Post No.: 0703
Furrywisepuppy says:
The UK has been undergoing a generally rising obesity crisis for several decades. From the latest available statistics as of posting – around 28% of adults in England are obese, with a further 36% considered overweight. Over 14% of children aged 4-5 are obese, with a further 13% considered overweight. The figures for children aged 10-11 are over 25% and 15% respectively. Obesity rates soared for children during the pandemic.
Numerous different governments have come and gone during this time, delivering – or invariably failing to deliver – their own policies and targets to tackle this crisis. They’ve produced woefully limited success in changing the habits of consumers or the behaviours of the food industry.
But one policy that has made a difference is the Soft Drinks Industry Levy (SDIL), which came into force in April 2018. There’s a standard rate and a higher rate of levy that depends on how much sugar per 100ml a drink contains. Within a year of its introduction, sales of sugary drinks containing more than 8g of sugar per 100ml had dropped by 44% per household on average per week. Although soft drinks are only one source of calories amongst many in people’s diets, hence it was never expected to reverse obesity trends alone – this levy has ultimately reduced the amount of sugar consumed.
It isn’t really about raising taxes but about encouraging manufacturers to (re)formulate their drinks to contain less sugar. It’s clever because if it succeeds in getting a manufacturer to sufficiently reduce or keep low the sugar content in their soft drinks then no levy will be imposed on them (or the importer). Moreover, the consumer gets to consume a soft drink containing less sugar. This means that the manufacturer won’t have to absorb the cost of the levy and reduce its own profits or – only if the manufacturer chooses to – pass that cost onto its own customers via a price increase on its products, which might make these products less competitive in the market and thus less demanded (especially by the poorest consumers, who generally have a higher obesity rate).
But if the levy fails in getting a manufacturer to sufficiently reduce or keep low the sugar content in their soft drinks then extra taxes will be generated for the public treasury. This tax revenue can then be ring-fenced towards funding anti-obesity initiatives. If there’s a high price elasticity of demand, perhaps due to cheaper and lower-sugar substitutes, then people will buy fewer high-sugar drinks; or if there’s a low price elasticity of demand then that tax revenue can go fund things like health schemes for young children or perhaps even subsidies for fresh fruits and vegetables. (Demand for high-sugar beverages shouldn’t really exhibit a low elasticity because they’re non-essential goods and there are substitutes.) Hence it works either way – as a prevention or reduction of too much high-sugar drinks consumption (ideally) or failing that then there should be money to help pay for tackling the problem that too much high-sugar drinks consumption causes.
…Well ring-fencing that revenue for funding anti-obesity schemes was in the original plan but then a later government cabinet backtracked and clumped that revenue with general taxation. What a shame because the ring-fence is a part of the brilliance of this kind of levy. Many campaigners have been understandably livid about this backtracking. Woof.
Collecting less in taxes through the SDIL as the years go by would be a sign that the levy is working perfectly because it’d mean that manufacturers are (re)formulating their recipes to reduce or keep low their sugar and thus calorie contents, as hoped. Manufacturers and their lobbyists will always claim (according to their own research) that raising particular taxes will risk jobs and damage the economy, because they’re just trying to protect their own self-interests. Yet this demonstrates that, in all this time, it was always possible for many of these manufacturers to reduce the sugar content in their soft drinks without much problem – but for some reason it needed the government and taxes to press them to do so! Government interventions can therefore, evidently, promote industry innovation rather than laziness. And in most cases, the profit margins on what’s essentially mostly water and sugar are incredibly high anyway so producers can comfortably take the hit on any reformulation costs without passing them onto the customer. Consumers have largely not complained about, or even noticed, the differences in taste of the reformulated drinks either!
So the levy has worked to convince many (albeit not all) manufacturers to reduce the added sugar contained in their soft drinks – some have cut the amount of sugar down to under half of the original recipes. This wasn’t so much about changing consumer behaviour than changing manufacturer behaviour.
But since this levy only concerns soft drinks with added sugar – overall calorie consumption hasn’t decreased that much because people are still consuming lots of sugar through foods like cakes and biscuits. This is why many doctors and health campaigners are calling for this type of levy to be extended to a wider range of high-calorie drinks and foods.
Not even high-milk-content drinks are included in the SDIL because of the concern it might give mixed messages about the nutritional benefits of milk for growing children. Pure fruit juices aren’t included either because of concerns about mixed messages regarding fruit. Perhaps it shouldn’t send mixed messages though because the levy could just exclude 100% plain milk drinks. And it’s recommended to, for example, eat one whole orange as one serving of fruit rather than drink fruit juices because the average orange contains about 70ml of juice, whereas when serving an orange juice drink, most people would pour themselves way more than this and thus consume all that fructose (with no fibre too). If one is still thirsty then one should drink something like tea or water, or learn to dilute the pure fruit juice first.
Carbonated drinks are rightly included though – a sugary fizzy drink tastes even sweeter when it’s gone flat, which shows us how the carbonation itself disguises how much sugar we’re really consuming.
Lots of junk foods contain a high amount of added sugar. So should there be a similar levy to press junk food manufacturers to (re)formulate their recipes to reduce or keep low their sugar – and maybe also saturated fat and salt – contents? Reformulating food is much more difficult though because textures and mouthfeels matter too, and some natural food ingredients are inherently sugary, fatty or salty. (Some salt has been reduced via product reformulations by the food industry but people still generally consume more than the recommended amount of 6g per day for an adult.)
It’d be incredibly difficult and thus costly to enforce too because while there aren’t relatively many, say, brands of cola and probably no independent stores or restaurants make their own colas – different independent burger shops have their own burger recipes, so how are we going to check on each individual product line? And if such a levy were only limited to stuff bought from grocery stores, big chain restaurants or franchises with standardised menus, then they’d complain that small independent businesses would have an unfair advantage.
A hot baked goods or ‘pasty tax’ was considered in the UK a decade ago, but it demonstrated how making changes to the VAT system is tricky because of the difference in VAT for most foods bought for eating or cooking at home (which is currently zero-rated) compared to meals bought and consumed in restaurants or hot take-away meals.
Like alcohol, soft drinks are considered non-essentials because you can conveniently avoid them in your diet and drink cheaper water instead and be as optimally healthy as you can be. But junk foods are harder to define as luxuries since some poorer working families, if they want convenience, may consider it difficult to find cheaper alternatives to feed themselves with something filling. This is why some consider such taxes as discriminatory.
But is discriminating against obese people acceptable – like asking morbidly-obese passengers to purchase plane tickets for two seats because they take up more space and weigh more? Not all causes of obesity are just down to hedonic overindulgence though – some diseases or medications can increase the chances of becoming obese. Yet this doesn’t apply to most obese people.
Can we define ‘junk food’ by using a simple measure that’s based on a food’s sugar and/or saturated fat content per weight or volume? It could get complicated fast, which may mean fuzzy loopholes for manufacturers to exploit. We also need to watch out for unintended consequences, like disproportionately hurting small local businesses. Yet certain categories of food that are, on the face of it, easier to define, like confectionery or breakfast cereals, should perhaps be considered suitable for a levy like the SDIL? Stuff like foie gras should certainly be taxed highly, or ideally banned!
Some junk foods are engineered to have addictive properties so perhaps the government should regulate them more greatly – like with cigarettes and alcohol. Junk food producers will however argue that their food isn’t bad in small quantities. They’ll argue that it’s the quantity of all foods and drinks consumed that leads to obesity, not just the calorie-density of certain foods, because gigantic portions of apples would also contribute to weight gain. Yet it’s evident that very few obese people are obese due to consuming too many apples and nothing else(!) There’s something about highly-processed, calorie-dense products.
If only there was a way to tax consumers according to the quantity of junk food they consume (beyond a ‘personal allowance’) instead of buy? But this would be totally impractical to police, even if it could gain popular support(!)
Taxing fat is tricky. Denmark had a ‘fat tax’ on milk, butter, cheese, pizzas, meat, oil and processed foods that contained more than 2.3% saturated fat, but this failed. Cited reasons include how Danes would simply cross the border to buy these products in a neighbouring country to avoid the tax(!) Perhaps this means that a coordinated international effort could make something like this work? But the international community already struggles to cooperate with even grave collective threats like climate change! The tax was also criticised for not being ring-fenced to improve health.
Other countries or local authorities, like Hungary and Mexico, are testing their own sumptuary taxes; and as of writing, they appear to be showing more signs of success. Taxes or bans can work if they’re supported, or backfire if they’re not.
When people hear about ideas such as the SDIL – they need to understand the amount of viewpoints, research and work involved to come to such recommendations. These ideas aren’t just plucked out of the sky one night and then put forwards the next day.
The Carrier Bag Tax in England reduced ‘single-use’ plastic bag use – so taxes can evidently work to optimise long-term societal outcomes (in this case, reducing waste and pollution). Taxes can be pretty rational and effective strategies.
But levies and taxes – and education and more effective food labelling – won’t likely alone be enough to move the needle. Junk food marketing is heavily funded and designed to get people hooked. (Along with stronger regulations here, we could run marketing campaigns that make healthful foods more attractive?) If raising taxes on addictive, unhealthy products isn’t to be perceived as discriminatory against the poor but as looking after them then there must be enough affordable and convenient healthful fruits and vegetables accessible for all, especially for the poorest living in the poorest areas. (Make unhealthy options dearer and healthier options cheaper, perhaps by subsidising leafy vegetables? Well the US government subsidises wheat and corn, which makes up much of the junk food that Americans consume.)
Woof! We will need a multi-angle approach, including both pull and push motivations to reward desired behaviours and punish undesired behaviours, in order to tackle this obesity crisis.
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