UK to tax production of sugary soft drinks

In the 2016 Budget statement the UK Chancellor (Finance Minister) announced that a levy will be charged on manufacture of sugar sweetened soft drinks. Fruit juice and milk products will be excluded. It is expected to raise £520m (US$730m, €660m) in the first year 2018-19 (UK tax years start on 6th April) declining annually thereafter (£500m, £445m....)

Budget 2016 announces a new soft drinks industry levy targeted at producers and importers of soft drinks that contain added sugar. The levy will be designed to encourage companies to reformulate by reducing the amount of added sugar in the drinks they sell, moving consumers towards lower sugar alternatives, and reducing portion sizes.

Under this levy, if producers change their behaviour, they will pay less tax. The levy is expected to raise £520 million in the first year. The OBR expect that this number will fall over time as the total consumption of soft drinks in scope of the levy drops, in part as a result of producers changing their behaviour and helping consumers to make healthier choices.

According to the British Soft Drinks Association some 45% of carbonated drinks are "regular" rather than "mid" or "no/low" calorie at 6 and 49% respectively.   With a 2014 volume of 6380 million litres of total carbonates that makes 2870 m litres of regular sugar sweetened beverage so the proposed levy looks to cost 18 p/litre (25 US cents).

With the detail to be worked out and various exemptions for small producers etc the exact cost implication to the consumer remains to be seen. The sugar in a litre of 10% SSB probably costs ~4p so this levy is substantial compared to the manufacturer's costs.

There are two bands of levy proposed :-


Soft drinks industry levy

Soft drinks industry levy – The government will introduce a new soft drinks industry levy to be paid by producers and importers of soft drinks that contain added sugar. The levy will be charged on volumes according to total sugar content, with a main rate charge for drink above 5 grams of sugar per 100 millilitres and a higher rate for drinks with more than 8 grams of sugar per 100 millilitres. There will be an exclusion for small operators, and we will consult on the details over the summer, for legislation in Finance Bill 2017 and implementation from April 2018 onwards. (Finance Bill 2017)

Sugar Tax & UK Obesity

This morning the media are awash with PR from a UK Cancer Charity launching a study prepared by a coalition of charities that claims obesity can be reduced by 5% of the UK population by 2025.

I delved into the technical summary as I have an interest in these extrapolations. The claim is that a 20% excise tax levied on sweetened soft drinks could avoid 3.7 million people (about 5%) becoming obese (>=30 BMI) by 2025 and that without the tax obesity will rise from 29% in 2015 to 34% in 2025.

Everyone's a fruit and nut case

Earlier in the week I awoke to the radio pronouncing that eating fruit was better than eating nuts, or some such. Google turned up a Swedish study "A Randomized Study of the Effects of Additional Fruit and Nuts Consumption on Hepatic Fat Content, Cardiovascular Risk Factors and Basal Metabolic Rate" by Christian Agebratt et al.

This study set out to compare the effects of adding about 500 calories a day of either fruit or nut intake to the existing diet of some young lean active healthy Swedish students. The primary objective was to see if the sugar in the fruits had any adverse effect.

Sugar

A lot of media fluster about sugar this morning, some single issue campaigning group trying to make out that a single substance or group of substances is behind the "obesity epidemic".

I'm sure these underemployed cardiologists have looked at the evidence, but the sugar consumption thing has always intrigued me as I used to make the stuff. In the UK we make / import about 2.5 million tonnes of sugar net of exports and it has been like this for 30 years or more. I must dig out those statistics.

Meanwhile I looked at a UK Govt food survey statistical digest and pulled out the data below :-

I have also been reading a paper from 1995 which observed that ..

The prevalence of clinical obesity in Britain has doubled in the past decade.....  However, average recorded energy intake in Britain has declined substantially as obesity rates have escalated.

So the fans of calorie restriction have a real problem. They can't blame obesity on gluttony, as several datasets and studies show that our calorie intake is declining. So they're left with sloth and assuming that we're all doing 1000 calories a day less activity (yeah, right) to justify the increase in obesity.

Likewise the fructophobic cardiologists, in remission from lipophobia, are going to struggle to explain the effect of declining sugar intake on increasing obesity.