On taxing fat and fizzy

Francis Sedgemore, Monday 18 February 2013 at 13:39 UTC

Well-intentioned interventions from UK medical professionals that address the growing problems of obesity and poor nutrition often display an ignorance of real-world human behaviour and economics. This damages the credibility of those who make such pronouncements, and people continue with their unhealthy lifestyles and expanding girths.

The latest call from medics in Britain is for a special tax on sugary drinks, and a broadcast ban on the advertising of fatty foods before the watershed. Removing junk food vending machines from hospitals and schools, together with better nutritional labelling, are ideas worthy of serious consideration, but the tax it and they will abstain thinking is naive.

Fizzy soft drinks of the non-diet type are, as the medics complain, “just water and sugar”, and they have a very high calorific content. But so too do energy drinks consumed in moderation by people who engage in aerobic activities, as well as in excess by couch potatoes who seldom if ever break a sweat. Low calorie alternatives are available, but there may be health risks associated with a high intake of certain kinds of synthetic sweeteners.

What about fruit juice concentrates? These contain natural fruit sugars rather than sucrose derived from sugar beet and cane, but the calorie content of supermarket fruit juice is high. If special taxes are to be imposed on sugary drinks, how to define which particular products are affected, without objections as to fairness? It could conceivably be done, and the challenges involved would be fewer than with taxes on fatty foods.

As regards foodstuffs high in saturated fats, many of these are healthy and recommended when consumed in moderation. Denmark for a short time imposed a fat tax designed to target foods such as potato chips and hot dogs, but the levy hit the market for quality dairy foods and bacon, among other things. Danish supermarkets were to a degree able to offset price rises by spreading the tax across other goods, but smaller retailers suffered disproportionately. At the same time as it abolished the fat tax, Denmark cancelled plans for a similar levy on sugary drinks.

The Danish fat tax was abolished last year, partly for evidence-based reasons, but also, it must be said, as the result of a broader political deal. Health lobbyists in Britain are cognisant of all aspects of the Danish experience, hence the focus on sugary drinks. However, calls for restrictions on the advertising of fatty foods are unlikely to survive first contact with reality.