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Australia should follow UK with 20% sugary drinks tax

Thursday 17 March, 2016
The Federal Government should implement a 20% tax on sugary drinks to improve the health of Australians and reduce the burden of chronic disease, according to Jane Martin, Executive Manager, Obesity Policy Coalition.

"It's encouraging to see the UK government's bold move in addressing the issue of consumption of sugary drinks with the announcement of a tax overnight.

"Strong action like this is needed to address the serious and growing health burden of overweight and obesity in this country - particularly in children. Sugary drinks are popular with children and young people, and they are the largest source (around 20%) of added sugar in children's diets. With one in four children overweight or obese, this is an issue we can't afford to ignore any longer.

"The Australian Government should introduce a levy of 20% on the retail price of sugary drinks. Evidence from other countries that have implemented similar taxes shows that consumers are sensitive to the price of sugary drinks and this directly impacts demand - it is a very powerful policy tool," Ms Martin said.

Research in the UK and Australia has estimated that a price increase of 20% on sugary drinks is likely to result in a decrease in consumption of sugary drinks and a reduction in population weight.

In the 12 months following the introduction of a sugary drinks tax in Mexico, purchases of taxed beverages had declined by 12% and 98% of people surveyed were aware of the health impacts.

"There is already strong public support by Australians to increase the price of sugary drinks if the money raised supports healthy eating. An OPC survey into the attitudes of Australian grocery buyers found around two-thirds of respondents were in favour of a tax on soft drinks where the money was used to reduce the cost of healthy food.

"A tax based on sugar levels as outlined in the UK will encourage beverage manufacturers to reformulate their products to reduce the sugar content.

"Increasing the price of sugary drinks is an important element of a comprehensive and coordinated set of policies to address obesity. This should also include restrictions on unhealthy food marketing to children, an education campaign to highlight the health effects associated with sugary drinks and mandatory Health Star labels on food packaging," said Ms Martin.

Countries with a sugary drinks tax

Country Tax covers  Results
Hungary (2011)
  • Excise on soft drinks, energy drinks, confectionary, snacks that are high in sugar
  • 40% of manufacturers reformulated their products
  • Demand for sugary drinks reduced by 7.5% by 2012.
France (2012)
  • All beverages that are sweetened with sugar or artificial sweeteners
  • Demand reduced by 3.3% in 2012 and 3.4% in 2013
Norway (1981, 2011)
  • Non-alcoholic beverages containing added sugar or sweeteners
  • Consumption of lemonade and regular sugary drink decreased from 4.8 to 2.5 and 1.6 times per week respectively between 2001 and 2008
Mexico
  • 1 peso excise tax per litre of sugar sweetened beverage (all non-dairy and non-alcoholic beverages with added sugar, including juice). 
  • An 8% value added tax was also applied to high-calorie snacks, i.e. potato chips and cookies. 
  • 1 peso per litre is equivalent to approximately 10% of the purchase price. 
  • An evaluation by the Mexican National Institute of Public Health and the Carolina Population Centre at the University of North Carolina found an average reduction of 12% in the purchase of taxed beverages from the date the tax was introduced (1 January 2014) to December 2014.