The impact of sugar tax on obesity in Ireland
Introduction
High sugar intake leads to an energy imbalance and increased levels of populations becoming overweight or obese. (Stanhope,. 2016) shows a clear association between the increased consumption of sugar and an increase in the risk of metabolic disease, weight gain and obesity. Weight gain is a major cause for health concerns worldwide. As weight gain increases so too do incidents of diabetes and cardio vascular disease as well as many other health issues (Hu et al,. 2010). The number of overweight and obese individuals has doubled in the last twenty years (Nomaguchi et al,. 2017). Ireland has followed the international trend of extensive weight gain among its population. Over half the adult population in Ireland is overweight or obese. The rising weight gain is across all age groups with one in four children aged nine years being overweight (Doherty et al., 2012). The cost of increased weight gain on health care systems worldwide has caused governments to seek policy change. Introduction of health based taxes have been proposed and initiated globally. Taxes have been introduced in the attempt to reduce consumption of disease related foods such as sugar and fat (Nomaguchi et al,. 2017). The Irish government have recently introduced the idea of a sugar tax of 10% on sugar sweetened beverages (SSB). This proposal has been introduced with an aim of reducing sugar intake, while also generating financial benefits. SSB’s are the chosen food source for the tax as they are energy dense and have been suggested to have a lead role in obesity (Bucher Della Torre et al,. 2016). The possible impact of this tax must be explored. If the introduction of a sugar tax on sugar sweetened beverages is to come into place in Ireland it must be examined how the tax will impact the consumers of Ireland will be explored by answering questions related to the topic. Why is this tax needed in Ireland? Why is the tax only related to sugar sweetened beverages? Who will the sugar tax target? Will the pass on rate to consumers have an impact on the success of the taxation? How will success of the tax be measured? Studies based on areas with sugar tax already in place will be examined and the impact of the tax discussed.
Discussion
• Why is a sugar tax needed?
Obesity rates are increasing. Populations are fatter and unhealthier now more than ever before. Obesity is an illness which leads to many other diseases and health implications.
Obesity is a preventable, diet-related disease which results from an unhealthy lifestyle. Non communicable diseases (NCDs) such as obesity, heart disease, diabetes and cancer cost billions every year. These NCDs can be attributed to diet factors such as lack of fruit and vegetables and excess consumption levels of sodium, SSB’s and saturated fats
(Niebylski et al,. 2015). As general health of the public decreases, costs increase. Economies are crippling due to the increased financial strain on health care systems (Niebylski et al,. 2015). Obesity also leads to higher health insurance costs, reduced productivity and reduced tax revenues (Lin et al,. 2010). The cost of obesity on the state is ever growing and structures must be put in place to counteract both the financial and medical costs. Medical bodies have advised governments to tax nutrient poor, energy dense, foods and beverages to as a response to the rise in childhood obesity (Lin et al,. 2010). Brownell et al,. (2009) suggests that taxes would reduce SSB consumption, improve health and diet and generate revenue, which can be redirected to aid in the fight against obesity.
• Why tax Sugar Sweetened Beverages?
Sugar sweetened beverages have a high sugar content with no nutritional value. Sugar from SSBs does not need to be digested or broken down like that of food, it is readily available and overloads the organs when ingested in high quantities. Throughout numerous studies in the area of SSBs there has been constant association with several illnesses. The high sugar content leads to an excess energy build up. This energy is stored leading to weight gain. SSBs also damage teeth and cause sugar imbalances leading to metabolic illness. Briggs et al,. (2013) describe some of the ill effects of SSBs such as dental decay and type-2 diabetes. The link between SSB consumption and obesity is well recognised (Keracher et al,. 2017) ,with Buhler et al,. (2013) highlighting evidence directly linking SSBs to serious, life altering diseases. The addition of the SSB tax is expected to lead to a reduction in consumption of these beverages with substitution of a healthier alternation, leading to a reduction in calorie consumption. SSBs are only one of many substances that has been linked with weight gain. SSBs present a far more taxable product than numerous other energy dense foods. SSBs have relatively low prices, allowing for taxation to increase prices to closer their social cost. In recent decades SSBs inflation adjusted price has gone down, rather than increased like that of foods such as fruits and vegetables. Hagenaars et al,. (2017). SSBs are also easily monitored and regulated in comparison to foods of high sugar content. In Ireland the consumption of SSBs if quite low in comparison with other countries, this may be reason to consider broadening the range of unhealthy foods being taxed rather than solely focusing on SSBs (Briggs et al,. 2013).
• Who will this tax impact?
The proposal of a sugar tax on SSBs has been described as a regressive tax as it is going to affect those households of lower income rather than higher. The consumption of SSBs is highest amongst those with a lower financial status. The increase in beverage price will not stop consumption, as prices rise, those with the lowest available income will have even less to spend. This leaves these consumers with less money to be spent on health promoting products such as fruit, vegetables and exercise (Greener et al,. 2017). Although it can be argued that as consumption is highest amongst this group, they may befit from a reduction in intake due to a price increase. Madden, (2016) criticises sugar and fat taxes, describing them as regressive and having an adverse impact on poverty. Briggs et al,. (2013) also state that the impact of the tax would mostly affect young adults and people from lower income backgrounds. Consumption of SSB is highest amongst young adults but will not have any influence on the majority of the population. The National Adult Nutrition Survey (2011) suggests that only 37% of the population are regular consumers of SSBs, meaning that 63% of the population will not be affected by this tax. This further suggests the need for a broader tax on other products. Publicans will also be greatly impacted by the predicted loss in consumption of SSBs leading to an overall loss in sales and revenue.
• How will success be measured?
In order to identify if the introduction of the tax on SSBs have been successful it must be stated clearly how will success be measured. Numerous studies have described success of the tax as a decrease in SSB intake among consumers which should in turn lead to a decrease in calorific intake and an overall decrease in weight gain and obesity. Levels of consumption can be easily monitored and assessed in comparison to those of calorie intake and weight gain as a reduction in weight gain is a far slower and complex process with many other confounding factors. The reduction of SSB sales may not directly correlate to a drop in calorie intake as beverages may be substituted for energy dense drinks outside of the tax such as dairy products and fruit juices (Jou,. & Techakehakij,. 2012). These beverages are high in calories but are outside of the taxation due to the health benefits of such foods and their inclusion in the food pyramid. Dharmasena and Capps, (2012) also predict a rise in consumption of high fat milk drinks as a compensatory beverage. Fletcher et al,. (2010) suggests this will have a negative impact on the potential of the tax to lead to a reduction of obesity. This highlights the need for a the development of a more extensive tax which targets all energy dense, high calories drinks included dairy and fruit juices. While the tax may be based on benefitting health, the generation of revenue is also a key factor. The success of levy may be considered as the revenue gathered. This is a solely financial success and has no regard for the changes in the health of the public. Health related tax such as this are accepted more when the use of the money is clear to the public, The UK has declared the money raised by the tax on SSBs will be put towards sports in schools. If there is no direction for the funds raised the public are often more hostile to the taxation. If the funds raised are used to a health benefitting way, this too may add to the success of the taxation.
• What impact will the pass on rate to consumers have on success?
How much money will consumers actually pay?
The pass on rate of the imposed taxes from SSB companies to consumers is a huge factor. If the tax cost is covered by the SSB producing company, there would be little effect on prices in the shop for the consumer. This in turn will cause the tax to merely become a revenue generating scheme having no influence on the consumption of SSBs amongst consumers or the expected health benefits. In order for there to be an impact on the consumption of SSBs, the consumer must see an undesirable price increase with the product. Hagenaars et al,. (2017) explore the pass on rates of country’s which have implemented sugar tax’s. In both France and Mexico close to the whole tax was passed on to consumers, where the reduction in consumption has also fallen. This demonstrates that the pass on rate is an influencing factor on the success of reducing consumption rates.
• Is this tax removing personal freedom?
The introduction of this tax will influence the availability of the product to a number of consumers. This control over the consumers has led to the tax being termed a restriction on personal freedom and the choice of the consumer. Hagenaars et al,. (2017) declares that such a tax is regressive and restricts personal liberty. The introduction of such a fiscal levy has led to the terming of countries with the tax a ‘nanny state’, where the government control the publics behaviours and restrict choices. Greener (2017) also suggests that the introduction of sugar tax is an attempt to control society and feels there would be a greater benefit in educating the public rather than restricting their choices.
• Is there proof of success of taxing unhealthy foods and beverages?
In countries such as Ireland the idea of a sugar tax is a new idea but ill health causing related taxes have been present on alcohol and tobacco for years. Hagenaars et al,. (2017) highlights the success of taxing tobacco and alcohol. Sassi et al,. (2013) also describes this taxation as effective in reducing consumption and increasing revenue. The reduction in consumption of these products has shown a clear link with an increase in health and a reduction in associated illnesses. Numerous countries have introduced such fiscal measures on foods which have negative health effects. Denmark pioneered a saturated fat tax. While Finland, France, Hungary and Nauru, among others have taxed sweet and sugary products. Hungary includes the widest variation of products. Berkeley, California and Mexico have introduced a levy on SSBs. Mexico has been a positive example for a successful reduction in the consumption of SSBs, and also a reduction in weight gain. Colchero et al,. (2016) examined SSB sales before and after the introduction of the sugar tax. In the first year, sales were cut by 12% with a drop of up to 17% in the lower income households. This reduction is the same as the average person consuming 4.2L less in the year. This had a considerable effect on calorie intake, in particular among children. Niebylski et al,. (2015) carried out comparative studies on the regions where the levies have been implemented, noting an increase in the consumption of healthy foods and a decrease in sales of those taxed. The rise in healthy eating may also be due to the confounding factor that the funds raised by the excess charge was used to educate people and promote healthy living. Briggs et al,. (2013) estimated the impact of the SSB tax in Ireland and predicted 9900 fewer adults with obesity due to the sugar charge. The study also finds that results should be similar throughout the various income groups . Overall the findings suggest that the tax would have a small but meaningful impact on reducing calorie intake and weight gain. The reduction in health care costs will not be immediate as often obesity complications are most dominant in older ages. Nomaguchi et al,. (2017) found that in all areas where a health related tax had been implemented there was a notable increase in productivity.
Conclusion:
Throughout the studies where implementation has taken place of a tax on sugar, in particular sugar sweetened beverages, a positive impact on reducing the number of calories consumed by the public and in turn reducing excess energy intake, weight gain and obesity is observed. The choice to specifically target SSBs is due to the fact that they are energy dense with no nutritional value. SSBs high sugar content is linked to growing obesity rates and consumption is highest among young adults and low income families. The introduction of an SSB tax in Ireland is estimated to result in a minimal reduction in calorie intake but would affect less than half the population, this highlights the need to review the tax and broaden the taxed products to include fruit juices and dairy products which would otherwise be energy dense alternatives (Greener,. 2017). The pass on rate of the proposed 10% tax to the consumer will have a considerable impact on the success rate in reducing consumption. If the pass on rate is not close to 100%, little change can be seen. The generation of finance is another key aim of the sugar tax, the money generated is excess revenue for the government to put towards the development of nutrition education, which will also benefit the health of society. Overall the impact of the sugar tax is minimal but may contribute to a reduction in obesity as part of a wider plan. The need for nutritional education and an increase in rates of exercise are essential confounding factors on obesity rates, the sugar tax will not have a considerable impact in isolation.