Last week, the UK government announced the introduction of a sugar levy on soft drinks that will be effective in 2018.
The tax will be split in two levels: one for drinks with total sugar content above 5g per 100 milliliters and a second for the most sugary drinks containing more than 8g per 100 milliliters. Small producers, pure fruit juices and milk-based drinks will be exempted.
The government expects that the tax will be passed entirely on the consumers and the revenue collected, an estimated £520m the first year, will be spent to fund sports in primary schools, at least in England. Scotland, Wales and Northern Ireland are free to decide how to spend their share.
Adding a tax on fizzy drinks should discourage or at least reduce the consumption of sugar, present in high amount in these beverages (a can of soda contains up to 40 grams of free sugars, around 10 teaspoons).
The guidelines issued by the World Health Organizations (WHO) in March 2015 recommend to reduce sugar intake to less that 10% of total calories (about 12.5 teaspoons). A further reduction to below 5% (6 teaspoons) of total energy is suggested. These recommendations are based on the results of scientific studies that showed a positive association between high amount of sugar in the diet and weight gain and higher rates of dental caries. In addition, other studies showed that children who consume high quantities of sugar-sweetened drinks tend to be overweight or obese.
Which were the reactions to this announcement?
Chef Jamie Oliver, who strongly advocated for this tax, was happy about the decision made by the government, but he also said that the tax alone won’t be enough to tackle obesity.
Public Health England and other organizations such as International Diabetes Federation (IDF) welcomed the initiative.
What about the soda industry? How did they react? Coca-Cola Great Britain said that a tax is not the proper solution to obesity and they, along with other soft drink companies, want to sue the government for discrimination, because the tax won’t affect fruit juices or milkshakes!
Will a soda tax work?
With this economic tool, UK joined other countries such as France, Mexico, and Norway that already have a similar measure or will soon have it (South Africa in 2017).
In Mexico, the tax on soft drinks came into effect in 2014, and a recent study concluded that the purchase of these drinks declined by 12% by December 2014.
Berkley, California, introduced the tax in November 2014 but an analysis conducted by Cornell University and University of Iowa showed that less than half of the tax was passed on the consumers. As a result, soft drinks aren’t more expensive and their sales didn’t decrease.
Indeed, such a policy tool must be designed with particular care otherwise it will be ineffective.
The levy on sugary drinks in UK will come into force in April 2018 so companies will have time to reformulate their products, besides investing a lot of money in campaigns to beat back the tax.
Hopefully, the government will use this time to implement the plan to make sure this powerful economic tool won’t fail, and that it will spend the money that will be raised to promote healthy eating and physical activity.