Sugar tax works, study suggests

Mexican research shows ongoing drop in consumption of sugary drinks

The sugar tax in Mexico reduced consumption of sugary drinks even more in its second year of implementation than in its first, a new study in health affairs has found.

This has implications for South Africa, which is contemplating the introduction of a sugar tax on sweetened drinks.

Health Living Alliance spokeswoman Tracey Malawana said: “This new study provides compelling and timely new evidence that quick action is needed by parliament on a strong sugary drinks tax.”

One of the researchers, Professor Barry Popkin, of the University of North Carolina’s Gillings School of Global Public Health, said health researchers and economists used three different sets of data, but all came up with the same consistent result – Mexicans were drinking fewer sugary drinks.

Mexicans drank two to three litres of fizzy drinks a day, he said.

The tax led to an overall 5.5% reduction in the drinking of sugary drinks in the first year of implementation in 2014 and continued to decline, averaging a 9.7% reduction in the second year. Untaxed drinks, including bottled water, increased in volume at 2.1% in 2015.

Mexico’s poorest dropped their purchases of drinks the most, meaning the sugar tax affected them the most.

“They have the most undiagnosed diabetes, and diagnosed diabetics get the poorest treatment,” Popkin said.

He said they had the least money to spend on healthcare so it was good that tax had helped change behaviour.

The global beverage industry has heavily criticised Mexico’s sugar tax data, saying it did not work and used the so-called failures to encourage other governments, including South Africa, not to introduce one.

The industry reports the amount of money spent on soft drinks in Mexico increased during the tax.

“This is true,” Popkin said, “but it didn’t take into account the rising prices of drinks due to inflation and growth in population buying drinks.”

He said when the number of drinks sold was divided by the burgeoning population numbers, Mexicans individually drank less.

Popkin said economists conducting the study also analysed Mexican household purchase data and found households were buying less.

“Industry has never been able to question our methods.”

Popkin said the proposed reduction in sugar tax in South Africa would be a major setback for health as it would cut its effects in half.

It will be an estimated 11% on the price of Coca-Cola rather than the initial 20% proposed by the Treasury last year, and the tax on concentrate juice, to which water is added, will be even lower.

Popkin said if these low proposals (11%) were enforced, industry in South Africa would not be pushed by the tax to reformulate their drinks and reduce sugar content.

He said even if there were job losses, which he doubted would happen, in the long haul nearly 10 million people in South Africa would benefit from a more stringent sugar tax.

While the Treasury estimates 5 000 job losses, Popkin’s South African research estimates only 3 000 jobs, far less than the 60 000 the industry says are at risk.

“In Mexico, there have been no job losses because truck drivers will be distributing water in place of sugary drinks and bottling of drinks is largely automated,” Popkin said.