• Danny Buckland - United Kingdom

Sugar taxes: Searching for the sweet spot

Sugar taxes and food product labelling are increasingly in use to help people choose healthy and arrest the surge of non-communicable diseases. But that is no silver bullet for the growing burden of chronic disease worldwide.



The obesity epidemic has been snowballing for 50 years, gathering weight and danger with every turn, and threatening to sweep away a generation’s full life expectancy. Obesity is one of the chief risk factors for non-communicable diseases (NCDs) ranging from type 2 diabetes, heart disease and stroke to degenerative musculoskeletal disorders and dental decay, which are bankrupting healthcare systems and upending personal lives alike.


The statistics signpost a bleak future, with World Obesity forecasting that 2.7 billion adults—roughly the population of India and China combined—will be overweight by 2025, including 1 billion with obesity.

Sugar consumption is a significant factor in poor diet and weight gain and, therefore, an obvious target since the risk for NCDs increases as body mass index (BMI) rises. Surely, sugar taxes and robust product labelling will help cut consumption and the associated danger? If only it were that simple.


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Governments around the world, from high to low and middle income, are struggling to find ways of introducing levies that may encourage behaviour change and promote healthy eating.


From American Samoa to the United Arab Emirates, more than 50 nations have introduced taxes, mainly on sugar sweetened beverages (SSBs), with encouraging reductions in sugar consumption. Front-of-pack labelling—including warning notices and traffic light and nutrition score information—also appear to help the consumer identify and buy healthier foods.


Data from Mexico, Malaysia, South Africa, Chile, Spain, the Netherlands, and the UK show that SSB taxes can reduce consumption by nudging consumer behaviour and through product reformulation by manufacturers. But it is also clear that sugar taxes alone will not stem the tide.


Policies must navigate a series of economic, political and psychological obstacles beginning from the food industry’s willingness to absorb the hikes to keep consumers unaffected, to high-profile counter-publicity campaigns and public mistrust of government taxing policies.


“Sugar consumption is on the rise globally, increasing the risk of conditions like diabetes, heart disease, obesity and dental caries, with teeth removal being the primary cause of hospitalisation among children,” says Gemma Bridge, an independent public and oral health researcher who has analysed sugar taxes around the world.


“It is particularly on the rise in low- and middle-income countries (LMICs); but sugar taxes need to be implemented alongside other policies—such as food labelling and education—to create change.”


Economic war on obesity


The main drivers of obesity are a reduction in physical activity and an increased intake of energy-dense foods high in fat and sugars. Although every region of the world is seeing rising levels of obesity, the problem is particularly acute in LMICs.


“It is not just that we need to introduce [sugar taxes] because people are obese, it is [also] the fact that obesity imposes pressures in terms of healthcare costs,” says Eleonora Fichera, Reader in Economics at the University of Bath, who specialises in social determinants of health.


“We know that obesity is associated with cardiovascular disease and other NCDs, which create real-time costs on healthcare systems and future costs on individuals and their ability to work and live. It is a long-term societal problem, which is why it needs interventions from governments.”


Mexico declared an epidemiological alert in 2016 after recording 72% of its population as overweight or obese and registering almost 100,000 diabetes-related deaths each year. Earlier, in 2013, it had introduced a 10% tax on soft drinks with high sugar content, which reduced SSB consumption by 12% and generated a 4% increase in bottled water purchases after only a year. It bolstered the effort with front-of-pack warning labels for unhealthy food and beverages, regulation of junk food marketing directed at children and support for breastfeeding mothers.


A research article from the Center for Health and Nutrition Research at Mexico’s National Institute of Public Health frames the escalating concern: “Given the epidemiological profile of the Latin-American region, with non-communicable diseases and obesity as the leading causes of death and morbidity, urgent actions are required to address this public health problem.”


Chile fared even better with its SSB tax cutting consumption by 21.6%, but there was no proportionate increase in the sale of non-sugary drinks.


The differing outcomes, from what are relatively new interventions, need more research and analysis but they indicate the importance of targeted approaches for each nation and socioeconomic group.


Opposing forces


More variables are introduced with political and economic pressure. In Brazil, where adult obesity leapt from 11.8% in 2006 to 19.8% in 2018, an SSB tax was briefly effective until it was repealed under pressure from food and soft drinks manufacturers.


Similar was the bruising experience of Cook County, the main administrative district of Chicago in the US, in 2017, where a tax on sugary drinks was scrapped after four months since a multi-million-dollar campaign projected it as a ruse to raise government revenue by unfairly targeting poorer communities.


There must be an emphasis on gaining support for policies from different areas of government such as agriculture, finance, and health.

Bringing those people together helps identify strong arguments and justification,” Bridge says.


The food industry and its lobbyists lose no time in pointing out that such regulation targeting their business overlooks other forces that contribute to obesity and risk of NCDs such as limited access to sports facilities, poor urban design, pollution, and environmental health. Many manufacturers claim they are ahead of the curve in reformulating recipes to reduce sugar, as well as salt and high fat content.

Personal choice and freedom from government interference are also potent themes to push back on mandatory SSB and other food taxes.



Pushing together for better outcomes


How these taxes are framed and publicised, and how food labelling is designed are critical elements. Bridge advocates sharing experiences and best practices. “It is a complex area for individuals and families to navigate on their own so there must be upstream interventions,” she says. “We need to highlight the positive and negative outcomes, so we can learn from them."


There should be a global task force that could share case studies, particularly with LMICs, to improve their ability to create healthier communities. Fichera says a focus on creating equitable policies is especially important. Care must be taken to ensure that SSB taxes are not regressive, and that they do not burden people with low income, she says. “...[low-income] people are the ones that make poorer choices, particularly in LMICs. There are issues of inequality in these taxes.”


There should be a global task force that could share case studies, particularly with LMICs, to improve their ability to create healthier communities.

Fichera favours the creation of partnerships between nations, international organisations, and the private sector as a way of establishing better health in society without harming economies. “I am hopeful that if we think about health in every policy then we can make a difference. The climate change debate has shown that people care, and will respond; so we will be able to tackle obesity and NCDs.”


Sugar taxes in action


South Africa exemplifies the spectrum of issues swirling around food and health as its communities range from high-income to subsistence living. In 2018, the country introduced a 10% health promotion levy (HPL) on SSBs containing more than 4 grams (g) of sugar to arrest soaring incidence of NCDs and deaths as 70% of women and just under 40% of men are classed as overweight or obese.


The Healthy Living Alliance (HEALA), a coalition of civil society groups dedicated to building a more equitable food system, wants the levy raised to 20% to protect low-income members of society who carry the highest burden. The demand is backed by more than 40 leading academics in the field of economics, medical science, and public health, in a letter to the South African government’s finance, tax, health and treasury offices.


The breadth of the global challenge is immense, and in a place like South Africa it can involve something as fundamental as improving access to clean and safe water so that people do not turn to sugary drinks instead.

One of the signatories, Professor Corné van Walbeek, director of the University of Cape Town’s Research Unit on the Economics of Excisable Products, highlights that the tax fetched approximately R2.9 billion (US$197 million) in revenue in its first year and then dropped as manufacturers reduced sugar content in products to avoid the charges.


Sale of SSBs fell by 29% and their sugar content fell by 51% while, critically, lower-income households reduced their SSB consumption by 32%—a drop of 57% in terms of grams of sugar consumed.

“It was a good result because there were significant changes in the sugar content of many SSBs, with companies going out of their way to reformulate so they could pay less tax,” Walbeek says.


“The South African population does have a large proportion, particularly among women, who are obese, which adds to our problems of diabetes and cardiovascular disease, so it is right that the government has made interventions. But research tells us that SSB taxes have a modest impact, and we have to be cautious that they are not perceived as the silver bullet that is going to solve all the issues involved—they don’t." Walbeek continues, "However, they are worthwhile, and the main benefit is from the supply response, with producers cutting back on sugar content.”


The South African government is considering increasing the HPL to 20% and extending it to certain fruit juice drinks, but its next move remains uncertain as the Treasury has also indicated it might consider reducing the tax.


No one-size-fits-all approach


Despite the fluctuating approaches and the absence of a long-term evaluation, because the taxes are recent, it is agreed that SSB taxes, as well as front-of-pack labelling, can play a role in improving health and reducing the burden of NCDs. However, given the complexity of local regulations, cultures, politics and economics, there can be no one-size-fits-all approach.


"The breadth of the global challenge is immense, and in a place like South Africa it can involve something as fundamental as improving access to clean and safe water so that people do not turn to sugary drinks instead," Bridge says.


“The issues are different in each geography, so local involvement is essential. But if we do not tackle this then we are going to see NCDs rising around the world, and particularly in low-income countries.”


The rise in sugar consumption and the runaway profile of obesity and NCDs are strongly linked, so the response should be wide-reaching and collaborative. It is a ‘one world’ problem that requires multiple solutions.