Sugar tax not bitter enough, say campaigners
The nonprofit Healthy Living Alliance (Heala) is lobbying the Treasury to raise tax on sugarsweetened beverages and expand the net to include fruit juices to increase its effect.
In 2018, SA became the first African country to introduce a sugar tax, known as the healthpromotion levy. The aim was to reduce the consumption of sugary drinks, and incentivise manufacturers to reformulate their products to contain less sugar. The levy, implemented in April 2018, was initially set at 2.1c per gramme of sugar per 100ml above a 4g threshold. It was increased to 2.2c a year later.
“The sugary drinks industry such as Coca-Cola have pushed back on the original call for a 20% tax to a point where the government compromised on an 11% tax. We are continuing our call for the tax to be increased so there can be real results,” said Heala programme director Lawrence Mbalati. Heala consists of nongovernmental organisations campaigning against SA’s rising levels of obesity and noncommunicable diseases.
The 4g threshold was not in the government’s initial proposals, and it was introduced in response to pressure from industry. The change reduced the tax levied on sugary drinks.
Heala said it was calling for an expansion of the sugary drinks tax to include fruit juices because although they were punted as a healthier alternative to fizzy drinks this was not the case. A 250ml glass of fruit juice contained on average 6½ teaspoons of sugar, a level comparable to that of many sugary sodas and energy drinks, it said.
Contrary to claims made by opponents to the sugar tax, it had not led to the loss of tens of thousands of jobs in associated industries, said Karen Hofman, director of the Wits Centre for Health Economics and Decision Science (Priceless SA).
An analysis of Stats SA’s quarterly labour force survey found employment had remained largely consistent with the trends before the implementation of the tax, she said.
In another study, published in August last year, the centre found the price of sugar-sweetened beverages increased by about R1 per litre after the implementation of the tax. There was no significant difference in the price increases of sodas low in sugar compared to those high in sugar. The price of drinks that were exempted from the tax, such as water and fruit juice, did not change significantly. The research also found many soda brands reformulated after the introduction of the tax.
“These preliminary results are promising. It will be important to watch how consumers respond to the price changes, and to assess how the tax rate and structure could be adapted to strengthen the health promotion levy’s impact on achieving public health goals,” she said.
Hofman said the Treasury raised R3.195bn in the first year that the levy was in force, which went to the national revenue fund, rather than being ringfenced for health expenditure.
The revenue collected for the first three quarters of the current financial year is lower than the comparable period the year before, according to Priceless’s research. “This could be due to reformulation or changes in sales,” she said.
6½ the number of teaspoons of sugar in an average 250ml glass of fruit juice
R3bn the tax raised in the first year of the levy on sugary drinks