Can a sugar tax solve the obesity epidemic?

In light of Chancellor George Osborne’s announcement of a ‘sugar levey’ in the 2016 Spring Budget, Dr Matthew S Capehorn weighs in on the affect this could have on obesity levels across the UK.

The level of obesity prevalence in the UK continues to rise, and it is associated with causing or aggravating over 50 different medical conditions, such as diabetes, hypertension, cardiovascular disease etc. And so unless the increase is stopped we must expect to see an increase in the associated medical problems. If current trends continue, projections in the Foresight Report suggest that by 2050, 50 per cent of adults will be classified as obese by Body Mass Index (BMI), with direct and indirect costs of obesity costing the NHS an estimated £49.9 billion per year.

The Health Survey for England Report suggests that we currently have approximately one in four adults that are classified obese by BMI and in total approximately two thirds of the adult population are at an unhealthy weight, i.e. more of us are at an unhealthy weight than a healthy one. It is not surprising then that the public, and now even the government, are prepared to consider more ‘nanny state’ approaches to tackling the problem.

The levy
In the 2016 Spring Budget, Chancellor George Osbourne announced proposals for a sugar tax on soft drinks, apparently reversing the previous opinion of the cabinet that this was not going to happen. The Prime Minister, David Cameron himself was quoted in October of 2015 as having said that a sugar tax had been ruled out because there were ‘more effective ways of tackling this issue than putting a tax on sugar’.

However, the plan, unveiled on 16 March 2016, and subsequently approved by parliament, introduces a levy on companies who produce drinks with added sugars from April 2018, with the proceeds being used to double the funding available for sports in primary schools. The tax does not apply to milk based drinks or fruit juices.

The actual fine detail of the tax has not yet been announced, but many healthcare campaigners want it to be in the region of 20 per cent. It is believed that there will be one level of tax for drinks containing at least 5g of sugar per 100ml and a higher rate for those containing more than 8g per 100ml. To put this into context, a typical sugary cola drink can contain in the region of 13g of sugar per 100ml (equivalent to nine teaspoons of sugar per can), which can be double the daily recommended intake of added sugar for children.

So what is the reason for the apparent u-turn? Does the government now believe that a tax on sugary drinks is an effective way to tackle the obesity epidemic, or have they either given in to pressure from sectors of the public and high profile campaigners, or has it been a carefully crafted headline grabber to deflect attention from other issues?

The problem with sugar
Sugar is a carbohydrate that provides energy (approximately 4kcals per gram). Added, or refined, sugars (i.e. not naturally occurring in foods) are criticised for having no nutritional value (but does still have a small place in flavouring foods that may have good nutritional value) but will still provide the same levels of energy which, if not used up, will be stored in the body (initially as glycogen – a readily available energy store, but then further excess is stored as fat), adding to weight and cardiometabolic risk. It is not surprising that healthcare campaigners have been adding pressure to reduce consumption.

In 2015 the World Health Organisation (WHO) introduced recommendations to limit ‘free sugar’ (i.e. added sugar) intake to no more than 10 per cent of total energy intake, but with a conditional recommendation to try and aim for no more that five per cent of total energy intake - for a normal adult male, a five per cent limit would be approximately 25g, or six teaspoons full. In 2015, the Scientific Advisory Committee on Nutrition (SACN) was also asked to look at the recommendations for sugar intake by the Department of Health (DoH) and the Food Standards Agency (FSA) and they too recommended that free sugars should account for no more than five per cent of daily dietary energy intake.

Conflicting opinions
Simon Stevens, chief executive of the NHS in England stated that the sugar tax will ‘incentivise soft drink companies to act on the health consequences of their products’, and that ‘while no child needs a daily dose of sugary fizzy water, sadly soft drinks are now our children’s largest single source of diabetes‑inducing, teeth-rotting excess sugar’. Graham MacGregor, chief executive of Action On Sugar, welcomed the tax but acknowledged ‘that in itself won’t get rid of obesity’.

However, Gavin Partington, director general of the British Soft Drinks Association, has claimed that the industry has reduced the amount of sugar in products by 13.6 per cent since 2012, and this has been on a voluntary basis without a tax. Ian Wright, director general of the Food and Drink Federation has been quoted as suggesting the tax is unfair, and would in fact deter companies from developing new and healthier products.

He said: “The impositions of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity.”

So, who to believe? There is clearly not much debate over the fact that we should all want to see a reduction in sugar consumption, but debate arises over how best to achieve this. Is a tax the best way to go?

As a matter of principle, should we not resist the taxation of food? We need food, of any kind, to survive and function, and it has been quoted many times that there is no such thing as an unhealthy food. Free sugars do not provide any nutritional value but do provide energy, which in some circumstances may be needed. Having said this, this is a weak argument when current consumption levels far exceed current recommendations.

However, if someone of otherwise healthy weight and lifestyle chooses to have a sugary drink to replenish energy levels, should we be financially penalised by having to pay an additional surcharge on that drink?

Food consumption and certainly appetite and hunger are very complex. We know that even when we are physiologically full, psychological hunger plays a big part and we may still crave certain foods. This leads to emotional eating, comfort eating and eating out of habit. Unless these underlying relationships with food are addressed then eating patterns may not change, especially by the introduction of a relatively small levy on sugary drinks.

How many of us give in to buying sugary drinks or foods from vending machines, where the price is already far greater than 10-20 per cent above the cost that these could be purchased from a supermarket, and yet the price has not influenced our purchase?

Can it work?
Over time a sugar tax could be broadened, and increased, or even introduced to foods with high sugar content, but will this help? It will certainly penalise the poor differentially more than others. Surely education and methods to ‘nudge’ people in the direction of healthy choices is better. If taxation can influence purchasing patterns, in what way does it educate the population on why they should not be drinking those drinks, or educate them at all in healthy diet and lifestyles? In Philidelphia in the United States, and many other US states, they have seen a dramatic reduction in sugar consumption (without the corresponding reduction in obesity) over recent years as a result of public debate and education, and without taxation. Furthermore, New Zealand has seen a five per cent reduction in carbonated soft drinks without taxation.

Has it been proven that introducing a sugar tax does indeed influence purchasing patterns, or consumption, or result in the ultimate aim of reducing obesity levels? In 1974, Value Added Tax (VAT) was first introduced to the soft drinks industry, at a rate of 17.5 per cent, but it coincided with an increase in sales. Currently, France, Finland, Hungary and Mexico tax sugary drinks with the aim of reducing consumption. Sales in Mexico fell by 6-12 per cent after it imposed a 10 per cent surcharge of sugary soft drinks in 2014, and in that first year they generated and extra 18.3 billion pesos in taxation, however in 2015 sales bounced back and there was a negligible difference in consumption compared to 2013 levels. Furthermore, we currently do not know whether reduced sales convey into reduced calorie consumption, or even overall sugar consumption.

Sales of sugary soft drinks may go down, but do consumers just compensate by purchasing sugary foods, or getting their ‘sugar fix’ elsewhere? Current modelling provided by the Office of Budget Responsibilities has suggested that with the anticipated tax, consumption of soft drinks with high levels of sugar will fall by up to five per cent, but then soft drinks with lower sugar levels will increase by two per cent. This is assuming that the tax is passed on to the consumer. Public Health England (PHE) has also acknowledged that ‘price discounting on high sugar products and its consistent impact on purchasing of food brought into the home would likely be greater than even the largest tax already introduced internationally’. With so many discounted offers in our supermarkets, will the consumer even see the tax rise, let alone have an effect by it?

In addition, even if overall sugar consumption reduces, do consumers compensate by eating more fat containing foodstuffs, which are more calorie dense (fat has approximately 9kcals per gram compared with 4kcals per gram in sugar) and therefore more obesogenic? There remain far too many factors to know whether this policy will result in reducing obesity levels. Denmark dropped its plans for a sugar tax after it abandoned its fat tax in 2012, only one year after its introduction, as it failed to change eating patterns.

Too many people cite the examples of taxation in the tobacco and alcohol industries as ways to curb consumption. However, these are not directly comparable with taxation of foodstuffs as we can (addiction aside) abstain and live without smoking or alcohol but cannot live without food. This is not to mention that the taxation of tobacco nearly quadruples the cost of the end product, which we cannot allow to see happen to food.

Better options?
The poor cannot afford further taxation, and it is likely that this tax could penalise them more than others. Rather than introducing a punitive tax on the public, a better way would be to encourage reformulation that results in reduced sugar levels in products at a rate that is acceptable to the population’s palate. However, this is what the food industry has been doing as part of the government’s Responsibility Deal. It is unlikely that this voluntary arrangement had reached its limit, and I suspect that it is in fact still in its infancy.

Companies need to make reformulation changes slowly in order to avoid losing their customer base. If the government was serious about wanting to reduce sugar consumption they should have considered imposing deadlines for reformulation within the food industry rather than a tax that hurts the consumer.

Whenever something like a food group is taxed it becomes elevated to the position of earning revenue, creating an incentive to continue production and increase sales. Here is another obvious comparison with tobacco.

Allowing the continued sale and consumption kills thousands of people, but generates billions in tax revenue. Once the government starts receiving income from sugar taxation there is going to be less incentive to ever introduce policies that would have otherwise been more effective at reducing sugar consumption.

At present, sceptics of this form of sugar tax will have to take solace in the fact that at least it is to be introduced on sugary soft drinks that have no nutritional value and that we as a nation could choose to live without, rather than a blanket tax on all sugar. However, surely there were better things that could have been done?

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