In April 2018, the UK Government introduced their sugar sweetened beverage (SSB) tax. Drinks containing 5-8g per 100 ml of sugar are now taxed at a rate of 18p per litre and drinks containing over 8g per 100 ml are taxed at a higher rate of 24p per litre. The tax is applied to all manufacturers and to date 457 companies are registered to pay this tax.

The tax has been successful in two regards. Firstly, in the run-up to the introduction of the tax many manufacturers reformulated their drinks to reduce the amount of sugar they contain to avoid paying the tax. This included supermarket giant Tesco’s who, in 2016, reduced the sugar content of their soft drinks to below 5g per 100ml. Other brands who have reduced the sugar content of their products include Ribena, Fanta and Lucozade.  Some brands, such as Coca Cola have decided not to reformulate their products as they are concerned about losing their customers. This means that in the UK the price of a can of coke has increased by 8p and a large bottle of coke by 50p.

The second success of the sugar tax is the revenue that has been raised. In the first six months of the tax being introduced £154m was raised. The money raised from the sugar tax will be used to double the funding available to primary schools for PE and sports programmes to support healthier, more active, lifestyles in children. The funding will not only go towards expanding PE and sports programmes but to also expand breakfast clubs in primary schools ensuring that children have access to a healthy breakfast every week day.

Islands states throughout the Caribbean are considering introducing a SSB tax and it is hoped that the recent success of the UK and other countries like Mexico will provide Governments with the evidence of the impact of a SSB tax.

On 5^th December, South Africa’s parliament passed a bill to introduce a tax on drinks with a high sugar content.  This comes after 18 months of negotiations which included four consultations with the public.

The tax will come into effect on 1^st April 2018 and will impose a levy of 2.1 cents per gram of sugar on all sugar-sweetened drinks; the first 4g of sugar per 100ml will be exempt. What this means in practice is that the price of the average can of coke will increase by 11%.

The South African government expects to raise a significant amount of money from this new tax which will be invested into health promotion projects to tackle obesity and facilitate the prevention of non-communicable diseases like diabetes, cancer and heart disease.

With South African being one of the top 10 consumers of sugary drinks in the world, it is hoped that this tax will lead to a reduction in the consumption of these drinks which will play a part in improving the health of South Africans.

Tracey Malawana, the coordinator of the Healthy Living Alliance said:

“We applaud Members of Parliament for putting the health of millions of South Africans before the narrow interests of the beverage and sugar industries.

 

“Thanks to Treasury and MPs, South Africa is on the right path to reverse the alarming numbers of diabetes cases and other NCDs associated with obesity. We now look to the President to sign this important law without delay. “

South Africa joins a growing number of countries who have introduced a tax on sugary drinks. These countries include Mexico, Barbados, France, Denmark, Hungary, Portgual, Saudi Arabia,  India, Thailand and others.

Sugar taxes are just one part of the global strategy to improve the public’s health through government policy. Health policy experts recommend that governments explore policies around three main areas: unhealthy foods, alcohol and cigarettes, and within these three areas to explore policies that restrict access, ban advertising (particularly to children) and increase taxes.

South Africa will have to wait a few years to determine the effect of introducing the sugar tax but initial evaluations from Mexico, who has had a sugary drinks tax for a couple of years, are very promising. An analysis of the sugar tax in Mexico found that sugary drinks consumption dropped by 5.5% one year after the sugary drinks tax was introduced, and in the second year sugary drinks consumption fell by 9.7%. Based on this,  the introduction of this tax  in South Africa brings the nation one step closer to tackling one of the key risk factors for non-communicable diseases and obesity.

Yesterday, the UK government published its policy document, ‘Overview of Legislation in Draft’,  which outlines the changes to tax law which the government plans to introduce in its 2017 finance bill, in secondary legislation and in future finance bills.

This draft legislation includes information on the soft drinks industry levy (sugar tax) which will come info effect from April 2018.

With regards to the sugar tax the Overview of Legislation in Draft says:

“As announced at Budget 2016, and following consultation on the design and implementation of the levy over the summer, the government will legislate in Finance Bill 2017 for the Soft Drinks Industry Levy. This is a levy on importers and producers of beverages that contain added sugar to help tackle childhood obesity. The 2 thresholds, at 5g and 8g of sugar per 100ml have been designed so that, by taking reasonable steps to reduce sugar content, UK producers and importers of soft drinks can pay less or escape the charge altogether. The levy will take effect from April 2018.

 

There will be an exemption for the smallest operators and a credit against levy liability, subject to evidence, for liable drinks that are exported.”

The government expects the sugar tax to raise £520M in its first year and these funds will be used to double the funding available to primary schools for PE and sports programme. The government has estimated that the sugar levy will raise £320 million a year for primary schools to support healthier more active lifestyles in children. The funding will not only go towards expanding PE and sports programmes but to also expand breakfast clubs in primary schools ensuring that children have access to a healthy breakfast every week day.

The government has also published a full policy document on the sugar tax which gives further information on the objectives of the tax, who it will affect and how it will be monitored.

The Lake Foundation is glad to see that the government is making progress on implementing the sugar tax and hope that it will go some way to tackling obesity in the UK.