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8 August 2016updated 09 Sep 2021 11:04am

The soft drinks tax isn’t looking so sweet after all

The soft drinks tax won’t tackle obesity but it will harm our economy, argues Gavin Partington, Director General of the British Soft Drinks Association.  

By Gavin Partington

In the last month, we’ve seen a new Prime Minister, a new Chancellor and the outline of a new vision for our country.

Following recent political events, it is time for stability and I welcome the new Government’s focus on the economy.

In light of this new economic climate, the Government must take an evidence-based policy approach.

Tackling obesity with evidence-based policy

It is right that the Government wants to tackle obesity in the UK, and with the forecast that two thirds of Britons will be overweight or obese by 2025, we at the British Soft Drinks Association recognise the challenge.

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As an industry, we support the Government in this objective, but in this new economic climate, evidence-based policy is more important than ever.

Firstly, there is no evidence worldwide that food taxes have any impact on levels of obesity.  In fact, the soft drinks tax in Mexico has reduced the average calorie intake by a mere 6 calories per person, per day in a country where the average daily calorie intake is over 3,000.  In 2013, Denmark abandoned plans for a tax and evidence from France shows that while sales of soft drinks initially fell after a tax was introduced in 2012 they are now back up to the levels before the tax was introduced.

Secondly, the UK proposal for a tax is based on 2012 data which does not take into account the substantial investment and changes made by soft drinks companies to reduce their consumers’ calorie intake over the last four years

Thirdly, the soft drinks tax has been forecasted to have a significant negative impact on the UK economy and local jobs.

New figures from a report by Oxford Economics show that the tax will lead to over 4,000 job losses and a £132m decline in UK GDP.

A recent TaxPayers’ Alliance paper highlights how these local job losses are likely to disproportionately impact on those with lower wages; it will also lead to the Treasury receiving £17 million less in job-related taxes.

And yet the tax will only lead to a reduction of 5 calories a day – the equivalent of just one bite of an apple.

The tax will cause damage to the real economy – to those who work in our local shops, pubs, factories and across the soft drinks supply chain.

The soft drinks tax will harm our economy in a time of heightened uncertainty. Because of this, the soft drinks tax must be thoroughly reviewed.

How else can we tackle obesity?

The most comprehensive study into tackling obesity by the McKinsey Global Institute found that reducing portion sizes and reformulating products had a far greater impact on levels of obesity than a tax, which would be 8-10 times less effective.

These are steps the soft drinks industry is already taking.  By widening the availability of smaller packs, removing sugar from their drinks and significantly increasing the promotion of low and no calorie options, soft drinks producers have reduced their consumers’ sugar intake by over 16% since 2012. In 2015 the soft drinks industry also became the only sector to set an ambitious target; to reduce calorie intake from soft drinks by 20% by 2020.

Instead of putting pressure on low wage jobs and local businesses, the government should be supporting and helping industry to invest and innovate to meet our ambitious target.

It is an approach that should be rewarded rather than punished.

A new chance for a new Chancellor

Evidence based policy truly matters more than ever before.

In light of Brexit, the Government must act in the interest of the whole country and make sound economic decisions, backed up with strong data and evidence.

Local jobs, pubs, shops and the wider supply chain must be protected.

It’s time for the Government to reconsider how we can tackle obesity.

With a new Cabinet, the Government should reconsider the consequences of their decisions and how they impact the real economy.  

Obesity is a problem and the solution must be shown to work.

Gavin Partington is the Director General of the British Soft Drink Association