Taxation policies targeting only soft drinks are unlikely to help governments in achieving their public health or financial objectives. Actually, the evidence that such an intervention provides any significant contribution to reducing obesity and non-communicable diseases is non-existent. Furthermore, revenues from soft drinks taxes have often been significantly less than what was forecasted.
UNESDA therefore strongly recommends to governments to consider other more collaborative and meaningful efforts to help consumers make informed dietary choices. Our industry is committed to working together with all relevant stakeholders to develop more efficient interventions to help consumers control their caloric consumption through reducing sugar, offering smaller package sizes and providing clear front-of-pack labeling, while securing a more stable revenue stream for governments. Meaningful self-regulatory initiatives have demonstrated to work and should be further encouraged.
We also believe that when a taxation scheme is considered it should aim at reducing sugar/calorie consumption without discriminating against one particular product category but rather encouraging reformulation in all product categories contributing to consumers’ sugar intake.
To do so, broader-based taxes should be preferred over selective taxes, exempting low- and no-sugar products and introducing a tiered approach. Taxing low- and no-sugar products do not offer any incentive to manufacturers to reformulate their products and to offer more choice to consumers, including low and no-sugar options.
OBESITY: A COMPLEX ISSUE REQUIRING A MULTI-STAKEHOLDER AND PLURI-DIMENSIONAL APPROACH
The European soft drinks industry is committed to playing a meaningful role in the fight against overweight and obesity and is creating a healthier food environment by offering a wide range of products with reduced calories and reduced or no sugar that can support people in managing their calorie and sugar intake. For many years, our industry has made far-reaching commitments to reduce the average sugar content of its drinks and promote moderate consumption. UNESDA was the first, and to date only, sector to respond to the EU’s 2015 call for a 10% reduction in added sugars by 2020.
We are committed to continuing our actions to reformulate existing products, innovate to develop new products with lower sugar profiles, place promotion behind low- and no-calorie options to nudge consumer behaviour, and reduce pack sizes to help portion control.
However, overweight and obesity are complex issues with multi-factorial causes requiring a multi-stakeholder approach with governments, industry, the healthcare community and civil society, among others, working together. Obesity’s complexity does not lend itself to an isolated simplistic solution like a soft drinks tax but requires a pluri-dimensional approach.
It is well-recognised that obesity is largely the result of an imbalance between excess energy consumption and too little energy expenditure over time, and that all calories count1. Many public health bodies, including the World Health Organization (WHO), have also long recognised that obesity has been fuelled by a variety of complex environmental, social, economic, behavioural, and/or other factors2. Experts including in the WHO, the Organisation for Economic Cooperation and Development (OECD), and the European Commission acknowledge that overweight and obesity are due to:
- Modern lifestyles which are conducive to expending less energy – more cars, less walking, more labour-saving household appliances, more sedentary employment, more sedentary leisure time.
- A reduction in physical exercise over recent decades – including in children, who spend less time outside exploring and more time inside.
- Unhealthy diets – food-based dietary guidelines encourage nutrient and fluid intakes from a wide variety of foods and drinks. Over-consuming some foods/drinks while eating insufficient quantities of others can result in an unbalanced diet.
- Lack of nutrition knowledge – education is key to ensuring that people know how to feed themselves and their families.
- A lack of balance and moderation – the OECD reports that “larger portions are associated with an increased consumption”. Downsizing, which means smaller food and drink portions, has a key role to play in helping consumers to have healthier diets.
Because obesity is the result of a multitude of factors, a range of interventions is necessary to encourage and empower individuals to make the required behavioural changes.
In 2017, the McKinsey Global Institute (MGI) mapped out the range of solutions available to society to change its collective behaviour and reduce obesity. MGI assessed the potential impact and cost-effectiveness of 74 interventions. This exercise concluded that taxation is a rather inefficient intervention compared to other measures. The two most efficient interventions in tackling obesity were portion control and reformulation, two interventions our sector has been prioritising for years.
The soft drinks sector achieved a 13.3% reduction in average added sugars in soft drinks between 2000 and 2015 and a 14.6% reduction between 2015-2019 in the EU-27 and the UK. Thanks to our latest actions, we reached a 14% reduction in average added sugars between 2019 and 2025. This means we exceeded our 2019-2025 sugar reduction target of 10% (see here an overview of current national sugar reduction commitments in the soft drinks sector).
Notes
1 See e.g., WHO, “Obesity and Overweight” (January 2015), available at http://www.who.int/mediacentre/factsheets/fs311/en/ ( “The fundamental cause of obesity and overweight is an energy imbalance between calories consumed and calories expended.”).
2 See e.g., NIH, “About NIH Obesity Research,” available at http://www.obesityresearch.nih.gov/about/ (“The high prevalence of obesity likely results from a multitude of factors: inherent genetic and other biological traits that differ among individuals, environmental and socioeconomic factors, and behavioral factors–which may have both genetic and environmental influences.”).
WANT TO KNOW MORE?
Here’s why our sector questions the effectiveness of taxes on soft drinks in promoting healthier lifestyles:
No evidence that taxation of soft drinks drinks has reduced obesity or non-communicable diseases (NCDs)
Taxing soft drinks only is a simplistic, mono-dimensional approach that ignores the contribution of other nutrients and food categories to obesity or non-communicable diseases (NCDs)
Taxation of low- or no-calorie beverages lacks policy coherence and undermines sugar reduction efforts