Tax on sugary drinks works - Otago Uni research

Dr Andrea Teng. Photo: Supplied
Dr Andrea Teng. Photo: Supplied
A University of Otago study shows introducing a sugary drinks tax works to reduce consumption and its authors say the New Zealand Government should take note.

The study, which was released today, showed that overseas a 10% tax has cut the purchase and consumption of such drinks by 10%.

"We'd recommend this as a great next step for the New Zealand Government,'' said Dr Andrea Teng, lead author of the University of Otago study.

Health Minister David Clark has said he wants healthier drinks but wants to work with the industry to bring in voluntary sugar reductions.

Dr Teng, of Otago University's Wellington campus, said New Zealand had "very high rates of obesity''.

Asked if the Government should seriously consider introducing a sugar tax she said "for sure''.

"I think it's important that our Government is quite serious child obesity, considering the [New Zealand] obesity epidemic,'' she said.

"This new review presents compelling evidence that sugary drink taxes result in decreased sales, purchasing or dietary intake of taxed beverages.

For a 10% tax, sugary drink  volumes declined by an average of 10%.

"It shows taxes on sugary drinks are an effective tool to reduce consumption, and we know from other research that the high consumption of sugary drinks increases the risk of obesity, diabetes and dental caries.''

The evidence emerging from the Otago University meta study - a summary analysis of earlier international studies - was "really clear'', she said.

Review co-author Amanda Jones said a tax could also prompt manufacturers to "reformulate sugar levels downward, as seen in the UK, even before their tax was introduced in April 2018''.

The Otago University study brought together evidence from the other studies, and showed a drop in sugary drink consumption.

The Ministry of Health says New Zealand has the third highest adult obesity rate in the OECD, behind only the United States and Mexico and "our rates are rising''.

Dr Amanda Jones. Photo: Supplied
Dr Amanda Jones. Photo: Supplied
Almost one in three adult New Zealanders - over 15 years - is obese, and one in ten children.

The Wellington campus researchers combined evidence from settings where a sugary drinks' tax had been applied and evaluated it into a meta-analysis.

Studies included four cities in the US: Cleveland, Ohio; Portland, Maine; Berkeley, California; and Philadelphia, Pennsylvania.

A regional tax was studied in Catalonia, Spain, and the effects of country-wide taxes were studied in Chile, France and Mexico.

The research is published in the international scientific journal, Obesity Reviews.

Dr Teng said the research took a new approach in combining multiple studies examining the real-world impact of sugary drink taxes on sales, purchases and dietary intake before and after taxes were imposed, or between taxed and untaxed settings.

Dr Teng says there is also evidence that sugary drink consumption may contribute to heart disease, cancer and premature death.

Some of the studies looked at the alternative drinks people consumed instead of sugary drinks after the tax was applied.

With a 10% tax on sugary drinks, there was a 1.9% increase on average in such alternative drinks, and for water specifically there was a 2.9% increase.

This healthier substitution pattern is not conclusive, but in three out of the four settings where substitution occurred, the increase in consumption of the other non-sugary drinks was statistically significant.

Dr Jones said all the individual studies in the review found a reduction in sugary drink consumption, but the impact in some settings was greater than others.

Applying tax by thresholds of sugar content, rather than as a percentage of price, appeared to be important for determining a more favourable impact.

Other reasons for differences between settings may be the combination with other obesity prevention policies, the public's awareness of the tax, industry responses, consumer preferences, border permeability, availability of alternative beverages, and sensitivity to price.

For example, Chile also decreased tax on low-sugar beverages at the same time as increasing the tax on high-sugar beverages; Mexico introduced a sugary drinks tax combined with a junk food tax; and France also taxed soft drinks with artificial sweeteners.

Some of the differences found in these studies may also be due to non-price mechanisms.

For example, a tax may signal to the public the seriousness of the health concern associated with consuming a product, Dr Jones says.

Some studies looked at the impact of sugary drink taxes by socio-economic factors, but more research is needed in this area, the authors say.

In Mexico, for instance, there were greater consumption declines in lower income households, while the opposite was true in Chile.

The World Health Organisation recommends governments impose a 20 per cent tax on sugary drinks, saying the evidence for reduced consumption and meaningful health effects is strongest for this food category.

Dr Teng said that successive New Zealand Governments appeared to have little interest in introducing sugary drink taxes.

But it was "probably inevitable'' that this type of tax, which was highly targeted at protecting child health, "will need to be seriously considered by New Zealand politicians''.

In the meantime the Government has a range of other options, she says, including:

  • Prohibiting all sugary drink sales at all schools and sports facilities used by children. This is already happening at some schools.
  • Banning all sugary drink advertising that is targeted at children.
  • Introducing mandatory health star ratings on sugary drinks and other food and beverages.
  • Introducing a cap on serving sizes for sugary drinks as has been done in France (see recent New Zealand modelling:

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