26 Feb 2018
in Consumer, Drinks, Economy, Government, Healthcare, Manufacturing, Retail, Soft Drinks, Taxonomy
The UK is the most obese country in Western Europe, and the sixth most obese country in the world. Around 26.9% of the British population has a body mass index of 30 and above, according to the OECD report and the cost of treating ill health caused by obesity and related issues is rising fast, threatening the NHS budget.
The government, long criticized for taking no action to tackle this issue, decided to introduce a Soft Drinks Industry Levy, in the hope that the increased cost will stop people from buying soft drinks as often, and therefore they will be consuming less sugar. The manufacturers of soft drinks will be taxed on the volume they produce or import. The money raised as part of the levy is supposed to go to the Department for Education to be used to fund sports in primary schools.
Several countries around the world have already introduced similar measures, attempting to curb the appetite for sugar. These include France, Mexico, Hungary and Norway, amongst others. While initially they have seen some success in reducing the consumption of fizzy drinks, the data from the NCDRisC project shows that the average BMI and obesity prevalence increased or remained static in these countries in the long term.
Despite the strong opposition from soft drink lobby groups, the tax comes into force in April 2018. While the drinks industry claims there is no evidence that a sugar tax leads to lower consumption and warns it may cause loss of a significant number of jobs hitting the poor hardest, the health campaigners demand it should be extended to cover all chocolate, sweets and other confectionery containing the highest levels of sugar.
Time will show if the new tax is going to cause the desired effect in the UK. In some ways it is already working, before it has even begun. The April 2018 UK tax deadline is already forcing manufacturers to reformulate drinks to come in below the sugar tax threshold and they are introducing new drinks with less sugar content.
However, as the taste of sugar is naturally addictive, those habits are hard to break. Consumers may simply adjust to paying more for it, find cheaper substitutes to the taxed product to satisfy their sweet tooth or just choose cheaper brands of the same product, meaning their intake of calories remains the same as before the tax.