Sugar Sweetened Beverage taxes to reduce childhood obesity
A 500 word summary of Wetter and Hodge's article titled Taxing Sugar-Sweetened Beverages to Lower Childhood Obesity
Consuming SSBs regularly can increase risk of short and long term health impacts, especially in children. SSBs are packed with sugar and calories and consuming one SSB per day has been positively correlated with weight gain. SSB consumption is also associated with poor food choices, reduced acceptance of nutritious foods, and can also lead to higher medical costs and negative societal externalities.
Measures have been put in place to reduce SSB consumption. E.g. restaurants have voluntary policies to limit SSBs on children’s menus. Despite these efforts, SSBs are still being over consumed. More interventions from public and private sectors are needed. Taxation is one such intervention.
Lessons from tobacco taxation has provided policymakers with the knowledge and incentive to tax SSBs. SSB consumption, like smoking, starts early in life, and is greater in lower income groups. As a result, thanks to evidence from tobacco taxation, excise taxes on SSBs could curb consumption and raise revenue as long as the tax is at least 15% of the purchase price, due to the price elasticity of SSBs.
SSB excise taxes have been implemented in a number of countries including France, Belgium and Mexico. The Mexican excise tax resulted in a 6% reduction in SSB sales, and parents changed their behaviours and served fewer SSBs to their children.
Some US cities have also implemented SSB taxes despite worries that they could burden small businesses and cause job losses. Berkeley, California is one such city which implemented the tax in order to ‘take a stand to protect the health of our children’. Berkeley promoted the benefits of the tax on health and worked to overcome industry lobbying and framing efforts that opposed taxes. Industry sponsored anti-tax campaigns were revealed to the public which helped to gather public support.
In order to ensure that SSB taxes are effective, three components need to be considered: the definition of SSBs, the tax rate and how to responsibly allocate revenues.
The public define SSBs as non-diet drinks with added sugars or other calorie containing sweeteners but policy maker’s definitions can vary. Confusing definitions make it hard for consumers and manufacturers to know what drinks are included, and can diminish the overall effect of the tax. A broad and clear definition is needed to avoid confusion.
Most SSB taxes are based on volume, irrespective of sugar content. This method is easy to implement, but not effective for SSB reduction. Applying a tax based on added sugars is more effective. In the UK a tiered tax based on added sugar per 100ml is being implemented. SSBs containing 5g added sugar are taxed at one level, and SSBs containing 8g of sugar are taxed at a higher rate. Evidence suggests that this could help to deter intake and encourage manufactures to reformulate SSBs.
Allocation of tax revenues must reflect the disproportionate impact of the SSB on low income populations. Responsible allocation could be achieved through implementation of public health programs to help low income groups, as was done in Berkeley, California.
SSB taxes can help to encourage behavioural change and reduce consumption of SSBs. Data from areas where SSB taxes have been implemented provide evidence for the viability of such taxes. When future taxes are implemented governments must consider the definition of SSBs, the tax rate and how to allocate revenues.