sugar in a regular can of a sugary drink through reformulation or a decrease in portion size may reduce the energy content by about 40kcal. But switching to a no-sugar drink would save more than three times this amount.”
More legislation needed
Professor Naveed Sattar, Professor of Metabolic Medicine, University of Glasgow, says that while the sugar tax is a step forward, more legislation is needed. He adds: “This tax on its own, however, will not solve the obesity crises and we need more legislation to force food companies to make better quality food products and less unhealthy products which contain less fat, salt and sugar. These latter changes are the big goal, as well as forcing a total calorie content on all foods in big writing so it is crystal clear what each product contains, as this latter change could also help change behaviour.”
Professor Richard Tiffin, Professor of Applied Economics at the University of Reading, describes the evidence that a sugar tax will change consumer behaviour as ‘weak’. He says: “The government has heeded warnings that a tax on consumers will not change consumer behaviour sufficiently to have a significant impact on obesity.
“This is a revenue-raising measure and it is pleasing to see that revenue from the tax will be spent on measures that may have a more significant impact. The measures being proposed are somewhat blunt however, and will probably have the biggest impact on those children and young adults that are already participants in sporting activities, rather than those who do nothing. The evidence base is weak, and we need better understanding of the reasons why people make poor dietary choice to design really effective policies using this new revenue stream.”
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