Gordhan’s sweet deal for SA’s health

PRAVIN Gordhan is determined to make South Africans healthier, and to this end yesterday proposed that a 20 percent tax be imposed on sugary drinks.

The planned tax, which is expected to come into force next year, will delight health campaigners but dismay the beverage industry.

The statement gave the first concrete details of a tax that was first suggested by the finance minister in February – which the Beverage Association of SA has already dismissed as “discriminatory” and bound to fail.

“The proposed tax… comes against the backdrop of a growing global concern regarding obesity stemming from over-consumption of sugar,” the Treasury said on its website.

In a press release yesterday, the Treasury said that “fiscal measures such as taxes” were the right steps to stop South Africans from growing fatter and developing diseases such as heart disease, type-2 diabetes and some forms of cancer.

Some experts calculate that by 2030 total health-care expenditure related to adult diabetes will cost South Africa between $1 billion (R14.58 billion) and $2 billion.

More than half of South Africa’s adults are overweight, with 42 percent of women and 13 percent of men obese, according to Treasury data. Sub-Sahara’s most industrialised economy also has its most obese population, the figures reveal.

In previous media reports, researchers estimated that the growth in consumption of sugary drinks by 2.4 percent – the rate at which sales of sugar-sweetened beverages are expected to rise – could lead to an additional 1.3 million obese adults by 2017.

Coming just days after the Department of Health introduced salt-level limitations on commonly consumed goods, the Treasury released the policy paper yesterday on the sugar tax, and now wants the public to comment on it.

Countries such as Denmark, Finland, France, Hungary, Ireland, Mexico, Mauritius and Norway have levied a similar tax, while countries such as the UK, Thailand and Australia have plans to introduce the tax.

Sugar-sweetened beverages are the drinks that will be targeted for the proposed tax, and these drinks have added calorific sweeteners such as sucrose, high-fructose corn syrup (HFCS), or fruit juice concentrates, which include soft drinks, fruit drinks, sports and energy drinks, vitamin water drinks, sweetened iced tea, and lemonade. Items such as unsweetened milk and milk products and 100 percent fruit juice are excluded.

And South Africans love sweetened drinks. According to research from 1998 the market for soft drinks has more than doubled from 2 294 million litres to 4 746m litres in 2012, and studies showed that the consumption of carbonated drinks was less than maize meal and tea but more than milk.

When the idea was mooted earlier this year during Finance Minister Pravin Gordhan’s budget speech, the Beverage Association of South Africa (BevSA), said they were “extremely disappointed” at the proposal.

“There is mounting data showing that taxing one small part of consumers’ daily diet, where sugar-sweetened beverages represent less than 10 percent of daily caloric intake, will not result in any significant decrease in overall sugar consumption,” said BevSA.

The association called for greater research into the impact the tax will have.

Please share with us your thoughts on the sugar tax by e-mailing satmail@inl.co.za