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A Spoonful of Sugar Makes the Taxes go Up!

Reducing our society’s consumption of sugar is likely to lead to a range of health benefits, including a reduction in the current high rate of overweight/obesity and in related diseases such a diabetes.    The latest piece in the JournalWatch series by Dr Melissa Stoneham reviews a report on the first cost-effectiveness study of a ‘soft drink tax’ in the USA.  Dr Stoneham reviews the arguments in favour of this policy and challenges the public health community to advocate for a similar tax in Australia.  

Dr Melissa Stoneham writes:

You would have to have been hiding under a rock not to have heard about Damon Gameau or at least his film called “That Sugar Film”. It has created worldwide interest and renewed awareness about how much processed sugar we consume on a daily basis. The film follows Damon’s 60 day journey to discover the bitter truth about sugar and follows him as he embarks on a unique experiment to document the effects of a high sugar diet on a healthy body, consuming only foods that are commonly perceived as ‘healthy’. The official Facebook page for the film includes many comments similar to this one: “That Sugar Film – could you have imagined your film would have had such an impact on people!”

And just when you thought it was safe to reach for that Mars Bar you hid in your bottom draw, the World Health Organisation releases a report recommending that Australians reduce their daily intake of sugar to 10 per cent of their total energy intake. The same report identified that adults who consume less sugars have lower body weight and, second and that increasing the amount of sugars in the diet is associated with a weight increase. The report also shows that children with the highest intakes of sugar-sweetened drinks are more likely to be overweight or obese than children with a low intake of sugar-sweetened drinks. So it seems pretty clear that sugar-sweetened beverages have a direct impact on body weight.

Thankfully, it is not just Australians who have been urged to reduce sugar consumption. Although we are ranked fifth on the worlds sugar consumption scale consuming an average of 95.6 grams of sugar each day, the countries which consume more sugar than us include America (126g per day, which is equivalent to around 3 cans of Coke), Germany, the Netherlands and Ireland. The lowest consuming country is India at a measly 5 grams of sugar per day.

It is not just the health professionals concerned about sugar either! In a recent report from the UK Food Standards Agency it was found that the most frequently mentioned wider food issues of concern amongst consumers were the amount of sugar in food (52%), food waste (49%) and the amount of salt in food (47%).

So what can we do about this? One school of thought, which worked well in the world of tobacco is to introduce a tax.  In fact, economists point to taxes as the single most influential factor in the striking reduction in smoking in the U.S.—the-per capita number of cigarettes smoked is a quarter of what it was in the mid-1960s. Looking to the ‘soda tax’, some countries and local governments have already embarked on this policy journey, including Mexico and the City of Berkeley. In Australia, Diabetes Australia, Cancer Council and the Heart Foundation have expressed the need for sugar-sweetened beverages (SSB) such as soft drink, sports drinks, fruit juice and flavoured milk to be taxed and regulated in the same manner as tobacco and alcohol. They have stated that reducing sugar consumption could help avert millions of cases of obesity-related illness in the next decade.

Over the past few years, a number of studies have found that higher beverage taxes and prices are associated with lowering the body mass index (BMI). This month in JournalWatch we are showcasing the first study to estimate the cost effectiveness of implementing a $0.01 per ounce SSB excise tax in the US.

By using a simulation model, the study which appeared in the American Journal of Preventive Health, found that implementing the tax nationally would cost $51 million in the first year and would reduce SSB consumption by 20%, substantially reducing the body mass index (BMI) among both youth and adults. Over a 10-year period, the tax would avert 101,000 disability-adjusted life years, gain 871,000 quality-adjusted life years, and result in $23.6 billion in healthcare cost savings. Annually, the authors suggested that the tax would generate revenue totalling $12.5 billion. Imagine if all those savings were redirected into prevention programs to promote physical activity and curb obesity in other ways! For example, governments could utilise the money to improve nutrition by providing subsidies for fruits and vegetables or support other public health community based initiatives such as nutrition education and obesity prevention programs.

Led by Michael Long from the Department of Social and Behavioural Sciences, at the Harvard T.H. Chan School of Public Health in Boston, the study basically indicates that a small tax on the production of sugar sweetened beverages can prevent obesity, save lives and ultimately reduce healthcare costs for the United States.

However critics of such a ‘soda tax’ state that sin taxes such as these directly affect the consumer rather than the industry that produces the harmful product in the first place, that vilifying a single ingredient has no scientific validity and that taxes do not change consumer behaviour. To address this, the authors have stated that in contrast to sales taxes that are collected from the consumer at time of purchase, their per-volume excise tax would apply to producers and distributors of sugar-sweetened beverages and would be incorporated into shelf prices, leading to an estimated 16 per cent total price increase for sodas, sports drinks, fruit drinks and any other beverages with added caloric sweeteners.

There is a long history of voters supporting taxes meant to protect health and to offset costs produced by products that can cause harm and the momentum is building. Precedents have been set and studies continue to highlight the benefits of such taxes. With studies such as this one purporting the economic and health benefits of a tax on SSBs, maybe it’s time for the public health advocates to ramp up the addition of soft drink and sugary beverages taxes to their list.

 

Article – Cost Effectiveness of a Sugar-Sweetened Beverage Excise Tax in the U.S. Michael W. Long, Gortmaker SL, Ward ZJ, Resch SC, Moodie ML, Sacks G, Swinburn BA, Carter RC, Claire Wang Y. American Journal of Preventive Health; Vol 49, Issue 1; pages 112-123.

About JournalWatch

The Public Health Advocacy Institute WA (PHAIWA) JournalWatch service reviews 10 key public health journals on a monthly basis, providing a précis of articles that highlight key public health and advocacy related findings, with an emphasis on findings that can be readily translated into policy or practice.

The Journals reviewed include:

Australian & New Zealand Journal of Public Health (ANZJPH)

Journal of Public Health Policy (JPHP)

Health Promotion Journal of Australia (HPJA)

Medical Journal of Australia (MJA)

The Lancet

Journal for Water Sanitation and Hygiene Development

Tobacco Control (TC)

American Journal of Public Health (AMJPH)

Health Promotion International (HPI)

American Journal of Preventive Medicine (AJPM)

These reviews are then emailed to all JournalWatch subscribers and are placed on the PHAIWA website. To subscribe click to Journal Watch click here.