The obesity epidemic and sugar-sweetened beverages: a taxing time

Government action is essential to improve diet

Obesity is a major and costly public health epidemic, and an Australian national health priority that requires urgent action. While obesity is a complex condition with many contributing factors, a relative excessive kilojoule intake is a major driver of weight gain. Sugar-sweetened beverages (SSBs) contribute to this excess energy intake in children and adults, are linked with obesity, diabetes and dental caries, and are an increasing focus of public health attention.

The World Health Organization guidelines recommend reducing the free sugars intake in adults and children to less than 10% of the total energy intake, and to less than 5% for best health outcomes.1 Half of the Australian population, almost 75% of people aged 9–18 years and 35% of people aged 51–70 years exceed the WHO recommendation.2 In 2011–12, Australians consumed an average of 60 g of free sugars per day (equivalent to 14 teaspoons of white sugar), with 52 g (12 teaspoons) coming from added sugars consumed through energy-dense, nutrient-poor discretionary foods and beverages.2 Males aged 14–18 years averaged 92 g (21 teaspoons) of free sugars daily, with 10% consuming 160 g (38 teaspoons), equivalent to 23% of their daily energy intake.2 Over half of free sugars come from SSBs, led by soft drinks and electrolyte and energy drinks.2 Australia is among the highest global markets for SSBs and in 2011–12, 47% of children and 31% of adults consumed them. The average daily SSB intake in male consumers aged 4–30 years was 750 mL (equivalent to two standard cans).3

Proposed regulatory interventions to reduce SSB consumption include increasing taxes, limiting advertising, health warning labelling, and reformulation to reduce sugar content. Among these, an SSB tax has received the most attention and has been implemented in a number of countries, amid strong support and equally strong opposition. So is it time to introduce an SSB tax in Australia?

Health harm

Accumulating evidence supports a substantial risk of weight gain, diabetes and dental caries with increasing consumption of SSBs. In initially non-obese adults, each daily increase of one 355 mL serving of SSB was associated with 0.5 kg greater weight gain every 4 years,4 and women with high SSB consumption gained 5.0 kg more over 8 years compared with women who decreased their SSB intake.4 Health harm of SSBs equates to 8.5 million disability-adjusted life years worldwide through adiposity-related cardiovascular diseases, cancers and diabetes.5 While this evidence is challenged by some, conclusions on SSB health harms are associated with disclosure of conflicts of interest, with authors sponsored by food companies being five times more likely to conclude no association between SSB consumption and obesity risk (in children) compared with those without industry sponsorship.6

Individual not government responsibility

A key philosophical argument centres on the consumption of SSBs as being a matter of individual choice, and regulatory intervention fostering a nanny state. However, if followed logically, such thinking calls into question government intervention to control tobacco and alcohol or promote road safety through seat belts and speed restrictions. Government intervention in these areas is often justified on the basis of limiting personal behaviours that may harm others, but there are many examples of current interventions, particularly in children and adolescents, which are implemented to protect the person, rather than to protect others. Individual rights can be equally violated if government fails to take effective and proportionate measures to remove health threats from the environment in the cause of improving population health.7 Government pays for health services and consequently has a right and duty to address externalities to promote and protect public health. Moreover, government intervention on health risks, including foods, can be justified from an economic perspective when the burden of diseases is mostly paid by society. Finally, how much autonomy do we really have in our food choices? There are numerous examples of these choices being constrained through the industry actions. Over many years, food manufacturers have increased the size of a standard SSB drink by about three-fold, knowing that larger containers alter the norm of an appropriate portion size and increase consumption.8

Opposition to taxing food is also framed in the context that food is not uniformly harmful, unlike other public health threats. In this respect, an SSB tax is best compared with alcohol taxes, since alcohol is also not uniformly harmful, with health harm related to heavy or excessive consumption, while limited consumption may pose little health risk.

Effects of an SSB tax

An SSB tax aims to encourage a healthier diet by reducing SSB consumption and promoting a shift to untaxed healthier substitutes. It may also incentivise industry to reformulate to reduce SSB sugar content. A number of countries have introduced an SSB tax. The United Kingdom intends taxing SSBs from 2018, and the Australian Greens Party committed to an SSB tax in the 2016 federal election.

Taxes are an effective public health strategy for reducing consumption and are commonly used in tobacco and alcohol control. Introduced in January 2014, Mexico’s SSB tax resulted in a 6% decline in purchases of taxed beverages over 2014 compared with pre-tax levels, reaching a 12% reduction in December 2014. This was accompanied by a 4% increase in purchases of untaxed beverages, mainly bottled water.9 The ongoing impact of this tax has been challenged with new data suggesting a small increase in sales of SSBs in 2015, but still lower than the increase in pre-tax sales. This has been reported as “a bright spot for an industry that has feared it could be cast as the next tobacco”.10 Arguments that an SSB tax is an ineffective means to reduce consumption are inconsistent with food industry claims of potential damage and job losses, which instead may point to the industry believing that a tax would substantially impact consumption.

There are concerns that an SSB tax will unfairly disadvantage lower socio-economic groups, who will continue to consume SSBs, but pay more. A recent review found the monetary impact of an SSB tax to be small, with relatively minor differences between higher and lower income households.11 The analysis of the Mexico tax found that while all socio-economic groups purchased fewer taxed beverages, the reductions were higher in low socio-economic households.9

The potential impact of an SSB tax has also been challenged on the basis that consumers will substitute SSBs with cheaper and equally unhealthy options. There is little direct evidence on substitution, and data rely on models based on self-reported consumer purchase information and price elasticity. As exemplified by Zhen and colleagues,12 overall, these studies find a reduction in energy intake and weight, with no evidence of substitution with other sugary beverages, but almost half the reduction in SSB calories may be compensated for by an increase in fat intake.

In favour of a tax are the combined health and fiscal benefits, with revenue hypothecated for promoting healthy lifestyles and obesity prevention and care. Opinion polls suggest greater population acceptability of food taxes when the health benefits are emphasized and the use of the revenue is directed to health-promoting programs.13

A recent Australian study, which modelled the long term effects of an additional 20% SSB tax, reported significant benefits on health and a reduction in health expenditure.14

The way forward

Obesity is a major health problem impacting individuals, families and society. With two in three Australians being overweight or obese, current preventive interventions centred on education to encourage voluntary individual action have failed in our pervasive obesogenic environment. Food products such as SSBs were not primarily developed to cause harm, but when harm is demonstrated, it is often denied or challenged by those with vested interests. The excessive consumption of SSBs — a high energy-dense discretionary food with no nutritional benefit, which can harm health — cannot be justified. Increasing the cost through taxation reduces consumption, no matter the product. An SSB tax alone is unlikely to be sufficient to curb obesity, but needs to be included in a multicomponent strategy.13 This is similar to tobacco control and road safety, where no single measure achieved the desired outcome.

There are considerable challenges to introducing regulatory measures to curb the obesity epidemic. Our complex and multilayered system is often used as an excuse for inaction. Industry opposition is understandable and reminiscent of the opposition to interventions to reduce tobacco consumption. In the face of the powerful industry lobby, governments are reluctant to take a decisive action, opting for ineffective soft options. Voluntary action alone will not solve this problem. There are numerous examples of government health interventions that are accepted by the public, despite strong industry opposition.

Improving the diet of Australians and reducing the intake of discretionary foods, especially those high in added sugars, will require stronger government action and leadership. An SSB tax would send a strong message that government is serious about obesity and the harms of unhealthy diets.

International organizations are increasingly acknowledging taxation as an important tool in tackling unhealthy diets.15 The 2016 report of the WHO Commission on Ending Childhood Obesity recommended implementing an SSB tax.16 It is time for a decisive government intervention, and for Australia to have an informed and comprehensive dialogue on a range of regulatory intervention to deal with the obesity epidemic. An SSB tax should be high on the list of priorities.