British sugar tax takes the fizz out of Big Soda
Faced with writer's block, Def Leppard lead vocalist Joe Elliot asked his producer to "Just pour some sugar on me" for his cup of tea. Or so the story behind the iconic song goes. In the Britain of 2016, Elliott would have had to think twice before coming up with lyrics like that - because in all likelihood he would have got a disapproving nod from British Chancellor George Osborne. Also a tax on sugar.
Osborne recently presented the UK budget and one of the major highlights that has alarmed the soft drinks industry is his proposal to levy sugar taxes. That's right. If Osborne's proposal comes into effect, the UK will impose sugar tax, particularly aimed at beverages such as Coca-Cola and Pepsi.
"You cannot have a long-term plan for the country unless you have a long-term plan for our children's healthcare," said Osborne in his budget statement before going on to say that: "I am not prepared to look back at my time here in this Parliament, doing this job and say to my children's generation: "I'm sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing."
Here's the gist of what Osborne proposed: First, it will be implemented in two years time to give companies a chance to adjust or change their recipes and make it less sugary. The tax though will be levied on both the volume of the sugar-sweetened drinks they produce and import. Broadly speaking there will be two kinds of tax slabs - one for total sugar content above 5 grams per 100 millilitres; the second will be for the more sugary drinks that exceed sugar levels of 8 grams per 100 millilitres. Exemptions will only be made for pure fruit juices and milk-based drinks
Osborne pointed out though that a lot of industry players were already either adhering to the prescribed limits or are making efforts to cut down, which is a healthy trend in a world where obesity that "drives disease," is a major problem - "Five-year-old children are consuming their body weight in sugar every year. Experts predict that within a generation over half of all boys, and 70% of girls could be overweight or obese."
Any discussion of colas is of course incomplete without establishing how it adversely affects our health. "One of the biggest contributors to childhood obesity is sugary drinks. A can of cola typically has nine teaspoons of sugar in it. Some popular drinks have as many as 13. That can be more than double a child's recommended added sugar intake," said Osborne.
The levy is expected to raise as much as 520 million pounds! Where will all that money be re-routed? Osborne says the money saved will go towards doubling the funding UK has in store for sport in all primary schools.
The levy predictably has hit the, ahem, sweet spot of some key industry players. So much that following Osborne's announcement British sugar company Tate and Lyle's shares suffered a 4 percent loss.
Gavin Partington, Director General of British Soft Drinks Association, told Business Insider that, "We are the only category in the food and drink sector which has consistently reduced sugar intake in recent years - down 13.6% since 2012. By contrast sugar and calorie intake from all other major take home food categories is increasing - which makes the targeting of soft drinks simply absurd."
For Osborne, there is support from another prominent personality - Jamie Oliver. The celebrated chef had placed a sugar tax in place at his own restaurants as well (about 15 cents for every drink containing added sugar), and has been a vocal critic of sugar, specifically when it comes to the soft drinks industry. Oliver expressed his support and joy on social media immediately following news of the tax.
We did it guys !!we did it !!! A sugar levy on sugary sweetened drinks ...... A profound move. https://t.co/0XkydLzLCo- Jamie Oliver (@jamieoliver) March 16, 2016
We did it guys !!we did it !!! A sugar levy on sugary sweetened drinks ...... A profound move that will ripple around the world ....business can not come between our Kids health !! Our kids health comes first ..... Bold, brave , logical and supported by all the right people....now bring on the whole strategy soon to come ... Amazing news #jamieoliver
A photo posted by Jamie Oliver (@jamieoliver) on Mar 16, 2016 at 6:32am PDT
In a 2015 interview on BBC Newsnight, Oliver had explained why it was the soft drinks industry specially that must bear the burden of a sugar tax:
Oliver appealed to other world leaders as well to be proactive when it comes to making policy that favours taxing sugar. Easier said than done perhaps, given how former New York City mayor Michael Bloomberg tried, unsuccessfully, to ban soda in 2013. Critics have come out with arguments saying the tax on sugar is basically a snobbish move that'll hit low income households the most. Here's a video from The Telegraph that illustrates why taxing sugar is in fact, a bad idea:
The debate isn't going to get easier for Big Sodas however. In 2015 Coca Cola made bad news again when it cut ties with a health research non-profit that it funded (about $1.5 million). Why? Because there were emails which leaked showing how Coke had tried to influence the research organisation at multiple levels.
Incidents like these aren't uncommon and soda companies would do well to increase transparency about their nutritional facts and decrease sugar levels in their products. Tax measures like this one may not solve childhood obesity but it'll certainly be a step forward in the right direction.
Edited by Lamat R. Hasan
More in Catch: