M Y S AY ON A SLIPPERY OR In fact, it is perfectly possible to kill oneself by excessive water consumption (hyper-hydration) or excessive vitamin consumption (hyper-vitaminosis). As with everything else in life, moderation is key when it comes to sugar. And there are good reasons to be concerned about our daily intake of carbohydrates. They are correctly linked to a number of health of problems ranging from tooth decay to diabetes and obesity. From a public policy perspective, this raises the question…what can be done about this problem? For many public health campaigners and policy-makers, the most obvious thought is to tax it out of existence. Indeed, the thinking behind initiatives for a sugar tax is seemingly plausible. As a tax makes sugary products less affordable, demand for them will fall, people will consume less sugar, and our health problems would be solved. Unfortunately, it is not that easy. What is currently being discussed is a new tax on sugary drinks such as the United Kingdom’s or Mexico’s respective sugar taxes. The first thing to note about such interventions is the fact that they are targeting just a narrow band of sugar-containing products, namely fizzy drinks. Thus a can of coke would be taxed, but a sweetened coffee would not. Bizarrely, chocolate bars would not be subject to such a tax either. When such a tax is introduced, it is thus to be expected that consumers will satisfy their sugar cravings in other ways. They may avoid the taxed fizzy drinks (or switch to cheaper brands), but there is not enough evidence to suggest that consumers will actually reduce their total sugar intake. The next problem is the magnitude re- 8 MAY 2016 Oliver Hartwich quired for taxes to have an impact. Sure, tobacco taxes have played their part in reducing demand for tobacco products. But with tobacco taxes we are talking about taxes that now well exceed the price of the taxed product. For sugar taxes, on the other hand, noone has yet asked for taxes of similar magnitude. A few extra cents per litre of fizzy drinks, however, will not lead to a significant decrease in consumption. And even if there was a moderate decrease, this could well be compensated for by other products as explained before. The next problem with sugar taxes is their regressive nature. In a world in which mainly people from lower socio economic backgrounds consume fizzy drinks, they would be hurt the most by these taxes. Unfortunately, these people are also the least likely to change their behaviour. These are the main problems with sugar taxes. They are response to an undisputed public health problem. However, they are also a very blunt, untargeted tool and we do not have much reason to believe that they will actually achieve their goals. As Treasury’s chief economist Girol Karacoglu recently warned, “There is a lot of self-serving, very sloppy analysis which doesn’t support the introduction of the kind of taxes we’re talking about.” Indeed. But the problem goes even further. Introducing new taxes and regulations for which no good economic case can be made sets a bad precedent for policy making. Such policy activism puts us on a slippery, or rather on a sugary slope. We should not just make policy because we want to be seen as doing something about a problem. We would want our actions to also have the desired effects. And on that measure, sugar taxes fall short. A better alternative would be to have a more informed debate about how sugar filled our lives have become, not just in drinks. And a reminder for ‘everything in moderation’ might well be more effective than even the most well-intentioned new tax. Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative. The Initiative’s report The Health of the State was released on 20 April and is available at www.nzinitiative.org.nz. SUGARY SLOPE There can be no doubt about it: Excessive sugar consumption is not conducive to better health. But then again, nothing excessive really is.
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