Industry questions WHO’s conviction about health impact of sugar taxes

Unesda: “Consumers tend to substitute to other non-taxed food categories or to cheaper brands with similar or even higher calorie content, which may undermine any positive health outcome.” [Shutterstock]

This article is part of our special report Reducing sugar consumption: Is taxation effective?.

The industry believes that the World Health Organisation (WHO) has no evidence to back its claim that sugar taxes are an effective way to improve public health. Instead, the industry says, taxes may lead consumers to cheaper brands with similar or even higher calorie content, which may undermine any positive health outcome.

According to Eurostat estimates, 51.6% of the EU’s population (18 and over) was overweight in 2014. The next European Health Interview Survey (EHIS) is scheduled for 2019. The rise of overweight and obesity levels in the EU has raised eyebrows in Brussels, where a number of initiatives have been taken to tackle the issue.

WHO says the taxation of sugar-sweetened beverages “may contribute to a reduction in overweight and obesity”.

EURACTIV has asked the WHO if there is tangible evidence supporting the claim that taxation is an “effective” intervention. However, no specific evidence was provided by the time of publishing this article.

The industry says there is no concrete evidence proving that assumption. At the EU level, the UK, Ireland, Portugal, Latvia and Finland have implemented sugar taxes. The industry also pushes for product reformulation as a successful health intervention tool.

Christopher Snowdon, head of Lifestyle Economics, Institute of Economic Affairs, commented, “If taxes on soft drinks were a pharmaceutical drug, they would never be licensed by a medical authority”.

“The costs are significant while the benefits are wholly unproven. Soft drink taxes might be a good way to raise revenue and a nice way for politicians to feel that they are doing something, but they do not qualify as an anti-obesity policy. They are remarkably ineffective as a way of getting people to reduce their consumption of sugary drinks,” he told EURACTIV.

European Commission spokesperson Anca Paduraru said the EU executive neither prohibits nor encourages member states to decide about taxation of foodstuffs in their territories. But the Commission warns that an individual member states’ taxation policy cannot impede the functioning of the internal market.

“While health issues could be the most important justification for deciding to tax a foodstuff, they cannot be the only justification for taxation,” Paduraru said.

Soft drink makers back product reformulation as ‘healthier’ than taxation

Governments can steer consumers towards healthier choices by supporting the reformulation of food ingredients, rather than imposing “discriminatory” taxes, according to the soft drinks industry.

WHO: Taxation is an option

A WHO spokesperson insisted that implementing a tax on sugar-sweetened beverages (SSB) is a policy option to support a reduction in consumption of free sugars in accordance with WHO Guideline on Sugars.

“WHO has issued evidence-based guidance on the benefits of using such taxes to reduce consumption of SSBs,” the WHO official said.

The official continued saying that in the current food environment, it is very easy to consume too many free sugars. SSBs are a major source of free sugars in the diet, especially amongst children and adolescents.

“Evidence from Europe and worldwide shows that when countries introduce taxes, purchase and consumption of SSBs goes down, industry reformulates to remove sugar, and awareness of the health harms of excess sugar intake goes up – thus contributing to the prevention of obesity and diabetes,” the official said, adding that taxes can also cut healthcare costs and increase revenues to invest in health services.

Asked about the effectiveness of products’ reformulation, the official said it was one of several public health interventions that could bring positive results.

“Government reformulation strategies that are ambitious in scope, accountable and highly managed with specific, time-bound targets have been shown to improve the composition of foods and dietary intake.”

“The policies should be seen as part of a suite of policies required to ensure a comprehensive response to obesity and unhealthy diets,” WHO emphasised.

Food reformulation

On the other hand, the industry has expressed doubts about the existence of concrete evidence proving that sugar taxation has a positive impact on health.

According to a study commissioned by the European Commission, taxes on high sugar, salt and fat products can reduce their consumption but not necessarily the consumption of the targeted ingredients, and can even increase the consumption of other products

“Product substitution has important implications for the total health effects of food taxes because a food tax aimed at reducing consumption of one product or ingredient, may in fact increase consumption of other products,” the study emphasised.

The industry says it has already achieved a 12% sugar reduction between 2000 and 2015 and it has made an additional 10% framework commitment across Europe.

“We note an increasing number of pledges from national beverage associations recently in Greece but also in Spain, Malta, the Netherlands, Portugal, and the UK. We expect several others to follow in support of government-led sugar reduction initiatives and are confident that we are on the right track to deliver on our commitment by 2020,” Unesda, the European trade association representing the soft drinks industry, told EURACTIV in an emailed response.

Asked if reformulation has affected the taste and eventually, the consumers’ choices, Unesda said that if reformulation and sugar reduction lead to taste changes that are too radical, there is a risk that consumers may just switch to other beverages and continue to consume the same or even higher levels of sugars.

Unesda says that “discriminatory” food and nutrient taxes have been implemented in some member states “arguably to pursue health objectives despite the lack of evidence that such taxes are effective or have any positive impact on consumers’ health”.

“Consumers tend to substitute to other non-taxed food categories or to cheaper brands with similar or even higher calorie content, which may undermine any positive health outcome.”

Referring to the McKinsey Global Institute ‘Overcoming Obesity’ report, Unesda noted that reformulation and portion control was by far the most cost-effective intervention.

“We will achieve [our commitments] through four key levers: reformulation of our existing products; introduction of new no/low sugar products; introduction of smaller pack sizes and placing promotion behind no/low varieties to encourage consumer choice,” Unesda concluded.

Consumers question self-regulation

For BEUC, the EU consumer organisation, the reformulation of current products is a “crucial measure” to offer healthier foods and reduce high levels of ‘nutrients of concern’ such as fat, salt or sugar.

However, Emma Calvert, BEUC’s food policy officer, criticised the self-regulation system, under which the industry sets its own goals on a voluntary basis.

“This means that we are relying on the food and beverage companies themselves to take action even though there is no consequence for their competitors should they opt not to reformulate. Unsurprisingly, the results have been disappointing with wide variations within product categories,” Calvert told EURACTIV.

“In 2016, an EU food platform agreed to a 10% reduction target in added sugars by 2020 in 11 key product categories. Nearly two years later, however, this process has seemingly ground to a halt with only one industry committing to reaching the target,” she added.

Positions

Christopher Snowdon, Head of Lifestyle Economics, Institute of Economic Affairs, noted, “When asked to give a single example of obesity rates falling as a result of soft drink taxes, campaigners tend to mumble something about there being 'no silver bullet' for obesity and the need for a 'whole systems approach' encompassing a slew of other untested policies."

"This is a straw man. Nobody expects any single policy to eradicate obesity, but it is surely not asking too much for soda taxes to reduce obesity by a measurable amount, especially given that the financial burden they impose on consumers run into the millions of dollars," he added.

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