Is the Sugar Tax doing more harm than good?
Boris Johnson recently announced that he would hold a review of the Sugar Tax levy should he become PM – possibly even calling for it to be aborted should it be found to be disproportionately harming those on the lower end of the economic spectrum. This article will assess the extent to which the levy has been successful from a health standpoint and whether there should be any concerns around its disproportionate effects.
What is the Sugar Tax?
I’m glad you asked. The sugar tax tries to limit the amount of sugar one consumes in beverages by raising the cost of producing and importing that drink. Drinks with a higher sugar content of 5g per 100ml are taxed at 18p per litre, whereas a sugar content of more than 8g per 100ml is taxed at 24p per litre. It is estimated that the levy will increase revenues by £240 million a year with many manufacturers taking action to cut sugar content rather than face the tax. It was estimated that only 8.4% of the market was liable to this tax due to the amount of reformulation that many companies undertook.
So how does it affect the lowest income earners?
Some have called the sugar tax ‘regressive’ i.e. it targets those with the lowest incomes by raising prices of products. Of course, this is only true if the extra cost of the drink through the tax is passed onto the consumer through increases in prices rather than the producer paying the tax. As mentioned previously, only 8.4% of the soft drink market is eligible for the tax. However, surveys have suggested that 62% of consumers in the UK have not changed their buying habits since the introduction of the tax while a survey conducted in America suggests that those in lower-income households are more likely to buy drinks with a higher sugar output than higher-income households. It is therefore highly likely that there is a regressive effect on the low earners although the extent of which is not empirically known but is expected to be marginal due to the positive steps the tax has had on producers.
Is it making people healthier?
Well the WHO last year reported that the UK was the 3rd fattest nation in the EU with 27.8% of adults being classed as obese. This is compared with just 14% at the start of the 1990s. The sugar tax goes someway in limiting this trend but only targets the sugar content of soft drinks. There have been recent calls for this to be extended juices and milkshakes but these are unlikely are Johnson's comments. Furthermore, health experts have said that there needs to be a 20% reduction in the sugar contents in foods on sale – the sugar tax, in the year it has been enforced has only reduced this by 2%. Of course, soft drink are not the only source of sugar and other contents contributing to this endemic. A study at the LSHTM found that a 10% increase in the price of sweet snacks lowered consumption by 7%, thereby bring further health gains. They also call for the importance of lowering prices for healthier alternatives.
We can, therefore, conclude that to counter the obesity problem in this country further restriction of sugar should be placed whilst also making healthier alternatives more attainable. This should reduce any regressive effects by making alternatives cheaper while discouraging people from buying those products high in sugar.
Boris Johnson recently announced that he would hold a review of the Sugar Tax levy should he become PM – possibly even calling for it to be aborted should it be found to be disproportionately harming those on the lower end of the economic spectrum. This article will assess the extent to which the levy has been successful from a health standpoint and whether there should be any concerns around its disproportionate effects.
What is the Sugar Tax?
I’m glad you asked. The sugar tax tries to limit the amount of sugar one consumes in beverages by raising the cost of producing and importing that drink. Drinks with a higher sugar content of 5g per 100ml are taxed at 18p per litre, whereas a sugar content of more than 8g per 100ml is taxed at 24p per litre. It is estimated that the levy will increase revenues by £240 million a year with many manufacturers taking action to cut sugar content rather than face the tax. It was estimated that only 8.4% of the market was liable to this tax due to the amount of reformulation that many companies undertook.
So how does it affect the lowest income earners?
Some have called the sugar tax ‘regressive’ i.e. it targets those with the lowest incomes by raising prices of products. Of course, this is only true if the extra cost of the drink through the tax is passed onto the consumer through increases in prices rather than the producer paying the tax. As mentioned previously, only 8.4% of the soft drink market is eligible for the tax. However, surveys have suggested that 62% of consumers in the UK have not changed their buying habits since the introduction of the tax while a survey conducted in America suggests that those in lower-income households are more likely to buy drinks with a higher sugar output than higher-income households. It is therefore highly likely that there is a regressive effect on the low earners although the extent of which is not empirically known but is expected to be marginal due to the positive steps the tax has had on producers.
Is it making people healthier?
Well the WHO last year reported that the UK was the 3rd fattest nation in the EU with 27.8% of adults being classed as obese. This is compared with just 14% at the start of the 1990s. The sugar tax goes someway in limiting this trend but only targets the sugar content of soft drinks. There have been recent calls for this to be extended juices and milkshakes but these are unlikely are Johnson's comments. Furthermore, health experts have said that there needs to be a 20% reduction in the sugar contents in foods on sale – the sugar tax, in the year it has been enforced has only reduced this by 2%. Of course, soft drink are not the only source of sugar and other contents contributing to this endemic. A study at the LSHTM found that a 10% increase in the price of sweet snacks lowered consumption by 7%, thereby bring further health gains. They also call for the importance of lowering prices for healthier alternatives.
We can, therefore, conclude that to counter the obesity problem in this country further restriction of sugar should be placed whilst also making healthier alternatives more attainable. This should reduce any regressive effects by making alternatives cheaper while discouraging people from buying those products high in sugar.