Will sugar tax penalise the poor for their sweet tooth? Both sides get all a-fizz
In one corner: free-marketeers and the powerful sugary beverage industry. In the other: government and health activists. The battle around a proposed tax on soft drinks is heating up in South Africa – and neither side is wasting time on sweet talk.
The treasury recommended in July that every gram of sugar in a sugar-sweetened beverage should be taxed by R2.29.
This would see the price of a litre of soft drink – which includes products such as sweetened fruit juices and iced teas – rise by at least that amount.
That spells bad news for the fizzy drink titans. The deadline for comment on the treasury’s policy paper has just expired, and the Beverage Association of South Africa (BevSA) took the fight to the public this week. Nobody can argue that excessive consumption of soft drinks is good for you, so BevSA is focusing on an economic argument – warning that the proposed tax could cause more than 70 000 job losses and cost the economy R14-billion.
Health Minister Aaron Motsoaledi has rubbished these figures, accusing BevSA of employing the scare tactics of “economic hitmen”.
In the other camp, the government estimates the tax could add R11-billion to the fiscus – money that could be used to address the strain placed on the health system by obesity, heart disease and diabetes.
The government’s aim for the tax on sugar-sweetened beverages is twofold: to raise additional revenue for health services and to encourage South Africans to make healthier nutritional choices.
Science writer Leonie Joubert says it’s the correct approach. “It sends the right message,” she says. “It gets us thinking and talking about something in our diet which many still regard as relatively benign, and which is largely invisible in our diets – people often don’t realise how much sugar they’re taking in when they drink it.”
The message may be right, but the international evidence is mixed about whether such a tax has real effects on behaviour change. Mexico brought in a similar tax, and saw a 17% decline in soda consumption. But as academic Jacques Rousseau, who is based at the University of Cape Town’s school of management studies, points out, this only provides us with part of the picture.
“We don’t know whether sugar consumption overall has dropped, because people could independently be sweetening other drinks more or switching to other sweet items like chocolate,” says Rousseau, who teaches ethics and critical thinking.
“One might therefore wonder whether South Africa should be among the trailblazers here, rather than waiting for more data to come in.”
Some additional disagreement is about whether a product like sugar is fundamentally suitable for a sin tax.
“The underlying issue here is that sugary beverages are being placed in the same category as liquor and cigarettes, where it places a negative moral judgment on drinking sugary beverages,” says Rousseau, pointing out that many consumers of sugar-sweetened beverages can be classed as “responsible”, in that they enjoy the drinks in moderation.
“This [negative moral judgment] isn’t appropriate for a large number of consumers, who would now end up cross-subsidising ‘irresponsible’ drinkers,” he says.
But there is also a growing school of thought that maintains that it is accurate for sugar to be viewed as a potential source of destructive addiction, such as nicotine or alcohol.
“Our kids are protected from booze and tobacco by law, but not from sugar,” says Joubert, author of The Hungry Season, a book about obesity in South Africa.
Some South African children are drinking sugar-sweetened beverages from as early as their weaning months.
“This continues through their adolescence when they have young, immature and impulse-driven brains. Executive function of the frontal cortex only really kicks in at about 25 [years of age] – but by then they’ve learned this addictive behaviour.”
It’s known that poor households in South Africa consume a disproportionate amount of the sugar-sweetened beverages sold. This has led opponents of the tax to claim that it is a regressive form of taxation that will hit the poor hardest.
The Free Market Foundation’s Leon Louw wrote in March: “[Finance Minister Pravin Gordhan’s] victims mainly will be vulnerable, socially stigmatised, overweight people who happen to have a sweet tooth.”
Louw adds: “Gordhan will not and cannot tax sugar. Only people are taxed; all tax is people tax.”
These appeals to protect the poor are brushed off by health experts. Says Joubert: “The poor are already being hurt by their exposure to sugar.
“Sugar is cheap and almost ubiquitous in processed foods these days,” she adds. “But what happens when an indigent family loses its only breadwinner to the diseases associated with long-term exposure to sugar? None of the arguments against a sugar tax currently takes this into account.”
Department of health spokesperson Joe Maila is even more dismissive of the argument that such a tax is anti-poor.
“The poor do not have to buy sugary drinks for their survival,” he says. “In fact, this will help them improve on their health. We are aware that industry always uses the poor to argue against any healthy move the country is considering. They are misleading the poor to believe that if the tax is imposed they stand to lose, yet in this case they stand to benefit.”
But even if the government forges ahead with the tax, experts maintain far more extensive measures are needed to turn South Africans from unhealthy dietary measures.
“We will need much wider and more sophisticated regulation of sugar in future, beyond just in drinks, especially in relation to children’s exposure,” Joubert says.