UK research suggests “fat taxes” must be higher than 20 per cent to make an impact

Posted by AFN Staff Writers on 16th May 2012

Taxes on unhealthy ‘food and drinks’ would need to be at least 20 per cent to have a significant effect on diet-related conditions such as obesity and heart disease, according to a new report by UK academic experts.

Dr Oliver Mytton and colleagues at the University of Oxford, in England, examined existing evidence on the health effects of food taxes.

Their views come ahead of the 65th World Health Assembly taking place in Geneva on 21-26 May 2012 where prevention and control of non-communicable diseases will be a key issue for discussion.

An increasing number of countries are introducing, or considering introducing taxes on unhealthy food and drinks. These taxes have often been dubbed “fat taxes”.

Dr Mytton said that existing evidence suggests that taxing a wide range of unhealthy foods or nutrients is likely to result in greater health benefits than narrow taxes, they say, although the strongest evidence base is for tax on sugary drinks.

“For example, a US study found a 35 per cent tax on sugar sweetened drinks in a canteen led to a 26 per cent decline in sales,” Dr Mytton said.

“Meanwhile, modelling studies predict a 20 per cent tax on sugary drinks in the US would reduce obesity levels by 3.5 per cent, and suggest that extending VAT (at 17.5 per cent) to unhealthy foods in the UK could cut up to 2,700 heart disease deaths a year,” he added.

“Opinion polls from the US also put support for tax on sugary drinks at between 37 per cent and 72 per cent, particularly when the health benefits of the tax are emphasised.”

The research also points out that understanding the overall effect on health is complicated, and that policy makers need to be wary of negative effects, like changes in other important nutrients and compensatory behaviour that may increase energy intake or reduce energy expenditure.

Dr Mytton and his colleagues concluded that health related food taxes have the potential to improve health, but the tax would need to be at least 20 per cent to have a significant effect on population health.

Some opinions from within the food industry are that “fat taxes” would be ineffective and unfair. From a legislative point of view, it is unclear how such taxes are best introduced and enforced.

Questions have also been asked within the food and beverage industries about the health effect impact of high taxes on the alcohol drink sector. These taxes have been in existence for many years.

Some advocates of “fat taxes” say the revenues raised can be used by governments to treat diet related diseases, subsidise healthy foods, or to stimulate industry reformulation of food (such as removal of salt, sugar, or saturated fats from foods).