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Obesity and diabetes are two of the leading diseases, especially in first world countries which have been moving to a more technologically-dependent and therefore sedentary lifestyle. The sugar tax was announced in the UK in 2018 to tackle diabetes, obesity and tooth decay.
What is the sugar tax and why do we need it?
The sugar tax is a levy on companies producing sugary drinks in an attempt to reduce their sugar content and drive consumers away to healthier alternatives. Companies are taxed according to the amount of sugar in the drink. Drinks with 5-8g of sugar per 100mL are taxed 18p a litre, while drinks with 8 or more grams of sugar per 100ml are taxed 24p per litre. In a typical UK primary school class of 30 students (aged 10-11), 6 students on average would be obese while 4 would be overweight. These values are double those from 30 years ago which is increasingly concerning. Before the tax was introduced, a study by the University of Cambridge concluded that around 8,000 cases of Type 2 Diabetes per year were associated with the consumption of sugary drinks - emphasizing the necessity of implementing such a policy. The sugar tax was estimated to raise £520 million which would be used to fund sports and better PE equipment in primary schools to tackle childhood obesity and diabetes.
Advantages of the sugar tax:
The Queen Mary University in London predicted that reducing sugar in soft drinks by just 40% over 5 years could prevent 300,000 cases of Type 2 diabetes and 1.5 million cases of obesity in the UK. This aim has been partially met just 2 years after the implementation of the policy - with a 44% reduction in sugar content across mid and high sugar drinks sold in the UK, reported in October 2020. Other countries that implemented this policy also received favourable outcomes, with Mexico seeing a decline in sales of sugary soft drinks by 6% in just the first year of implementation. The tax works because higher prices reduce demand for a particular good, according to the Law of Demand in Economics. At the same time, producers now receive fewer sales and will therefore be incentivized to reduce sugar content in their drinks to below 5g per 100ml so that they can be exempt from the tax, and sales could increase again.
Along with this, the tax revenue collected by the government is being used to promote exercise and physical education in primary schools which incentivize children to lead a more active lifestyle. At the same time, the government has called for a ban on using cartoon characters to promote fatty or sugary food items which could prove to be very effective. The government also encouraged producers of sugary sweets and food items, such as biscuits, to reduce their sugar content by 20% - but no tax has been implemented in this case.
Improvements to the sugar tax:
The government could possibly use the tax revenue generated to subsidize healthier food options. Obesity and diabetes often have socio-economic roots since lower socioeconomic classes tend to consume more junk food since it’s cheaper. Reducing the price of healthier foods, while simultaneously increasing the prices of sugary drinks would attract people to consume healthier food options.
Secondly, the tax should be extended to sugary snacks as well. Because companies were only encouraged to reduce sugar content, they fell short of the 20% target by a lot - reducing sugar content only by 3% on average. Compared to the overwhelmingly positive outcomes of the sugar tax, the extension of this tax should also be effective. These programmes should also be extended to the adult population because parents heavily influence their children's decisions.
Summary:
The sugar tax was introduced in 2018. Drinks with 5-8g of sugar per 100mL are taxed 18p a litre, while drinks with 8 or more grams of sugar per 100ml are taxed 24p per litre.
The sugar tax has been successful with a 44% reduction in sugar content across mid and high sugar drinks sold in the UK. This is due to the Law of Demand in Economics.
While the sugar tax has been very successful, there are multiple improvements to this scheme, such as - extending the tax to sugary snacks and subsidizing healthier food options.