2 June 2022

Tax on sugary drinks hits sweet spot

Study finds taxes on sugary drinks result in lower sales.

This week, a study published in the Journal of the American Medical Association found evidence that taxes on sugary drinks are associated with higher prices and result in lower sales.

The review commissioned by the World Health Organization, assessed 86 studies. It found the tax was linked to a 15% drop in sales and no negative effect on employment rates. It concluded that further research was needed to understand the effect of taxes on dietary intake and other health outcomes.

More than 45 countries have already implemented a tax or levy on sugary drinks. In New Zealand, many public health groups – including Health Coalition Aotearoa (HCA) and the New Zealand Dental Association (NZDA) – have been calling for a substantial levy on sugary drinks as a priority government action for more than a decade.

Dr Sally Mackay, HCA’s Food Policy Expert Panel co-chair, said a sugary drinks levy not only reduces consumption but also encourages the industry to lower the sugar content of drinks, which has been seen in the UK.

“A levy could be allocated to improving population health, such as funding preschool education and providing healthy school lunches,” Dr Mackay said.

Dr Rob Beaglehole, dentist and NZDA sugary drinks spokesperson, said sugary drinks are the number one source of sugar in the New Zealand diet for those aged zero to 30 and one of the most significant risk factors for tooth decay, obesity and type-2 diabetes.

“The Government needs to act now and introduce a sugary drinks levy to tackle one of the commercial determinants of tooth decay – the sugary drinks industry,” Dr Beaglehole said.

“New Zealand was once a world leader in public health polices but is now lagging behind the more than 45 countries that have implemented this measure.”

In a 2021 Consumer NZ survey, 51% of consumers supported a sugar tax on drinks to make these products less attractive and reduce the amount of sugar we consume. However, 21% were undecided, 5% had no preference, while 23% were opposed.

Why target sugary drinks?

Sugary drinks are the main source of sugars consumed by Kiwi children and young people. They’re associated with tooth decay, weight gain and obesity. Studies have shown if you shift from a kilojoule-free drink like water to a kilojoule-laden soft drink, you don’t adjust your diet to take account of the extra kilojoules.

There’s also evidence that the sugar in drinks is more harmful than sugar in solid food.

In 2019, a New Zealand study published in the Obesity journal concluded that consuming liquid sugars increased the risk of metabolic syndrome (a group of conditions that increase the risk of heart disease, stroke, and type-2 diabetes), compared with sugar from solid foods.

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Michael T.
07 Jun 2022
SUGAR TAX

Prior to the introduction of GST ''Fizzy drinks" were subject to a tax higher than GST rate consequently "Fizzy drinks" became cheaper.

Grant T.
04 Jun 2022
Grant

Tax parents who pay for these