‘The cost of dealing with disease is growing all the time’: why experts think sugar taxes should be far higher

Lying in the shadow of Table Mountain, a short drive from the sprawling vineyards that help generate so much of South Africa’s tourism revenue, is Langa. In the city of Cape Town, this is the oldest example of a township, settlements originally created to segregate the black African community from urban areas. Today, Langa is home to just under 90,000 people, many of whom live in wooden or corrugated iron shacks.

But while Langa and South Africa’s other townships have traditionally suffered from diseases of deprivation such as tuberculosis, an infection facilitated by crowded and poorly ventilated living conditions, lifestyle-related illnesses such as diabetes, hypertension, stroke and heart disease have become rife in recent decades.

Coca-Cola does nothing to make people aware of how it affects their bodies. It’s just merely a vacuum of taking money

It is not hard to see why. Take a short walk around Langa and the Coca-Cola label is ubiquitous on shopfront walls. Thulani Fesi, Langa’s community leader, explains that sugar-laden drinks are abundant in the township at the expense of healthier alternatives.

“If you walk into any corner shop, they [Coca-Cola] have supplied the fridges and they ensure that the fridges are filled with their drinks,” says Fesi. “It’s quite sad because they do nothing in terms of making people aware of what they consume and how it affects their bodies. It’s just merely a vacuum of taking money.”

Six years ago, faced with rising rates of obesity and related illnesses, particularly among the poorest segments of the population, the South African government attempted to address the problem through the health promotion levy. This is a form of sugar tax that attempts to dissuade consumers from buying carbonated, sugar-sweetened drinks through, in effect, raising their price by 11%.

View image in fullscreenA Coca-Cola logo on the wall in the Langa township in Cape Town, South Africa. Photograph: Oneworld Picture/Alamy

Food policy experts say that this tax has already made a significant difference. “Within two years, we found there was a 29% reduction in sugary drinks purchases and that reduction was higher among low-income households,” says Luyanda Majija, a strategic adviser based in South Africa for Vital Strategies, an international nonprofit organisation that works with governments to strengthen public health systems. “We also found that as a result of people buying fewer sugary drinks, there has been a 51% reduction in calorie intake.”

Some benefits have also been seen in the UK, which introduced its own levy on sugar-sweetened soft drinks in 2018. A study last year showed that the number of children requiring hospital admissions for tooth extractions had dipped 12% by 2020.

However, while such taxes are becoming more common – 108 countries now have some form of sugar tax on soft drinks – there is a lingering sense that they have not yet achieved their potential. In December, the World Health Organization (WHO) released a report saying that in some cases tax levels are relatively low in most countries and not optimised to achieve public health goals such as incentivising people to choose healthier alternatives by subsidising the cost. As an example, the report found that 46% of countries that impose sugar taxes on soft drinks also place taxes on bottled water.

The lack of a strategy for directly funnelling money from sugar taxes into promoting healthy foods, drinks and lifestyle choices remains one of the biggest criticisms of existing sugar taxes around the world.

View image in fullscreenLaura Cornelsen of the London School of Hygiene & Tropical Medicine says there is no way to hold the UK government accountable for the money raised by the sugar tax it introduced in 2018. Photograph: Christian Sinibaldi / LSHTM

Laura Cornelsen, associate professor in public health economics at the London School of Hygiene & Tropical Medicine, says that there is no way to hold the UK government accountable for the pledges made when the sugar tax was first introduced.

“It is not great that there is no information on what the money collected from the levy has been used for, despite the government’s initial promises to allocate all of it to provision of sport and breakfast clubs in schools,” she says.

While taxes have initially been focused on soft drinks – because sugar consumed in this way has a far more direct impact on blood sugar levels and the risk of disease – polls taken around the world have indicated public support for expanding their scope to cover a broader range of unhealthy foods. In February, surveys taken for the Times health commission found that 53% of respondents backed extending it to foods high in salt, with 49% in favour of incorporating milk-based drinks containing sugar such as plant-derived milk substitutes.

WHO researchers have also found that most countries do not tax fruit juices or sugar-sweetened ready-to-drink tea or coffee, even though some of these products contain what nutrition experts refer to as free sugars. These encompass either added sugar, or in the case of fruit juice, sugar that is naturally present in the drink that will be absorbed straight into the bloodstream.

Models have also predicted that higher sugar taxes could yield enormous economic benefits for governments worldwide. Raising prices on sugary drinks by up to 50% could generate revenues of $1.4tn (£1.1tn) over the course of half a century.

At the recent Partnership for Healthy Cities summit in Cape Town, supported by the WHO, Vital Strategies and the nonprofit Bloomberg Philanthropies, Cape Town mayor Geordin Hill-Lewis said that the immense economic burden of tackling rising rates of type 2 diabetes and high blood pressure means that broader taxes are necessary.

“I think so,” he says. “Because the cost to the state of dealing with those diseases is extraordinary and growing all the time, and so broadening that tax base would be helpful.”

Yet history shows that such attempts have too often been thwarted by well-organised commercial lobbies. A 2019 report found that powerful food multinationals have fought back using a similar playbook to the tobacco industry; namely, funding studies to deliberately obscure the connections between sugar and obesity, threatening job losses linked to sugar taxes and lobbying against proposed government legislation, particularly in low and middle-income countries.

Majija says that the South African government initially intended to implement a tax that would raise the price of sugar-sweetened beverages by 20%, but this was forced down to 11% by powerful industry forces. In the US, aggressive pushback from the sugar industry managed to reverse a tax in Cook county, Illinois, while taxes on saturated fat in Denmark as well as sweets and ice-cream in Finland have been repealed.

In the UK, there has been criticism of overly close ties between politicians and executives within the food industry, with the health secretary, Victoria Atkins, having to insist she had no conflict of interest after it was revealed that she is married to the managing director of British Sugar.

With a 20% tax, you can get a reduction in obesity and diabetes much sooner than if the tax was levied at a lower rateLuyanda Majija, Vital Strategies

Even in countries that have implemented sugar taxes on soft drinks, the WHO says that the levels are overall very low, varying from 3.4% to 18.4%, which limits the speed at which they may begin to make a difference to public health.

“With a 20% tax, you can get a reduction in obesity and other noncommunicable diseases like diabetes much sooner than if the tax was levied at a lower rate,” says Majija.

Amid the continuing cost of living crisis, Cornelsen says there is a reluctance by UK policymakers to contemplate anything that would push food prices higher, although she backs recommendations published in the national food strategy.

This calls for taxes on sugar and salt to incentivise big companies to reduce these additives in their products through reformulating the ingredients. “Another alternative would be to tax a specific category such as sweet snacks, which would target more discretionary consumption rather than all foods containing added sugar across the food basket,” she says.

Many public health experts point towards Latin American countries, which have made the most progress when it comes to ushering in broad-scoping taxes on entire categories of unhealthy foods, not just those including sugar. Cornelsen highlights Mexico’s 2014 tax on nonessential energy-dense foods, which was found to have reduced purchases of the items by 7% within a year. In November, Colombia passed a “junk food law”, making it one of the first countries to tax ultra-processed foods, encompassing industrially processed ready-made foods and others that are high in salt and saturated fat.

“You need countries that are willing,” says Luz Maria De-Regil, the head of policy and action in food systems at the WHO. “In Latin America, the double burden of malnutrition has been an issue for many years, [and] the nutrition community is very strong. And in Mexico, a key success factor was that the Institute of Public Health really was a leader in these conversations and willing to fight the fight in many ways.”

But ultimately, food taxes alone will not be a panacea in the fight against rising rates of obesity and chronic illnesses. Cornelsen says that there is also a need for restrictions on the advertising and promotion of unhealthy foods, simpler and more effective food labels and, most importantly, making healthier alternatives more affordable for lower-income families. She also argues that there is a need for a clearer labelling of the quantities of ingredients such as artificial sweeteners, which have come under the spotlight in the past couple of years because of concerns that they may be having an impact on our health.

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“I do wonder whether we need a clearer labelling of the quantity of sweeteners used to get a sense how much of it is consumed in the first place,” she says.

Shu Wen Ng, a nutrition professor at the University of North Carolina at Chapel Hill, points to several examples that have demonstrated how taxing unhealthy foods can be used to directly improve the food environment.

“In Seattle, for at least one year over the course of Covid, they allocated quite a lot of the revenue from their sugar-sweetened beverage tax towards grocery vouchers to low-income households,” she says. “So they were able to redirect that revenue to support healthier diets among high-need populations. And then in Philadelphia [where a 2017 tax was placed on sugar-sweetened and artificially sweetened drinks], it was communicated from the very beginning that a lot of the revenue was going to go towards supporting pre-kindergarten education.”

For Langa and many other places around the globe where poverty is rife, similar measures are desperately needed. “We need to teach and engage people the benefits of switching to a healthier lifestyle,” says Fesi. “But also the revenues from these taxes need to go back to help people who are living in such tough conditions.”