The U.K., Sugar Tax, and the World

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As in any controversy, the reasons offered for why people should think one way or the other are often imaginative. Government greed for tax revenues is definitely one of the subheadings in any conspiracy theory of how the anti-sugar movement could be a big con job. It looks especially shady where a precedent has been set of telling the public that the tax money would be spent on one thing, and then using it for something else.

Some activists mention Mexico, one of the few countries to have instituted a tax on fizzy drinks, and say that while the Mexican tax “targets the consumer,” in the UK it “targets the industry.” In one sense, this is an empty talking point, because the customer ends up paying anyway.

When expenses go up, a manufacturer raises the price and clips the end user. Alternatives might be to cut executive pay and bonuses, or to give the stockholders less than they got last year, but those remedies are of course unthinkable.

Who benefits from a sugar tax?

Possibly, the makers of high fructose corn syrup (HFCS), which is pretty generally agreed to be bad. But it’s cheap. So if soda companies have to pay more tax for using sugar, they just might switch over to HFCS instead, to everyone’s detriment except their own.

It is obvious that people who want fizzy drinks are willing to pay almost any amount for them — yet the industry has kept the price shockingly low. This might indicate that they are content to make their profit off volume.

In the end, it makes little difference whether 10 people pay $5 each for a bottle, or 50 people pay $1 each. They count on profiting from sheer volume, which means the industry finds it vitally necessary to continue its effort to addict as many humans as possible to the product.

At the same time, something weird has been going on, as described by journalist Mark Waghorn:

A study of 82 countries found people can buy 71 percent more cans with their cash than they could in 1990 — making it cheaper than bottled water… They found fizzy drinks became cheaper in 79 of the 82, mainly due to a combination of increases in income and decreases in price. Real prices dropped in 56… While supermarkets are keen to slash prices of cola and other fizzy drinks, bottled water cost far more per litre in contrast.

The differential is even more glaringly obvious in developing countries, according to economist Dr. Jeffrey Drope, who says that a person today can buy 89% more sugar-sweetened beverages (SSBs) than they could with the same proportion of their 1990s income. He believes that policymakers should definitely take action to affect the price of SSBs — in other words, tax them.

As we have seen, Scotland takes the lead in urging that the sugar tax apply to more than soda, but the movement is afoot in Great Britain also, especially among the members of Action on Sugar. The group’s chair, Graham McGregor, told the press:

Action on Sugar is urging the next government to implement a mandatory sugar levy on all confectionery products that contain high levels of sugar to ensure maximum impact to help tackle the obesity and type 2 diabetes crisis.

Research from the U.K. showed that the amount of soda pop equal to a 10-year-old’s recommended daily sugar consumption can be bought for 5p (between 6-8 cents American.) Also in the U.K., a child’s daily intake should in reality be zero, because their dental health status is appalling. A person whose humor takes a cynical twist could easily imagine that the biggest fans of SSBs are the shareholders in medical equipment firms that sell drills to dentists.

Your responses and feedback are welcome!

Source: “Fizzy drinks are becoming cheaper — fueling health problems, finds research,” SunderlandEcho.com, 05/05/17
Source: “Sugar tax must apply to sweets as well as drinks, say campaigners,” TheGuardian.com, 05/11/17
Photo credit: Tim Green aka atoach via Visualhunt/CC BY

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