New calls for Australia to introduce a sugar-sweetened beverages tax have sparked an outcry from the food and beverage industry and provoked resistance from politicians. But why do health experts keep calling for a sugar sweetened beverages (SSB) tax, and why are politicians and industry resisting it?
How does a sugar tax work?
They vary in design around the world in 26 countries. In Mexico, a 10% tax on sugary drinks was introduced in 2014. When the tax starts in the UK in April, there will be two bands – one for sugar content above 5g per 100ml and a second, higher tax on drinks containing more than 8g of sugar per 100ml.
What’s new about this latest sugar tax push?
In a 2018 statement on nutrition the Australian Medical Association urged the government to introduce an SSB tax . This is significant because AMA is generally conservative when it comes to health policy and often avoids controversial debates. But it now wants a sugar tax “as a matter of priority”.
Does an SSB tax have political support?
The health minister, Greg Hunt, has made it clear the government will not support it, saying food labelling laws and voluntary codes of conduct to restrict food marketing to children are adequate. Labor’s Tanya Plibersek also stopped short of supporting a tax, saying other strategies are needed to promote a healthy lifestyle. The Greens, led by former doctor Richard Di Natale, support the tax and have previously proposed a 20% increase to the price of sugary drinks.
Why target drinks?
According to Prof Tim Gill, from the Boden Institute of Obesity, Nutrition, Exercise & Eating Disorders in Sydney, the strength of an SSB tax is it targets an easily defined product.
“It’s easy to identify sugary drinks and their manufacturers, and you can tax them at their production,” he said. “There are a limited number of sugary drinks producers in Australia. A bugbear for governments collecting taxes can be how complicated it can be. if you were to try to tax every sugary food for example, that would be very complicated to do.”
The government has previously used complexity as an argument against an SSB tax.
“But now with the UK jumping on the bandwagon, which has a similar consumption culture to ours but with a larger population and more producers, that complexity argument doesn’t hold weight anymore,” Gill said.
Research published in the Lancet medical journal shows in 2014, per capita sales of SSBs were nearly one per day in Australia, at 0.88 compared to 0.84 for the UK. Bureau of Statistics data shows Australia is one of the 10 highest soft drink-consuming countries per capita. The World Health Organisation recommends adults consume no more than six teaspoons of sugar per day, but the average Australian consumes more than double that. A 330ml bottle of Coke contains nine teaspoons of sugar.
Is there evidence a sugar tax will reduce obesity?
A study published in the Journal of the Academy of Nutrition and Dietetics found sales of soft drinks in Melbourne’s Alfred hospital dropped 27.6% during a 17-week trial when the price of sugary drinks was increased by 20%. Bottled water sales increased by almost the same amount.
An analysis of sugary-drink purchases in Mexico conducted two years after the tax was introduced found a 5.5% drop in the first year, followed by a 9.7% decline in the second. While two years is not enough to determine the long-term impact on health, the study found: “These reductions in consumption could have positive impacts on health outcomes and reductions in healthcare expenses.”
Sugar-sweetened drinks and sugar generally have been associated with obesity, type 2 diabetes, cardiovascular disease, tooth decay and bone density problems.
The Australian Healthcare and Hospitals Association says obesity is the leading cause of preventable death or illness in Australia – above smoking.
But it will take longer term analysis to see clear evidence of any impact of a tax on obesity levels.
Why hasn’t Australia adopted a sugar tax?
Lobby groups from the food and beverage industry are powerful. The Australian Beverages Council, the industry’s lobby group, has been fighting against a tax for years. It says there is no evidence a tax will do anything to reduce obesity, and it will cost jobs, which is a frightening message for politicians. The Australasian Association of Convenience Stores described the introduction of an SSB tax in the UK as “lazy,” “flawed,” “discriminatory” and “irrational”. It has ramped up its campaign to prevent such a tax in Australia.
Would introducing a sugar tax make Australia a nanny-state?
It depends on whether you believe the food and beverage industry has too much power. Health experts argue that through advertising, product placement and political influence, the food and beverage industry has an unfair and non-transparent influence over consumer purchasing habits, and that children especially are sometimes powerless to recognise or resist it.
They say an SSB tax would hold the industry to account. Others argue people need to take personal responsibility.
Would the tax disproportionally affect poorer people?
Yes. A Deakin University study used economic modelling to show the increase in annual spending on sugar-sweetened drinks under a 20% tax would average $30 a person, but those in the lowest socioeconomic groups would pay $5 a year more than those in the wealthiest groups.
Researchers concluded this was a modest price to pay given the benefits – and that Australia’s lowest socioeconomic group would receive the greatest health benefits. Health experts and advocacy groups say governments could reduce the financial burden on disadvantaged people by using revenue from a tax to fund health initiatives.
Isn’t obesity more complicated than sugary drinks consumption?
Yes. Experts do not propose an SSB tax as a silver bullet but one of several measures needed to address the obesity crisis.