Last month the United Kingdom announced a sugar tax on soft drinks. The tax will come into effect in 2018, with the funds to be used to address childhood obesity.
The move has been applauded by public health groups internationally. Unsurprisingly, the tax is strongly opposed by powerful groups in the food industry, and the announcement resulted in shares in Coca-Cola temporarily plunging.
In our new research published today in PLOS ONE, for the first time we have modelled the impact of such a tax in Australia. Over 25 years, a 20% rise in the price of soft drinks and flavoured mineral waters would save 1,600 lives. It would also prevent 4,400 heart attacks and 1,100 strokes.
Overall, the savings to the health-care system would add up to A$609 million.
It’s time for Australia to follow the UK’s lead and increase the price of sugary drinks.
What’s wrong with sugary drinks?
The evidence of the negative health impact of these products is clear, particularly with respect to dental health. Sugary drinks are also associated with increased energy intake and, in turn, weight gain and obesity.
Obesity is a leading risk factor for type 2 diabetes, heart disease and some cancers.
Soft drinks are very popular, particularly among children and adolescents. So there is much to be gained, from a population health perspective, from limiting their consumption.
Many countries have already recognised the potential to improve population health by taxing sugary drinks. In recent years, Hungary, Mexico, France and Chile have all implemented a tax. The UK announcement follows a similar one by South Africa earlier in 2016.
Potential impact in Australia
Our PLOS ONE research examined the potential impact of a 20% rise in the prices of sugar-sweetened carbonated soft drinks and flavoured mineral waters on health, health-care expenditure and potential revenue.
As expected, the tax would result in people decreasing their consumption of sugary drinks. The influence of a price increase would be greatest on those who drink a lot of sugary drinks, so the greatest impact would be on younger age groups. This is an important result that is difficult to achieve through other obesity-prevention measures.
The decreases in consumption would result in small declines in the prevalence of obesity of about 0.7% in men and 0.3% in women.
When the health benefits of these changes are modelled for the whole population over their lifetime, the influence of the tax is substantial. The research estimates that it would reduce the number of new type 2 diabetes cases by approximately 800 per year.
Twenty five years after the introduction of the tax, there would be 4,400 fewer cases of heart disease and 1,100 fewer strokes. An estimated 1,600 people would be alive as a result of the tax. Overall, the savings to the health-care system would add up to A$609 million.
Even taking into account declines in consumption, the revenue collected from the tax would be more than A$400m annually. This would provide the government with a significant pool of funds to subsidise healthy food for low-income Australians, contribute to childhood obesity-prevention programs and support the promotion of healthy eating.
If other beverages with added sugar not included in this study (such as energy drinks, fruit drinks, milk-based drinks and cordials) were also taxed, the revenue and health benefits would be even greater.
High sugary drink consumption in Australia
The World Health Organisation (WHO) recently released revised guidelines for sugars, recommending that energy from “free sugar” (added by manufacturers, cooks or the consumer) is limited to less than 10% overall.
A recent analysis of added sugar in the Australian population found that most adults and children exceed the WHO recommendation, with sugary drinks accounting for the largest proportion of added sugar.
Just looking at supermarket retail sales, Australians bought around 1.1 billion litres of sugary drinks in 2015 at a cost of A$2.2 billion. This doesn’t include what is bought from fast-food outlets, cinemas, vending machines, hotels and convenience stores.
In many remote Indigenous communities, sugary drink consumption is particularly high. Evidence to Senate Estimates revealed that, in the last financial year, remote Indigenous communities were buying 1.1 million litres of sugary soft drink through community stores. This elicited a response from Indigenous Affairs Minister Nigel Scullion who said:
I think in remote communities and very remote communities, sugar is just killing the population.
Strong public support
The sugary drinks industry, represented by the Australian Beverages Council, has widely criticised a tax on sugary drinks.
But the majority of Australians support such a tax. A survey in 2012 showed that two-thirds (65%) of respondents were in favour of a tax on soft drinks if the money was used to reduce the cost of healthy food.
This strong public support, together with the substantial health benefits and extra revenue that could be expected from the tax, should make it a highly attractive policy option for the Australian government.
At a time when the cost of preventable disease is threatening to overwhelm the health system, a tax on sugary drinks is an essential element of a comprehensive approach to address poor diets and overweight and obesity.
Gary Sacks, Senior Research Fellow, WHO Collaborating Centre for Obesity Prevention, Deakin University; Jane Martin, Executive Manager of the Obesity Policy Coalition; Senior Fellow, Faculty of Medicine, Dentistry and Health Sciences, University of Melbourne, and Lennert Veerman, Senior Research Fellow, School of Population Health, The University of Queensland