Sin taxes work while stealth reformulation success still ‘anecdotal’, says study

In his latest paper​​ – co-authored with Professor W.R. Kenan Jr – it is suggested the few unhealthy eating taxes which have already been introduced showed evidence of success.

However, despite the food industry focusing on calorie reduction, indications of manufacturers reformulating foods to be healthier overall and less “obesogenic”​ are minimal and remain anecdotal.

“One major food industry effort suggests some potential incentives to reduce the calories sold, but indications of a major push toward a less obesogenic and more diabetes preventive diet are minimal,”​ they noted. “The stealth reformulation work remains anecdotal.”​

Experts have previously voiced concerns​​ over stealth reformulation’s potential to work in real life.

The professors said the primary options for improving global diet as it stands are: “Taxation of unhealthy foods and beverages, marketing controls, and front of the package labelling,” ​they said.

Power shift​

In any case, industry now holds the biggest authority over wide-spread healthy eating, whereas previously the power lay in the hands of governments and global manufacturing companies.

A rapid shift in recent years means the key stakeholders are now food retailers, manufacturers (not just global), the restaurant-food service sector and agribusiness, according to the paper.

Government level regulations directly applicable to the food industry are therefore necessary to prevent obesity and type 2 diabetes.

“Evaluations of the impacts of both public and industry initiatives are needed,” ​they said, adding taxation should be supported for: “Sugar-sweetened beverages and other taxes which make unhealthy sugar-rich refined carbohydrate foods relatively more costly.”​

Taxation​

“If the tax is high enough, [there] will be a significant reduction in unhealthy beverage consumption,”​ Professors Popkin and Kenan note. “We have three examples of smaller taxes in the range of 8%–10% in France, Chile, and Mexico, and a higher tax in the city of Berkeley (≈9–14%).”​

However, they said the Mexican sugary drinks tax and the Danish saturated fat tax are the only two levies so far with rigorous evaluations.

Despite being only a 10% tax as opposed to recommendations of at least 20%, the Mexican levy bore significant changes since its January 2014 introduction. 

Preliminary results show a 6% dip in taxed beverage purchasing in 2014 compared with pre-tax trends and a 12% drop by December 2014, the team said.

“All socioeconomic groups reduced purchases of taxed beverages. Reductions were higher among lower socioeconomic households, averaging a 9% decline in 2014 compared to pre-tax trends and up to a 17% decline by December 2014,”​ they added.

The results also show consumers appeared to switch to untaxed beverages during 2014, with a 4% increase in sales mainly driven by boosted bottled water sales.

The Danish levy was so short lived – cancelled out in January 2013, just 15 months after its launch – it is hard to know what long-term impacts could have been. However, the team note that in its short lifespan it did see a large shift in purchasing patterns, the team said.

One study shows​​ sales of butter margarine and cooking oils fell around 10% in the three months following the tax’s introduction.

Taxation debate​

However, not everyone is positive on the idea of food tax.

Accusations the Danish tax led to inflation, job losses and excessive costs for administration are among the criticisms​​, as well as claims it had little effect on saturated fat consumption since shoppers switched to cheaper brands at budget supermarkets.

Experts have also debated the merits​​ of the figures which show reduction in sugar consumption in Mexico.

Despite Mexico’s reported success, the country has now seen increases in Coca-Cola sales above the pre-tax levels, Professor Tom Sanders, Kings College London added.

Imposing sugar taxes for consumers may not be a big driver for companies to reformulate their products for fear of losing market share since prices are already inflated on sugary drinks.

Professor Sanders told FoodNavigator: “Sugar is very cheap as an ingredient. The price increase would need to be substantial to make it cheaper to use sugar free. The marketing of soft drinks often results in huge variations in price at point of sale. You could pay 45 pence for a can of fizzy drink or £1.60 depending where you buy it.”​

Yet, another industry expert argued that: “Any tax on sugar per se, rather than on specific sweet products, would of course put pressure on companies to reduce the sugar content of their products.”​

In any case, the publicity taxation brings at least highlights the risks associated with excessive sugar consumption for consumers, Jennifer Rosborough, campaign manager for Action on Sugar UK told us.

Referring specifically to the proposed UK sugary drinks levy, she said: “(It) should nudge choice and subsequent further reformulation by manufacturers.”​

Source: Best Practice & Research Clinical Endocrinology & Metabolism​

Volume 30, Issue 3, 2016, Pages 373–383, doi: 10.1016/j.beem.2016.05.001​

“Preventing type 2 diabetes: Changing the food industry”​

Authors: Barry M. Popkin and W.R. Kenan Jr.