(Side note: while the Soft Drinks Industry Levy was only introduced in 2018, as it began having effects on society from when it was announced, I have considered its impacts from 2016-2019.)
Obesity has become a major health issue in the UK, USA and many other western countries. Indeed, recent figures show that 5-year-old children are consuming their body weight in sugar each year. According to the National Institute of Diabetes and Digestive and Kidney Diseases, 37.7% of US adults are obese. Experts also believe that within a single generation, over 50% of boys and 70% of girls in the UK could be overweight or obese.
The most obvious way that the UK government has attempted to reduce obesity has been through the implementation of the Soft Drinks Industry Levy (SDIL), which was first announced in the 2016 UK Budget. The theory and predictions behind this so-called "sugar tax" seemed to lend much support to its effectiveness, but now the levy has nevertheless become subject to enormous criticism.
The model behind how the sugar tax works is very similar to the proverbial "carrot and stick", in that consumers would be rewarded for steering clear of soft drinks with a high sugar content and punished for consuming them.
The "punishment" part of this scheme takes the form of direct taxation on sugar-sweetened beverages. This tax, introduced on 6th April 2018, imposed a tariff on sugary drinks, with drinks that contain a total sugar content above 5g per 100ml being taxed at 18p per litre and drinks with a total sugar content of greater than 8g per 100ml being taxed at 24p per litre. As such, the government hoped to increase the financial burden that a soft drink posed to the average person and thus force them to reconsider before buying another can.
By generating extra tax revenue from this levy, the government hoped to fund the "reward" part of the scheme. As part of the 2016 Budget statement, George Osborne announced that the scheme would raise around £520 million per year. Philip Hammond then hiked up the sugar tax rates in his 2017 Budget statement, predicting that this would bring in an extra £1 billion per year. These funds were funnelled straight to the Department of Education, being earmarked for school sports programmes. By doing so, the government began a grassroots effort to encourage young people to play sports and live healthier lifestyles. Especially when considering that young people are the largest demographic who consume sugary drinks, this scheme promised great results in reducing sales of sugary drinks and increasing fitness in youths.
The outcome, one year after the introduction of the levy, was disappointing. Although brands such as Fanta and Ribena changed their recipes, resulting in an average decrease in sugar content of 28.8% since 2015, the consequences of that have not been fully positive. The new recipes excluded these drinks from the tax levy, thus reducing funding for schools sports programmes to an estimated £240 million in 2019. Furthermore, the levy also helped to boost sales of dilute drinks that still have a high sugar content, including fruit cordials. I would contend that this increase is in part due to the added perceived value that the label "no added sugar" or "reduced sugar content" gave during the period of intense media coverage.
While any reduction in the sugar content of sugary drinks is promising, one would be hard pushed to describe this reduction alone as having a considerable effect on health. In order to improve public health significantly, the government needs instead to enact sugar restrictions on all food groups.
Despite the government's pledge to reduce the average sugar content in food by 20%, recent figures from Public Health England show a reduction of a meagre 2.9%. In start contrast, we are now buying more sugary food on average. Indeed, the amount of sugar we buy each week has risen since 2015, from 723,000 to 743,000 tonnes. This is likely because any reductions in this category were voluntary on behalf of the manufacturers and retailers - the law did not compel them to do anything. Thus, the lack of the manufacturers' motivation as well as the rather limited reach of the law has contributed to reducing the impact of the SDIL.
In order to evaluate the relative success of the SDIL, one must compare UK data with other countries. For instance, in September 2013, Mexico launched a similar "sugar tax" initiative, placing a tax of 1 Peso per litre on soft drinks. Following this launch, sugary drink consumption decreased significantly, with average consumption declining by 6% within 1 year. This was complemented by an increase of 4% in the consumption of water and non-taxed beverages, supporting the theory that this tax has helped encourage people to switch to non-sugary alternatives. Furthermore, this tax is also likely to help reduce the strain on the Mexican healthcare system, with a study estimating that healthcare costs of almost $1billion will be saved over 10 years. The key difference is that the Mexican law had something further which ours did not - it additionally placed a 5% tax on junk food. This increased the breadth of the law, thus allowing Mexico to obtain far greater reductions in average sugar intake than we could in the UK. On the flip side, it is important to note that the levy has disproportionately affected people from poorer backgrounds since they have less disposable income. As such, we must be considerate of this effect if we increase the levy here in the UK, in order to reduce the impact of this factor. We must also note that the scheme in Mexico is still in its early stages and thus long-term impacts or consequences have yet to be determined.
Another argument which should be touched upon is that of overreaching government control, the so-called "nanny state". While this argument does have merit, as it illustrates how the government can place pressure on what we buy, I do not think that it has a very significant stake in this situation. This is largely due to the fact that the state has the power and therefore responsibility to use its influence to encourage people to make better and more informed choices about their health and safety. In my opinion, the government is therefore justified in instituting this sugar tax, as it uses price as a tool to discourage consumption while the revenue obtained can be used to offset the impact of associated health problems on the NHS.
In conclusion, the success of the SDIL has been rather limited, especially with regards to its lack of breadth. By not targeting other food groups as well, SDIL fails to make significant reductions in average sugar consumption. While the government is considering expanding the tax to include other foods groups, one doubts how quickly these proposals will come into effect, especially considering that Prime Minister Boris Johnson has openly questioned what he calls "sin taxes". An expansion of the levy would also increase the burden on low-income families, calling into question the ethics behind the scheme. Moreover, even though the SDIL has been largely effective in reducing sugar consumption through soft drinks, it has generated very little money for schools sports programmes, thus undermining the "reward" part of the scheme. As such, overall, while the SDIL was an important first step, it has fallen short of many targets and thus cannot be considered as very effective. More steps also need to be taken in order to reduce obesity in the UK.
It is important to note, however, that much of the reformulation of these energy drinks had already been completed by April 2018, when the levy came into effect. As such, drinks companies clearly demonstrated how they could easily create sustainable solutions when sufficiently incentivised through financial means to do so. Therefore, I would contend that more pressure should be placed on drinks manufacturers and other companies to take responsibility for problems which they have a hand in exacerbating, and thus take the initiative to solve them.
Thank you for taking the time to read my first post, I hope you enjoyed it!
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