It’s almost 12 months since the UK announced plans to introduce a tax on sugar-sweetened drinks. “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',” said the finance minister George Osborne last March.
Osborne has since moved on, but his policy has stuck – it was included in both the childhood obesity strategy and December’s Finance Bill. The controversial move also gave politicians in Ireland fair reason to follow suit: “Given the highly integrated nature of the UK and Irish soft drinks markets in terms of production and supply, similar structures and timings may be beneficial,” the government noted in September.
“Political posturing”, the Irish Beverage Council called it, whilst in the UK industry groups launched a campaign to “can the tax”. “Tackling obesity requires a more serious holistic approach than political ‘quick fixes’ such as taxes on sugary drinks,” said a spokeswoman for FoodDrinkEurope. It’s a fair point. However, it appears the genie has been well and truly let out of the bottle: companies across Europe are now staring enforced reformulation in the face.
Belgium, Bulgaria, Denmark, France, and Portugal have all increased or introduced taxation on certain foods and drinks in recent years. “I wouldn’t be surprised to see the tax applied in other EU countries – both as a tax-gathering exercise and to reduce sugars intakes at a population level,” a senior industry source told FoodNavigator. But will any of these reach further than soft drinks?
The UK’s obesity plan laid down targets to reduce sugar by 20% in nine food categories – these are voluntary but with a threat of regulation should there be little or no progress. Apparently, the tax on sugary beverages is “the start of the conversation”. Traditionally, however, governments tend to have a bark that’s bigger than their bite when it comes to regulation on food. The watering down of the UK’s obesity plan is a recent case in point, whilst a tax on sugar in Italy has gained nowhere near enough support to concern industry.
Scotland could be next in line: politicians in Holyrood, cajoled by their advisors at Scotland Food & Drink, are talking up the possibility of tough policies to curb obesity but “they might not get very far”, claimed one observer.
Indeed, additional taxes on food and drink when prices are rising are not a vote winner. There’s also a big question mark over whether these Pigouvian taxes – at least on drinks – actually work. “In most locations where it has been tried the reduction in calorie intake has been marginal – around 5kcal a day – and consumers have traded down a level from premium to basic or to another high sugar non taxed product,” explained Dominic Watkins, head of the food group at law firm DWF.
“To be effective, a soft drinks tax would need to be much higher than 20%,” added Jack Winkler, emeritus professor of nutrition policy at London Metropolitan University, “and I suspect that would be politically difficult in most EU countries.”
The alternative argument, of course, is that the soft approach aimed at nudging consumers in the direction of healthier products and diets isn’t working either. Even industry recognises the limitations of nudge theory. “Nudging consumers is one way to 'guide' consumers to healthier behaviours, but it is not sufficient per se,” said FDE’s spokeswoman.
Part of the problem is that it’shard to know how far and in which directions reformulation has gone.“Much of it is done ‘unobtrusively’,” explained Professor Winkler. “That is, incrementally, imperceptibly and invisibly. Which is to say in a series of small reductions, with sensory testing in advance not to shock established customers, and without health claims.” This has also left the more progressive firms without the credit they deserve, he added: “Heinz and Coca-Cola, for example, have extensive reformulation programmes, which have made substantial nutritional progress, but they receive little recognition, much less praise, for this work.”
Nestlé is one of the few firms to have spoken publicly about the need for a strictly regulated EU nutrition framework. In an interview with FoodNavigator last year, the company’s assistant vice president for relations with European Institutions Bart Vandewaetere, admitted how hard it is becoming to introduce new products with less sugar that meet consumer expectations when competitors are not all reformulating as deeply or as quickly. Consumers have become accustomed to sweet tastes, he added, and it will take “bold steps” to overcome that.
Food companies have led consumers down this sugar-laden path, of course, and it is not proving easy to coax them off it. “What’s needed is a shove, not a nudge,” said Tim Lang, professor of food policy at City University. “That requires a systems change [and] I don’t see this being done below the radar.”