Opposition to sugar tax not just ideology

The Press
2 September, 2016

The obesity experts in favour of a sugar tax are right about one thing: some of the opposition to such a tax is ideological.

But they're kidding themselves if they think that is the only reason. There is little evidence sugar taxes have reduced obesity overseas; and despite the proponents' best intentions, a sugar tax is really very condescending.

Stuff recently reported on the throng of public health experts in favour of implementing a sugar tax in New Zealand. The expert consensus seemed to be that the main reason New Zealand has not already implemented one is because of ideology and political unwillingness.

If that is truly what they believe, then it is no wonder reliable and convincing evidence has taken a backseat in their crusade.
Let's start with the most important point any policymaker would want to know about implementing a sugar tax: has it worked overseas?

Stuff asked this question of the obesity experts too. But simply pointing to the countries that have implemented a sugar tax is not enough to prove it will work here.

Besides, the approach governments take to food taxes varies greatly. Some taxes are simply intended to raise revenue. Others target specific ingredients or items like fat, sugar, soda, or sugar-sweetened beverages. Some taxes are passed on directly to the consumer, while in other cases, the producer absorbs some of the raised costs.

Philadelphia, for example, has introduced a soda tax to raise revenue for social programmes that the council could not otherwise afford. Any connection between the tax and public health has been carefully avoided. In fact, the mayor even acknowledged that his constituents would reject nanny state regulations, and that people generally do not like government telling them what to do, what to eat, or whether they are too fat.

Denmark, meanwhile, introduced a comprehensive fat tax. Among the many challenges faced were the fact that the tax was technically complex to implement, added an extra burden on small businesses, and could not control for importation from neighbouring countries.

Then we have Mexico. Mexico's soda tax is often seen as the shining star in the sugar tax landscape. But even the most recent study, from the British Medical Journal (2016) suffers serious flaws. Although the study showed an effect on soda purchases, the effect was tiny. The largest decrease was among the poorest households, and was the equivalent of one sugar cube, per person, per day. Even then, those results might not be reliable, given the researchers abandoned standard econometric techniques in favour of a less robust study design.

Most importantly, none of the overseas examples have demonstrated a decrease in obesity. The best they can do is prove a tax decreases how much people buy of that product. But in a world of alternative unhealthy but untaxed foods, and where people can switch to cheaper brands when the price goes up, the effect of a tax on obesity is unclear.

It is likely that previous researchers have underestimated the effect of downshifting to cheaper brands when a sugar tax is imposed. Recent research by Waikato University economics professor John Gibson has looked at this very issue. Using data from Vietnam, Gibson finds that once downshifting is considered, a sugar tax could have about a quarter of the effect than most have previously estimated. What's more, because the data came from Vietnam, the opportunities to switch to cheaper brands is even greater for richer countries like New Zealand.

According to endocrinologist and diabetes specialist Robyn Toomath, the obese "are not lazy, lacking in motivation or stupid". Well, I hate to break it to the sugar tax advocates, but implementing a sugar tax assumes just that. It assumes that people cannot make responsible decisions for themselves as they see fit. It assumes that people do not understand the health risks of certain foods, or simply do not care enough to find out. And it assumes that no matter how much people want to change their eating habits, they cannot do so without the force of government.

Besides, if much of the obesity epidemic is due to genetics and physiological factors as some experts claim, then it sounds like the damage is already done – at least for this generation. It is unclear how increasing the price of an unhealthy food can reverse genetics.

There is much to take issue with in the campaign for a sugar tax, and not much convincing evidence that it will do what advocates say it will.

It is, of course, a question of ideology over whether it is the government's job to address obesity and intervene in people's freedom to make decisions over how they live their lives. But beyond that, there is a bigger question over whether a sugar tax will even achieve the public health goals it was designed to address.

If the sugar tax advocates really do believe that "merchants of doubt" are the most threatening bogeymen thwarting their laudable goal, surely they should have one countervailing weapon up their sleeve: proof.

Jenesa Jeram is a Policy Analyst at The New Zealand Initiative and the author of The Health of the State, a report on public health and lifestyle regulations.

Link to story can be viewed here.

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