The deadline for manufacturers and beverage importers in the UK to register for a new sugar tax is Friday, while Irish firms have been given a temporary reprieve.
The British government has given companies two years to reformulate, while Irish businesses have had slightly less time to prepare – although their sugar tax has now been postponed until 1 May.
The UK tax involves a levy of £0.18 per litre for drinks with more than 5g of sugar per 100ml, and £0.24 per litre for drinks with 8g of sugar per 100ml. The Irish rate has been set along broadly similar lines. In both countries, there are a number of exceptions – notably dairy-based and pure juice drinks.
With just a day to go, FoodBev has teamed up with Mark Jones – partner and food and drink industry expert at Gordons law firm – to explore which countries are the most likely to take action on sugar next.
Canada is one of the most hotly tipped countries to introduce a sugar tax next. In fact, the Liberal government and Prime Minister Justin Trudeau, while pressing ahead with plans to legalise marijuana for recreational use this summer, were expected to announce some sort of measure in February’s budget. But ultimately the current administration took a pass, despite research that suggested a majority of Canadian consumers were in favour of some sort of levy on sugary sodas.
The policy isn’t universally popular, though: an analysis published in the Canadian Medical Association Journal warned that a sugar tax could exacerbate levels of inequity and stigma, including racial stigma, in already-marginalised communities. “People of low socioeconomic status and Aboriginal populations in Canada consume more sugar-sweetened beverages than the general population and have higher rates of obesity and diabetes,” the CMAJ wrote. “For taxation of sugar-sweetened beverages to be effective as a measure of population health, it must affect consumption in these populations.”
Mark Jones says: Introducing a sugar tax, or banning junk food adverts as the Scottish government has done, are the types of policies we are likely to see increase over the coming years. A sugar tax on soft drinks alone is unlikely to have any significant effect on its own.
FoodBev predicts: A sugar tax could be considered feasible in the next few years.
The city state is another frequently mentioned in connection with a sugar tax – and it was another widely expected to introduce some sort of sugar-specific legislation earlier in the year. But in February, fizzy drinks received another reprieve as Singapore’s minister for finance, Heng Swee Keat, announced a 2% increase in goods and service tax (GST) instead of a levy specifically on sugar.
But despite the rise in GST, which applies to all food and beverage products regardless of their sugar content, the country has not ruled out introducing further legislation in the future. Foo Mee Har, a member of the Singaporean parliament, has specifically proffered the idea of implementing a sugar tax or increasing duty on alcohol instead of applying a blanket increase to all goods and services. So the issue could be raised again in future budgets, but for Singapore perhaps the issue is less likely as the country has, traditionally, been a relatively low-tax economy (Singapore’s top rate of tax is 22%, compared to a top federal rate of 33% for Canada, while the top-rate threshold is also much higher).
Mark Jones says: While Canada and Singapore are the nations most likely to follow the ‘trend’, the real story is the number of governments that are against introducing the tax – including Germany, the Netherlands, Slovenia, New Zealand and Australia. In the Philippines, over 300,000 people signed a petition opposing a sugar tax.
FoodBev predicts: It still seems likely, but Singapore is a light touch in terms of tax.
Colombia is a controversial topic in the sugar debate: the country’s love of Coca-Cola and political reticence towards legislating probably mean that a sugar tax is a little way off. But a public affection for Coke didn’t stop another Latin American country – Mexico – from virtually leading the way in terms of sugar legislation.
And Colombia probably needs it: according to a study from the country’s health ministry, half of Colombians are overweight and 16.5% of those are clinically obese. In fact, nearly 60% of Latin America is either overweight or obese, a 2017 FAO study shows. There have been calls for a sugar tax in the past and independent organisations have got involved in the debate in hope of accelerating change: the Global Food Research Program predicts that a 20% tax on sugary beverages in Colombia would lower purchases by 32% and raise $480 million in government revenue by 2020. But the issue is frought with tension: there have been accusations of intimidation against campaigners, and the Colombian government has been known to step in to defend manufacturers.
But just because calls for a sugar tax have fallen quiet, it doesn’t mean that they won’t be resurrected in the future. Perhaps, as far as South America is concerned, it might only take one government to act before others are encouraged to do so, and Argentina significantly raised duty on soda at the end of last year.
FoodBev predicts: Campaigners will need to find voice again, but that could happen.
If Lithuania were to join its Baltic neighbours in implementing a sugar tax, it would represent a marked change in approach for the former-Soviet nation. In January, it announced it had put plans for a sugar tax on hold after joining with a number of food and beverage manufacturers to agree a voluntary code of reformulation. Lithuanian health minister Aurelijus Veryga said the self-regulation would serve the same purpose as any tax: reformulating products so that they are healthy.
And Lithuania needs it: The Lithuanian government said that people in the country consume 40% more salt, 39% more fat and 22% more sugar than is recommended by the World Health Organization (WHO). Taxes could be back on the table if the self-regulation doesn’t work, but that looks less likely here than elsewhere. Latvia and Estonia have both introduced their own sugar taxes, with Estonia’s set to come into force this year.
Mark Jones says: Whether countries are likely to introduce a sugar tax really depends on how elections play out and whether the World Health Organization’s recommendations start to be heeded by national health organisations and governments. Less than 30 countries have introduced a tax on sugar to date and I do not expect many more sugar specific taxes to be introduced by other countries in the near future.
FoodBev predicts: Unlike its Baltic neighbours, Lithuania has found ‘another way’.
In Europe, Spain is perhaps the last major country not to take a position on sugar taxes. There are those, like the UK and Ireland, that have taken definitive action; and there are other countries, like Germany and the Netherlands, where the consensus opinion seems to be against. But Spain is a law unto itself. In neighbours France and Portugal, it has two nations that – as far as European legislation goes, at least – were among the earliest adopters of sugar taxes and have taken the firmest action. In fact, France has gone farther than just introducing a tax on sugary soft drinks; it has taken proactive steps to reduce their consumption, including banning self-serve dispensers.
In contrast, Spain is not completely untouched by sugar legislation – Catalonia introduced a sugar tax on soft drinks but all that did was rally the troops: Spain’s beverage industry united in a bid to reverse the legislation, which came under sustained fire. Instead, the Spanish government opted to partner with more than 500 food and beverage companies to reduce salt, sugar and fat levels in more than 3,500 products, with a deadline of 2020, in a similar move to Lithuania.
Mark Jones says: The reason so many nations are against such a tax is because there is little evidence to demonstrate it actually tackles the problem, which is one of calorie intake and calorie balance. In the UK, Public Health England published its latest National Diet and Nutrition Survey last month, which confirmed sugar makes up 13.5% of daily calorie intake for 4-10 year olds and 14.1% for 11-18 year olds. The survey also showed 31% of adults and just 8% of teenagers meet the ‘five-a-day’ recommendation for fruit and vegetables.
FoodBev predicts: Spain seems set against a sugar tax, for now.
With so much media focus on the UK and Ireland, you could be forgiven for not realising that other countries are readying sugar legislation of their own. South Africa introduced a sugar tax at the beginning of April, the Philippines has already implemented a sugar tax of its own, and Thailand is phasing in legislation slowly to help manufacturers adjust.
Despite their high-tax reputations, the Scandinavian countries are less likely to implement sugar taxes. Lessons from a failed ‘fat tax’, effective for about a year between 2011 and 2012, will probably put Denmark off introducing a sugar tax. And Norway has had some form of tax against confectionery products for almost a century, although that was initially motivated by their position as a luxury product and wasn’t necessarily motivated by their sugar content. The Norwegian government massively increased the rate of the tax earlier this year amid growing concern about the health effects of sugar.
And one country that is probably safe from sugar taxes is the US. Some cities, like San Francisco and Seattle, have acted on sugar in some way. But their approach, like Spain, will continue to be on a piecemeal basis. We know that President Trump, who is rumoured to drink 12 cans of Diet Coke a day, is averse to regulating industries. It would be a brave man who, in the face of pressure from both sides of the gun debate, chose to introduce laws against cola instead.
But that said it’s clear that, even with some heavyweights behind us, there will be more taxes – perhaps not many, but a few – to come.
We’ll leave the final word to Gordons’ Mark Jones: “With obesity costing so much, we are likely to see big changes from food manufacturers in the coming years,” he said. “If we do not, more regulation, bans and taxes will follow.”
© FoodBev Media Ltd 2021
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