Health economist backs sugar tax proposal
ALTHOUGH the proposed tax on sugary drinks could impact jobs in the beverages industry, fewer South Africans would be affected by obesity which leads to chronic diseases such as diabetes.
This is according to Dr Frank Chaloupka, an internationally recognised health economist and distinguished professor of economics director at UIC Health Policy Centre University of Illinois at Chicago.
Chaloupka was speaking in Cape Town yesterday, ahead of him presenting his letter in parliament today, which cites the scientific evidence that links sugary drink consumption to obesity and related diseases and global evidence demonstrating the effectiveness of a tax on sugary drinks.
The Parliamentary Standing Committee on Finance will conduct public hearings today to discuss the planned tax on sugary drinks.
Last year, the Minister of Finance, Pravin Gordhan, announced a plan to tax sugary drinks such as soft drinks, energy drinks and sweetened milks by April this year, as a measure to lower the consumption of these harmful products.
Chaloupka was part of more than 40 global and South African scholars who expressed their support of the sugary drink tax in South Africa, recently.
He said sugary drinks are a significant contributor to serious health problems such as diabetes, obesity, and heart disease and that obesity related diseases are among the top 10 causes of death, accounting for 43 percent of deaths in South Africa.
‘Keep in mind that it really has the biggest effect in the most vulnerable populations.’
Chaloupka’s research focuses on the use of fiscal policies to promote healthier behaviours and has conducted extensive research on the impact of taxes and prices in sugary beverage consumption, obesity, health care costs, government revenues, employment and other outcomes.
Chaloupka said taxes on sugary drinks were considered to be an effective measure to lower the consumption of sugary drinks by public health experts.
“The evidence is clear that over the last several years that sugary beverage consumption in particular is a significant contributor to obesity which is becoming a problem in South Africa.
“It is really a cause for Type 2 diabetes in particular and that is going to be a significant problem for many people in South Africa. It is happening all over the world.”
He said Type 2 diabetes used to be almost non-existent with children and with sugary consumption going up it is becoming more common.
“So what we know is that when a tax like this is adopted it leads to a significant increase in price and that price increase reduces consumption. The important thing to keep in mind is that it really has the biggest effect in the most vulnerable populations.”
Chaloupka said diabetes had a long-term impact and cost a lot of money to treat. He said Mexico had adapted quite well to the tax impact and has seen a reduction in consumption of sugary drinks and an increase in healthier options while also generating significant revenue for the country’s government.
One of the arguments that comes up all the time is the issue of jobs and the impact it will have on small businesses. “It is the opposite with a tax like this. You would see some job losses in the beverage industry, but not as bad as the tobacco industry.”
Meanwhile, the Beverage Association of South Africa (BevSA) welcomed the decision by the World Health Organisation’s (WHO) executive board not to endorse recommendations to impose a soft drinks tax on member states.
BevSA’s executive director, Mapule Ncanywa, said the decision was made recently during the executive board’s assessment of proposed cost effective interventions or “best buys” to address non-communicable diseases.
“The call by the WHO executive board for technical consultation before the next World Health Assembly to review studies and documentation including methodology followed by WHO, is aligned with the view of BevSA that a comprehensive understanding of the role of sugar in the overall diet needs to be in place. BevSA welcomes the views of those member states, including Canada, Italy, US and New Zealand, who raised concerns and opposition over a national soft drinks tax.”
Ncanywa said a sugar tax would harm the beverages industry and South Africa’s economic growth prospects, while delivering very limited health benefits.
“BevSA is committed to being part of the solution to reduce obesity in South Africa. The proposed tax on sugar sweetened beverages will have substantial unintended economic consequences.”