No sign of debate over sugar tax on soft drinks losing its fizz

A PROPOSED sugar tax will place the soft drink industry in a sticky situation – a drop in product sales which would result in thousands of job losses.

This is the argument of the beverages industry as the sugar tax wars heat up.

Treasury draft regulations propose a tax of 2c a gram of sugar in sweetened drinks.

The beverage industry said this could lead to price increases of up to 30% on some drinks and would result in 60 000 jobs lost.

Beverage Association of SA executive director Mapule Ncanywa said: “It’s most likely to [affect] small businesses such as spaza shops disproportionately.”

The proposal is out for comment until August 22.

A study by the Priceless unit at Wits University, run by Professor Karen Hofman, showed a tax of 20% on sugary drinks could result in reduced energy intake of about 36 kilojoules a day – and a decrease of more than 220 000 obese South African adults.

But Ncanywa said sugary drinks contributed to only 3% of South Africans’ energy intake and targeting them would make a negligible impact on people’s weight.

Hofman said the industry’s job-loss estimates were implausible and hypothetical.

Both parties cited different studies of Mexico’s experience to make their points.

Ncanywa gave three soft drink industry-sponsored studies, showing that consumption had declined slightly in Mexico.

While admitting that sales had not fallen significantly in Mexico, Ncanywa said the beverage industry estimated that 40 000 existing jobs had been lost in Mexico.

But Hofman questioned: “How did the tax lead to job losses if sales were not affected?”