Proponents of using a sugar tax to limit consumers’ intake of sugar say it can effectively reduce people’s purchase of sugar-sweetened beverages, force the food industry to reformulate to avoid being overtaxed, and raise taxes for the government. Opponents argue that there is no solid evidence that it works, and that consumers may switch to other junk foods, with economic consequences.
“Sugar tax” is one of the hot topics discussed by governments around the world in recent years. Whether it is called “Sugar-sweetened beverage tax” or “Soda tax”, their essence is the same: “With Taxes are used as a means to increase the price of carbonated beverages, energy drinks and even juices, thereby inhibiting consumers’ purchase behavior.” In addition to increasing taxes, the main reason for the government to do this is to combat a common global problem: the growing Obesity, diabetes, tooth decay and other diseases.
From 2018 to 2019 alone, countries such as the United Kingdom, Ireland, South Africa, Malaysia, and Oman have joined the ranks of sugar tax collection. In countries such as Norway, Thailand, and Panama, which began to levy sugar taxes before 2018, they have further increased their tax rates. In 2020, Italy is also expected to start implementing a sugar tax policy.
The regulations on sugar tax vary from country to country, but there are generally two approaches:
1. Proportional taxation: Generally, it starts from at least 8–10%. The United Arab Emirates (UAE) will impose a 50% tax on carbonated drinks and 100% on energy drinks from 2020.
2. Taxation is based on different units such as per milliliter and ounce: for example, Malaysia levies MYR 0.4 per liter, and Norway levies 7.05 NOK per kilogram.
Sugar beverages linked to worsening health! But can a sugar tax really help?
In 2016, the World Health Organization (WHO) called on all sectors to pay attention to the application of policies such as taxation and increase the retail price of sugar-sweetened beverages to help consumers change their dietary choices and further improve obesity, diabetes and tooth decay. At the time, Douglas Bettcher, director of the WHO’s Department of Chronic Disease Prevention, said that “excessive intake of free sugars through products such as sugar-sweetened beverages is the main reason for the rise in obesity and diabetes in the world.” In addition, there are many studies showing that Consumption of sugar-sweetened beverages increases the risk of diabetes, heart disease, cancer, etc., and is also positively correlated with increased mortality. Health factors make sugar a target of criticism.
Although the essence of the sugar tax is well-intentioned, its actual effect has always been full of controversy. Whether it is the government, business organizations or the private sector, there are continuous debates and studies on whether to levy a sugar tax.
Supporter: The sugar tax not only changes consumer behavior, but also allows the industry to revise the formula on its own initiative!
Those who support the sugar tax do so because they believe that it can effectively reduce the probability of people buying sugar-sweetened beverages and further reduce their calorie intake. In 2014, Mexico introduced a 10% tax on sugar-sweetened beverages. Since its implementation, sales of sugar-sweetened beverages by low-income households in Mexico have been reduced by 12%, while high-income households have reduced by 5%, and tax revenue has increased by 23.2 billion pesos each year. In Chile, which also pushed for a sugar tax in 2014, a study found that monthly purchases of sugar-sweetened beverages fell by 21.6 percent overall.
In addition, proponents argue that a sugar tax can force the food industry to reformulate to avoid being overtaxed, and that the government can increase tax revenue, which can be used for public health programs such as health care and health care. Coca-Cola in the United Kingdom adjusted the sugar content of its beverages and released low-sugar or sugar-free versions, such as Sprite’s The amount of sugar dropped from 6.6 grams to 3.3 grams, Qixi from 10 grams to 7 grams, and Fanta from 6.9 grams to 4.6 grams. In addition, “Coca-Cola Zero”, which was originally advertised as sugar-free, increased its overall sales by a full 18.5% within 3 months after the sugar tax was implemented!
Opponents: The sugar tax instead drives people to buy other junk food and even affects the economy!
However, there has been no shortage of opponents to the sugar tax policy, who believe that there is currently no conclusive evidence that the sugar tax is effective, because it is difficult to prove a causal relationship between changes in consumer behavior and the sugar tax. After the sugar tax was introduced in the United Kingdom, the market research company Nielsen conducted a poll on the views of local people before and after the implementation of the sugar tax. The result showed that 62% of the people said that the sugar tax did not affect their consumption behavior. 11% of the public had said they would stop buying sugar-sweetened beverages after the tax law was implemented, which also dropped to just 1%.
Yale University in the United States also published research results in “Contemporary Economic Policy” in 2011. They analyzed the relationship between sugar taxes and national body mass index (Body Mass Index, BMI) in various regions of the United States from 1990 to 2006. ), and found that the sugar tax can indeed change BMI, but the effect is minimal, because the tax rate rises by 1%, and the average BMI of the people drops by only 0.003. Even if the tax rate is adjusted to 55%, it may have a greater impact on the national weight, but it is difficult to completely prevent the expansion of obesity.
Another reason opponents argue that a sugar tax is ineffective is because even if sugar-sweetened beverages rise in price because of the tax, consumers can still switch to buying junk food that isn’t taxed. The University of Glasgow in the United Kingdom conducted a survey of 132,479 people in 2016 and found that reducing sugar as the main means of fighting obesity in the world would be misleading to the public, while ignoring the importance of reducing calorie intake such as fat.
On the other hand, the sugar tax is also believed to have an impact on the economy. Many could lose their jobs as the sugar tax increases costs by forcing producers to reformulate, causing them to lower costs elsewhere. At the same time, in Europe and the United States and other places, in order to buy cheaper drinks, people will go to the cross-border to buy from places where there is no sugar tax. Denmark, which has implemented a sugar tax since the 1930s, announced its abolition in 2013, which the government said was aimed at creating more jobs and making up for losses from cross-border transactions.
Sugar reduction is important! Besides sugar tax, what else can be done?
With the awakening of health awareness, sugar reduction has now become a global trend, but should it be promoted by national regulations? What is involved in this issue is not only the struggle between the government and the industry, but also the interests of the general public.
Taking Singapore as an example, in 2018, the country solicited opinions from the public and the industry on whether to impose a sugar tax and other four major market intervention measures, including “imposing a sugar tax, banning the sale of high-sugar beverages, advertising restrictions and mandatory printing of nutrition labels”. Singapore became the first country in the world to ban the advertising of high-sugar packaged beverages in October 2019 because of the support of 70% of the public for the two measures of advertising and nutrition labeling. The ban covers TV, radio, newspapers and the Internet, and soft Sexual beverages, fruit juices and instant coffee are all affected. In terms of mandatory nutrition labelling, beverages with moderate to high sugar content will be labelled “unhealthy”. The Singapore government also said that a sugar tax and ban on high-sugar beverages could still be implemented in the future.
Although Singapore is not the next country to impose a sugar tax, it still regulates sugar-sweetened beverages with the support of the majority. In recent years, Taiwan has repeatedly discussed whether to impose a sugar tax. Wang Yingwei, director of the National Health Administration of the Ministry of Health and Welfare, said in May 2019 that the National Health Administration had held many meetings on whether to impose a sugar tax. Large-scale beverage companies have a single market and better management; while Taiwan’s boom in hand-cranked beverages may lead to difficulties in implementation.
At a time when it is difficult to formulate complete supporting measures, can Singapore’s practice become a reference for Taiwan? On the premise of maintaining consumer health, in addition to discussing the possibility of mandatory restrictions, teaching consumers to understand the harm of sugar to the body and know how to make smart and healthy choices on their own is also a way that cannot be ignored.