Will the sugar tax stop people buying sugary drinks? (Part 1)
In the most recent budget, George Osborne unveiled a tax on sugary drinks in a bid to tackle obesity in the UK. The sugar tax will see drinks with more than 5g sugar per 100ml taxed 18p per litre, and the highest offenders (8g per 100ml), such as Coca Cola, by 24p. Although this tax is targeted at drink manufacturers to encourage them to invest more in low sugar products, it is likely that these charges will be passed over to the consumer via price increases.
The question is, will this encourage shoppers to stop buying their favourite sugary drinks? Research into the effectiveness of such a tax on sugar has yielded mixed results. One line of argument is that while sugar tax is effective at generating excess revenue, which can then be used to fund obesity preventative projects, it is not an effective method for reducing actual consumption – if people want sugary drinks, they will still buy them no matter what the cost.
However, surely as long as the price increase is salient enough to the shopper, the sugar tax will reduce consumption of sugary drinks? The government Behavioural Insights Team have investigated the potential effects further, and they identified that a 12% levy on sugary drinks will be the optimum level of taxation to encourage a decrease in consumption. Additional support for the effectiveness of a sugar tax comes from a study into Mexican sugary drink consumption following a similar policy imposition. In 2014, Mexico imposed a 10% tax on sugary soft drinks in a similar bid to reduce sugar consumption.
These increases in prices led to a 12% decrease in soft drink purchases, with the average person consuming 4.2 fewer litres of sugary drinks per year (BMJ, 2016). However, Mexico is a poorer country than the UK, and so Professor Tom Sanders (Professor emeritus of Nutrition and Dietetics at King’s College London) questions whether an increase in prices will be as effective in the UK.
The UK sugar tax will not come into effect until 2018, until which the true question as to whether such a taxation will be successful at reducing the amount of sugar consumed in the UK can be answered.
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References BMJ. (2016). http://www.bmj.com/company/wp-content/uploads/2014/07/sugar-tax-mexico.pdf