Sugar Taxes Haven't Proved Effective in Tackling Obesity
Malaysia recently became the latest nation to call for a tax on sugary foods or drinks to tackle obesity. Four thousand miles away, at a recent Senate inquiry into public health policy in Melbourne, Australia, Green Party Sen. Richard Di Natale quizzed me about the Australian Taxpayers’ Alliance’s research, which revealed that sugar taxes have failed to make any significant dent in obesity rates in the countries that have pursued them.
Instead of engaging with the claims and evidence, the questioning took a different line — Di Natale asked me: Public health lobby groups like the Australian Medical Association disagree with you. Are they wrong? Plainly put, yes. And now we have fresh evidence from the United Kingdom that indicates exactly that.
The British sugar tax took effect in April this year after intense campaigning by advocates like multimillionaire celebrity chef Jamie Oliver, who claimed that it is moral and necessary to tackle the obesity problem, describing it as a “tax out of love.” Oliver has previously called for a ban on using cartoon characters to advertise sugary food to kids, despite using cartoon characters on his own TV shows in segments featuring recipes for high-fat, high-sugar chocolate brownies.
Back in April, 11 percent of British shoppers claimed that they would cease consuming sugary drinks if a sugar tax took effect. Since then, that figure has fallen to a paltry 1 percent. Surprisingly, the number of people who said they will continue to buy sugary soft drinks also rose post-tax, from 31 percent in February to 44 percent in June. Nielsen sales figures also show that big brands like Coca-Cola and Red Bull grew substantially over the 12 months preceding August 2018, by 7.6 percent and 9 percent respectively.
The UK figures should come as no surprise. Multiple American states and five major countries — Denmark, France, Hungary, Mexico, and Chile — have experimented with taxes on soft drinks or sugar. Not one of them has seen a material impact on their rate of obesity, which continues to climb across the Western world. Soft drink consumption in France was 4.2 percent higher in 2015 than it was right before its tax was introduced, a significant increase even when adjusted for changes in France’s population.
In Mexico, Nielsen sales data showed that over a two-year period since the introduction of a sugar tax, soda consumption fell by just 182 liters in the entire country, across a population of over 120 million people. Despite this, sugar tax lobbyists and activist groups were so eager to claim success that they announced the findings of a study claiming that the Mexican soft drink tax had caused a 12 percent reduction in consumption across the populace since it was implemented in July 2014, with a 17 percent reduction among low-income groups. The non-peer reviewed study — which was coincidentally overseen by one of the tax’s strongest proponents and an adviser to the Mexican government — consisted of panel interviews and self-reported data. Glaringly, the study ignored actual sales figures.
Finally, in 2016 the Mexican government claimed that sales figures had to be adjusted against hypothetical figures of what they would have been without the tax—in other words, using unverifiable assumptions to set a hypothetical scenario that lets them claim victory no matter what the real results were.
Clearly, burying one’s head in the sand makes more sense than admitting defeat. We now know that the soft drink industry in Mexico has rebounded, and the regressive tax has only served to take money out of the pockets of poorer Mexicans to line the state’s coffers. So much for a tax “out of love.”
This isn’t the first time that junk science has been employed to defend sugar taxes. Chile added a modest tax of approximately five cents to every 500 ml can or bottle of sugary drink in 2014. Researchers admitted that the data showed no significant actual impact in reducing soda consumption. Yet they still concluded that the minuscule tax increase had caused a staggering 21.7 percent drop in soda sales, based upon assumptions and modeling that are not disclosed in their paper.
But obesity rates continue to climb in Western nations despite an actual decrease in sugar consumption, driven in part by the emergence of diet and zero-sugar alternatives and reformulation of products to lower sugar content in response to demand from health-conscious consumers. We know it’s perfectly possible to consume sugar as part of a balanced diet, and that sugar consumption has no impact on weight gain if the individual burns more calories than they consume. Perversely, we also know that taxing sugary foods and drink only pushes comfort food seekers to non-sugary alternatives that are just as bad or worse, including savory fatty foods and alcoholic beverages.
All sugar taxes do is punish working consumers seeking a treat or some relief at the end of a long week. But that isn’t going to stop the international public health bureaucracy from demanding them.
Satya Marar is a Young Voices contributor and Director of Policy at the Australian Taxpayers’ Alliance, a 75,000+ member advocacy group representing Australia’s taxpayers.