Putting a cost on sickly sweet
The Turnbull Government is facing calls to emulate its British counterpart and introduce a tax on sugary drinks in the 3 May Budget as part of measures to reduce the nation’s waistline.
In a move lauded by celebrity chef Jamie Oliver and public health advocates, UK Chancellor George Osborne last month made a surprise announcement that the British Government would impose a sugar levy on the soft drinks industry, taxing them according to how much sugar they put in their products.
Mr Osborne said the measure was being introduced to help tackle child obesity, citing estimates that within a generation half of all boys and 70 per cent of girls in Britain could be overweight or obese.
“I am not prepared to look back at my time here in this Parliament, doing this job, and say to my children’s generation, ‘I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease, but we ducked the difficult decisions and we did nothing’,” the Chancellor said.
Under the tax, set to come into force in 2018, soft drinks with more than five grams of sugar per 100 millilitres, such as Fanta, would be taxed at 18 pence (A34 cents) a litre, and those with more than eight grams per 100 millilitres, such as full-strength Coca-Cola, would be taxed at 24 pence (A45 cents) a litre. Pure fruit juices and milk-based drinks will be exempt.
The British Government expects the tax to raise $A974 million, and will use the revenue to increasing funding for school sports programs.
Mr Oliver said the British move would “travel right around the world”, and called on the Turnbull Government to “pull its finger out” and introduce a similar levy in Australia.
The idea of a sugar tax had been backed by the British Medical Association, which had recommended a duty on sugar-sweetened beverages that increased prices by at least 20 per cent as a useful first step in encouraging the widespread adoption of healthier eating habits.
But so far there seems little appetite for the idea in the Australian Government, and it is meeting stiff resistance from the beverage industry.
Coca-Cola is among a group of companies planning to sue the British Government over the tax, and parent company Coca-Cola Amatil told The Age that the measure would be ineffective in combating obesity.
The company said a sugar tax was “not the solution to this complex problem”, arguing that obesity was increasing despite a 26 per cent decline in per capita sugar contribution from carbonated soft drinks.
However, while not explicitly calling for a sugar tax, the AMA has nonetheless said that taxation should be among the instruments used by the Government to help people make healthier food choices.
There is evidence that a levy on soft drinks can change consumer behaviour. When Mexico introduced a 10 per cent tax on sugary drinks three years ago, sales fell 6 per cent.
But critics, including the beverage industry, claim that it has just shifted the problem, with consumers looking for their calories elsewhere, such as in fruit juices or sweetened milk-based drinks.
The AMA has cautioned against a focus on any one single nutrient or aspect of diet, and said tackling obesity would require a broad range of measures that may include a price signal such as a tax, but should also involve action to reduce the exposure of children to the advertising and promotion of unhealthy foods in general – not those only containing added sugar, but also those high in saturated fat and added salt.
It has made a submission to Free TV Australia, the peak television industry group, highlighting concerns about the marketing of unhealthy foods to children during broadcasts and called for designated child viewing times to be increased and restrictions on advertising of processed foods at peak viewing times, such as live sports broadcasts.