Right: Celebrity TV chef Jamie Oliver has crusaded for decades on the health of British children. His school lunches program has been called a huge success and Oliver has now thrown his considerable influence behind the government's initiative on the tax on sugary drinks.
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Arguments against Australia imposing a tax on sugar-sweetened soft drinks
1. Sugar consumption is not the primary cause of ill health in Australia
It has been claimed that sugar consumption is not primarily responsible for many chronic diseases in Australia.
The Australian Beverages Council has noted, 'Recent studies have identified what has been called the "Australian Paradox" - the fact that in the last years, while the refined sugar intake has dramatically decreased (26%), as well as the consumption of sweetened beverages, the prevalence of obesity in Australians was multiplied by 3.'
The Council claims that if obesity is increasing at the same time as sugar and sugar-sweetened-beverage consumption is in decline then the former is not being caused by the latter.
The Council has observed, 'Over the last 15 years, there has been a 17% decrease per person sugar contribution from all water-based beverages, and a 26% decrease per person sugar contribution from carbonated soft drinks.
The Australian Beverages Council has underlined the small percentage of daily adult calorie intake that soft drinks represent. The Council notes, 'Moreover, according to a 2012 Australian Health Survey conducted by the Commonwealth Scientific and Industrial Research Organization (CSIRO), soft drinks represent just 1.7% of the average adult's daily calorie intake and just 1.9% of the average child's daily intake. This figure shows that a tax on soft drinks would not have much effect.'
The Council has also stressed that sugar-sweetened beverages represent only a very small part of the discretionary or treat foods consumed by Australians. 'Within the discretionary food (treat) category, soft drinks ranked 7th in daily energy contribution both in adults and children, at just 4% energy contribution. In adults for example, soft drinks (4%) were ranked behind confectionery/chocolate (18%), sweet biscuits (13%), alcoholic beverages (13%), burgers/pizzas/tacos (7%), pastries (6%) and fried potatoes/crisps (5%).
For children, soft drinks (4%) were behind confectionery/chocolate (17%), sweet biscuits (16%), fried potatoes/crisps (11%), burgers/pizzas/tacos (10%), savoury biscuits (6%) and pastries (5%).'
2. Taxation has not proved effective in other jurisdictions as a way of altering food consumption patterns
Opponents of using taxation to reduce Australians' consumption of sugar-sweetened beverages have noted that such measures have not proved affective in other countries.
The Australian Beverages Council's White Paper notes, 'In 2012, the Danish 'fat tax' was repealed 18 months after it was introduced, and further discriminatory taxes
that the Government had planned to introduce were scrapped altogether.
The negative impact on jobs, inflation and administrative costs on businesses, as well as the distinct lack of an impact on consumption patterns, dietary habits and therefore overweight and obesity were the main reasons for rescinding the tax.'
The Council also cited a broader study conducted by the European Union on the effectiveness of taxation as a means of altering eating habits and observed that the study found adverse side effects and no clear benefits. The Council noted, 'In 2013 the European Commission addressed the issue of overweight and obesity by conducting a study on the effectiveness of taxes on foods and beverages imposed in four EU states - Finland, France, Netherlands and Hungary.
The purpose of these taxes on foods considered high in fat, sugar and salt was to improve public health. However, the EC study published in June 2014 found that the taxes have led instead to: increased administrative costs; reduced jobs in some cases; higher food prices and no discernible improvement to public health.'
The Council's White Paper also questioned the effects of the sugar tax imposed in Mexico, a jurisdiction within which the supposed success of this tax is often cited by supporters of taxation measures.
The White Paper notes, 'In 2014, a soft drinks tax was introduced in Mexico. Whilst it is still too early to determine the full, long term impact of this tax on obesity levels in the country, what is apparent is that since it was introduced, the tax is hitting the poorest people the hardest and having negligible impact on calorie intake. It is estimated that in Mexico, the source of calories coming from soft drinks had initially reduced by 6.2 calories when the tax was first introduced.
In the concept of an average daily dietary intake of 3,025 calories, this reduction represents just 0.20% of the daily diet, or equivalent to 1/4 of a teaspoon of sugar.'
The Australian Beverages Council's White Paper draws the overall conclusion that food consumption taxation measures typically result in a 'negative impact on jobs, inflation and administrative costs on businesses, as well as a distinct lack of an impact on consumption patterns, dietary habits and therefore overweight and obesity.'
3. Taxing sugar-sweetened drinks affects poor families disproportionately
It has been noted that all consumption taxes adversely impact on low income families as food forms a far higher percentage of both their regular expenditures and their regular incomes.
The situation that has developed in Mexico since the introduction of a tax on sugar-sweetened beverages has been used to demonstrate the effect on poor families. The Australian Beverages Council's White Paper notes, 'One key concern of any potential tax on products like soft drinks is the potential for unintended consequences on households in low socio-economic areas.
In Mexico for example, research has shown that 63.7% of the tax is collected from low-SES households and of these, households living in poverty paid 37.5% of the total tax collected.'
It has also been claimed that in the absence of effective dietary education, poor families may actually continue to buy higher priced sweetened beverages and reduce their expenditure on healthy foods. The Council's White Paper claims that this pattern is beginning to show in Mexico. The Council claims, 'Families faced with a price increase in one product, like soft drinks, could potentially reallocate aspects of the grocery spend to accommodate the rise at the expense of other items such as fresh fruit and vegetables.'
The Council's White Paper concludes, 'Such taxes are regressive and impact most on the people who can least afford it.'
The same criticism has been made of the tax on sugar-sweetened beverages recently introduced in Great Britain.
In an article published in The New Statesman on October 23, 2015, Ruby Lott-Lavigna condemned the sugar tax as, 'a tax that would be unfairly exacerbating the already heavy burden...on the poor. This tax would be one that either capitalises on the poverty that has forced people into poor diets in the first place, or restricts their already very limited freedom.'
Lott-Lavigna argues that what are needed are measures that will bring high quality food within the reach of the poor, not ones that simply make poor quality food more expensive.
4. Taxing sugar-sweetened beverages is likely to increase the cost of other products
It has been suggested that imposing a tax on sugar-sweetened beverages could lead to an increase in the cost of other products.
Will Quince, writing for The Spectator in an article published on March 10, 2016, noted re the British sugar tax, 'The tax is levied on soft drinks companies - not the drinks themselves. To cover the costs, soft drinks companies may raise the costs of other products, not just the sugary drinks. For example, a soft drink company could raise prices on their entire range instead of specifically targeting their sugary drinks products. '
Opponents of the sugar tax to be imposed in Britain have claimed that it could push up the price of diet drinks. Kate Smith, a senior research economist at the Institute for Fiscal Studies, has warned, 'The effects of this tax are incredibly uncertain and will depend crucially on how people respond to their tax - both on the consumer and on the food industry side. '
Regarding the food industry side of the equation, critics of the tax note the situation of International conglomerates like The Coca-Cola Company. The United States parent company sells on the Coca-Cola syrup to franchises around the world; however, it also owns a range of other juice and confectionary companies and so could distribute the cost of a tax on products like Coca-Cola across a range of other products.
In Australia and other countries in the south Pacific, Coca-Cola Amatil also owns Grinders Coffee, Romanza coffee, FIX Coffee, Mount Franklin Water, Pump, Glaceau Vitamin Water, Barista Bros, Goulburn Valley, SPC, Ardmona, Henry Jones IXL, Taylors brands, Perfect Fruit and Weight Watchers.
Critics of the sugar tax note there is a significant likelihood of the cost of other products rising if a tax is put on sugar-sweetened drinks. In Australia, some of these products, like Mount Franklin Water, canned fruit and Weight Watchers products, would be seen as healthy and even contributors to the battle against obesity. They claim it would be an odd and counterproductive development if bottled water were to increase in price as a result of a tax on Coca-Cola.
5. Sugar-sweetened drink consumption can be more effectively lowered by other means
Opponents of taxing sugar-sweetened beverages argue that there are better ways of reducing the consumption of these drinks.
Unesda, an organisation representing the non-alcoholic beverages industry in Europe, has stated, 'There are many instruments which are more effective [than taxation] to achieve health policy objectives, such as the allocation of resources to deliver optimal nutrition education amongst all categories of society. Education is the key to ensuring that citizens are aware of how to feed themselves and their families.'
Developments within the United States are sometimes offered as evidence that sugar-sweetened beverage consumption can be lowered via means other than taxation. In the United States, soda (soft drink) consumption has dropped dramatically over the past 15 years, even in areas where there is no sugar tax.
An article published in The New York Times on October 2, 2015 notes, 'Over the last 20 years, sales of full-calorie soda in the United States have plummeted by more than 25 percent. Soda consumption, which rocketed from the 1960s through 1990s, is now experiencing a serious and sustained decline.' The article further claims, 'Sales of bottled water have shot up, and bottled water is now on track to overtake soda as the largest beverage category in two years, according to at least one industry projection.'
The New York Times article concludes, 'The drop in soda consumption represents the single largest change in the American diet in the last decade and is responsible for a substantial reduction in the number of daily calories consumed by the average American child.'
Opponents of taxing soft drinks have stressed that this change has not been brought about by taxation.
An article published in The Guardian on March 17, 2016, examining the change in consumption habits in the United States, noted policy changes that had been successfully implemented in Philadelphia 'such as forbidding sugary drinks in schools, limiting their availability in vending machines, teaching children about nutrition, strict menu labelling laws, and providing incentives for stores to highlight healthy foods,' which, it claims, 'have all helped to discourage people from drinking high-calorie drinks.'
The Guardian article concludes, 'despite popular support for a sugar tax (a view also shared by an even greater proportion of public health experts), evidence suggests it may not be the silver bullet to...obesity troubles.'
The Australian Beverages Council has stressed the measures being taken by soft drink manufacturers to assist in consumer education. The Council has noted, 'We know that nutritional labelling is a vital tool for empowering consumers, and featured as the most supported initiative in our research. In 2006 we introduced daily intake labels on cans and bottles making it easier to understand the kilojoules they were consuming. Educating consumers to make choices for themselves is essential.'