Sugar tax back on the radar

Sugar tax back on the radar

With sugar tax back in the news it makes a nice change to not be talking about Brexit! An early morning appearance on Radio 5 Live today it left me thinking and with some more to say on the topic…

Today, the Government announces its Childhood Obesity Strategy and neither side of the debate is happy. The central measure remains the sugar tax, which history says won't work yet those in favour of taxation blast the broader measures as being weak.  They criticise amongst other things there being no advertising restrictions – ignoring the fact we have had restrictions for years.

This is all set against a backdrop where industry has already reduced the level of sugar in soft drinks by 16% in the last four years and has pledged to reduce by 20% by 2020 and roughly 60% of all soft drinks are already zero or low calorie. So, it is clear that industry is already taking this very seriously and taking action.

A simple equation?

What I think everyone agrees on is that action needs to be taken on obesity. But, simply taxing us clearly isn't the solution.  What is needed is a far more holistic approach.  Taken simply the solution is to just adjust the basic equation to get to a point where, energy in is equal to or less than energy expended. 

Clearly life is not that simple, and in part this is why a sugar tax won't work as it cannot be empirically proven to reduce energy 'in' in any material way. The French experience of a similar tax is that it had a short term reduction in consumption followed by a return to historical levels – probably as people substituted to other either cheaper products in the same category or a different product with a similar sugar profile.  Even the lauded Mexican example has been shown to only have an impact of reducing sugar by 6 calories in a diet of about 3000.  It’s a drop in the ocean and certainly not the golden bullet.

So what to our model? Well, if the independent research conducted by Oxford Economics is right then a sugar tax in the UK would result in a reduction of about 5 calories, something but clearly not a solution. And, worse, at this time of great economic uncertainty it'd cost £132m to the economy, about 4000 jobs and circa £1b in direct costs to consumers in year one.  A very heavy price for 5 calories each.

Taxation alone can't work and I remain very sceptical that there is any economically justifiable reason for it – let alone legally justifiable one.

Bigger picture approach

On one level I was pleased to finally see some focus on the 'energy out' side of the equation. Finally the Government is putting an emphasis on childrens sport and education – this is all very positive albeit really too little too late.

Clearly in our increasingly time poor society it is vital to ensure that the coming generations have the skills to understand how to cook healthy nutritious food from scratch. It is also vital to ensure that nutrition messaging is balanced so that it is clear that most things consumer in moderation or from time to time will be ok, provided the rest of your diet is balanced.  This is true of foods both healthy and less healthy – after all if you consume too much water it will eventually kill you… extreme but you understand the point. 

So, let's help parents and the rest of us too. Let's give us all the skills and perhaps things might improve.  Let's make the most of our Olympic hero's success to inspire the next generation to become the next Jason Kenny, Laura Trott or Andy Murray with all the lifestyle, nutrition and sporting prowess that comes with it.

 

Clear messages

It is not difficult to see how consumers get confused about what is good or bad from them. Many foods and nutrients have either been public enemy number one or good from you depending on who was asked or it appears which way the wind was blowing.  Of course it is right that science develops but does anyone really know if fat (some types or all) is good or bad for us any more.  And, what of red wine? Is that really good for the heart? 

So, then what of sugar? Are we concerned of total sugar or free / added sugar?  Last year fruit juices became a pariah yet they were excluded from the Government's Sugar App and are likely to be outside of the tax.  Clearly fruit juice has considerable levels of naturally occurring sugars in it so is this OK – fruit is natural and good for you, surely?  The answer started to appear to be that fruit itself with a skin in an as picked form is but if it is pulped or machined (much like your mouth would do to the original fruit) then it is bad.  I am no scientist but I am a consumer and this is confusing me, so it must others too. Then we learn that if you add water to fruit juice and suddently the product will be taxed based on the total sugars in it despite the fact it is now diluted and has less sugar in the same volume.  Right, OK. I am sure there is some logic for this. But, I am not sure what it is.   Then there the exclusion of milk-based products which begs the question how much milk is required for milk based.  Stepping back that exclusion seems to be in contradiction with the Government's Eatwell Guide which for no logical or apparent reason has halved the amount of dairy recommended in our diets.   My head is hurting.

But, perhaps my biggest bug bear is with the obsession with saying that existing label are not clear enough. Really? So, currently we have (EU) laws which make nutrition labels (including sugar declarations) mandatory from this December.  In the UK we have front of pack traffic light labels, a government scheme, which includes sugars and even tells you if the level is high, medium or low based on the number of grams of sugar against the recommended daily amount.  

So, right now most products will tell you sugar levels twice using a consistent measure, grams. So, because apparently this is not clear enough for consumers the Government's (worryingly inaccurate) Sugar App launched earlier this year decided to use Sugar Cubes.  Who even uses sugar cubes any more?  Now, not content with that it is now being suggested in the government's press release that we should use teaspoons as the front of pack measure.  OK, so how much sugar fits on a teaspoon?  Does it mean a level teaspoon, a heaped teaspoon…  Answers on the back of a postcard please.

This needs to be simple and consistent as otherwise people will just ignore it and do what they think is right.

 

 

The future

We are still two years away from the tax and much still needs to be explored but this new Government really needs to get a grip and make the most of the huge achievements of this summer of sport to inspire children into wanting to emulate their heros and work with industry to help it deliver what it promised and not punitively punish a sector that is actually taking positive steps.

 

 

Melvyn John

Director Corporate Development at Vydex Corporation Ltd

8 年

2. possibly reduce the sugar content of these drinks 3. increase government revenue ! IT, ON ITS OWN, WILL NOT SOLVE THE PROBLEM ! Compulsory increase physical activity in schools educate parents ( tough I know when they can't be bothered!!) incentivise children to excel at sport encourage parents to restrict time on computer games, watching TV... etc A major problem in society is the daily pressure on almost everyone, so we look for ways of relieving it. READY MEALS JUNK FAST FOOD An enormous amount of children leave home without breakfast with money to buy it on way to school you can guarantee they ain't gonna buy porridge !! ?? The obesity issue is endemic in our society. Therefore the answer is not in taxing sugar to try to get a short term fix! The issue requires a well planned long term strategy to change physical and cognitive behaviour . mj

Melvyn John

Director Corporate Development at Vydex Corporation Ltd

8 年

Are we missing an important point here? sugar is merely one aspect of a much wider debate we "should" be having . taxing sugar will only do 3 things: 1 increase the price to consumers

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Sophia Nadur

VC investor | NED | Global e-mobility expert

8 年

Regarding the recently announced Childhood Obesity Strategy, It's not perfect Dominic, but I think it's better than nothing. The industry heavies ploughed millions of lobbying £s to influence the outcome but, in my view, the anti-sugar lobby groups focused too much on "banning" ads and not enough on more effective behavioural nudges. As a former marketing exec at Coca-Cola, Mars, Unilever, Kraft/Mondelez, I endorse - warts and all - the UK Childhood #ObesityStrategy (which won't make me popular with some FMCG industry heavyweights). Perhaps finally it will wake up stores to fix their shelves!

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