Are soft drinks taxes effective to fight obesity and overweight in Europe? UNESDA reacts to the European Commission’s new taxation report
On 19 July 2022, the European Commission published a new report entitled “Mapping of Fiscal Measures and Pricing Policies Applied to Food, Non-alcoholic and Alcoholic Beverages”. It maps existing fiscal measures and other pricing policies aiming to reduce the consumption of alcohol and of products high in fat, sugar, and salt (HFSS), including non-alcoholic beverages, in the countries participating in the EU health programme as well as Australia, Chile and the United States.
UNESDA Soft Drinks Europe appreciates the efforts made to assess the most efficient policies to create a healthier environment in the EU. The European soft drinks industry is committed to playing a meaningful role in the fight against overweight and obesity and welcomes the new data provided by the European Commission’s report.
In particular, UNESDA would like to highlight the following conclusions:
- Other policies than soft drinks and HFSS foods taxation can have a positive effect on Europeans’ health
- Today, there is no concrete, empirical evidence that selective taxation policies have reduced obesity, overweight and associated NCDs
- Soft drinks taxation applies to products that represent only a small share of total food and beverage intake
- Taxes based on the nutrient content of foods and beverages have better chances of changing consumer behaviour towards improved health & nutrition, encouraging cross-industry reformulation
Obesity is a complex issue requiring a multi-faceted approach
First of all, the report acknowledges the role of other policy measures to achieve positive health outcomes and recognises that “the impact on people’s overall dietary intakes is not large enough to allow these taxes to be viewed as a stand-alone strategy for dietary improvement” (page 2).
Overweight and obesity are indeed complex issues with multi-factorial causes requiring a multi-stakeholder approach with governments, industry, the healthcare community and civil society, among others, working together.
It is UNESDA’s position that the complexity of obesity does not lend itself to an isolated simplistic solution like a soft drinks tax. For many years, our industry has made far-reaching and successful commitments to reduce the average added sugar content of its drinks and promote moderate consumption. We are committed to continuing our actions to reformulate existing products, innovate to develop new products with lower sugar profiles, place promotion behind low- and no-calorie options to nudge consumer behaviour, and reduce pack sizes to help portion control.
No silver bullet – Taxation does not achieve wide health impacts
The report also confirms the lack of evidence to demonstrate that soft drink taxes are an effective approach to reduce obesity, overweight and associated NCDs:
- “While purchases of SSBs and HFSS foods are reduced following the initiation of fiscal measures, the degree to which this affects overall health outcomes, such as obesity and blood pressure, remains unclear based on current evidence.” (page 53)
UNESDA already reported that the European markets with soft drinks taxes in place, such as Finland, France, or Ireland, continue to report rising obesity rates with no evidence that taxation has had a positive impact on public health, while at the same time intake of sugar-sweetened soft drinks has fallen.
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Taxing soft drinks only is a simplistic approach that ignores the contribution of other nutrients and food categories to obesity or non-communicable diseases (NCDs)
The report also recognises that other types of foods and beverages should be considered in the scope of fiscal policies in order to maximise the impact on public health:
- ‘’The taxes are small in absolute terms and apply to products that represent only a small share of households’ overall food and beverage expenditures. Therefore, the impact of SSB taxes alone on dietary intake and health is likely to be small at best, despite consistent evidence of their effectiveness in reducing purchases of the taxed products in the available evidence base.’’ (page 11)
Soft drinks taxes discriminate against one product category by excluding some of the main food categories contributing to consumers’ sugar intake. This ignores the fact that soft drinks are often not the main contributor to free sugars intake. The EFSA Opinion on Dietary Sugars concluded that ‘sugars and confectionery’ (e.g. table sugar, honey, syrups, confectionery and water-based sweet desserts) are the food groups contributing the most to the intake of added and free sugars in European countries.
In its analysis of the tax implemented in the UK, the report states that to have “a more significant effect on overweight and obesity and corresponding non-communicable diseases, it has been recognised that the scope of the policy should be widened to apply to salt as well as sugar in all food and drink products” (page 192).
According to UNESDA, this confirms the need for fiscal policies not to discriminate against one particular product category but to encourage reformulation in all product categories contributing to consumers’ sugar, fat and salt intake.
Taxes based on the nutrient content of foods and beverages have better chances of achieving positive results
Finally, the report supports taxes based on the nutrient content in the foods and beverages targeted by the measures:
- ‘’Taxes based on the nutrient content in foods and beverages, rather than the volumes of foods and beverages purchased, have better chances of changing consumer behaviour in the direction of improved nutrition and health. Additionally, they can promote product reformulation with even larger effects on nutrient intakes than those deriving from a reduced demand for the taxed products.’’ (page 3)
Differentiated taxes (based on the nutrient content) have indeed a greater chance of stimulating reformulation and encouraging consumers to make alternative choices by nudging them toward lower-sugar beverages and of encouraging reformulation by manufacturers. It is UNESDA’s firm position that any sugar taxation scheme should exempt no and low-calorie products or adopt a tiered approach. A soft drink tax on no- and low-calorie soft drinks does not encourage consumers to purchase no and low-calorie beverages nor offers manufacturers any incentive to continue to reformulate their products, undermining the soft drinks sector’s ongoing efforts to nudge consumers towards healthier drink options. It also neglects the role of low and no-calorie sweeteners in helping reduce overall daily sugar/energy intake and therefore its positive contribution to weight management.
Nicholas Hodac, Director General of UNESDA, commented: ‘’We appreciate the European Commission’s efforts in providing an analysis of the fiscal measures on soft drinks, amongst others, currently in place in the EU. Several key conclusions from this report echo our sector’s views on soft drink takes, namely that the impact of soft drinks taxes on people’s overall dietary intakes is insignificant. Indeed, as a stand-alone strategy for health improvement, soft drinks taxes will never provide a tangible solution to wider public health issues like overweight and obesity. This is also demonstrated by various national dietary intake data and data from the WHO’s Health Behaviour in School-aged Children studies and the WHO European Childhood Obesity Surveillance Initiative Report, which show that, in several European countries, obesity rates have increased, while soft drink intake and frequency of soft drink consumption have fallen consistently across all age groups.’’
Nicholas Hodac added: ‘’Voluntary industry initiatives, including product reformulation, have proven to be an effective alternative to regulation. That’s why working together with all relevant stakeholders to further develop effective self-regulatory initiatives can enable all food categories to contribute to reducing the total sugar and calorie intake of European consumers in a more meaningful way.’’
Concluding remarks
While the new information and most conclusions provided by the report are welcomed, UNESDA remains critical regarding the report’s statement that fiscal policies, specifically SSBs taxation, are one of the most cost-effective interventions in terms of health policies.
UNESDA believes that taxation policies targeting only soft drinks are unlikely to help governments in achieving their public health objectives and improving the health of their citizens. They are a discriminatory measure to raise additional state funds, while not providing any tangible solution to public health-related issues.
UNESDA therefore urges governments to consider other more collaborative and meaningful efforts to help consumers make informed dietary choices. This includes encouraging product reformulation to increase the range of new no- and low-calorie products and offering small pack sizes for better portion control.
UNESDA commitments to support healthier dietary habits in Europe
UNESDA Soft Drinks Europe also highlights the European soft drinks industry’s continued voluntary actions on sugar reduction and package size reduction, responsible marketing and advertising practices to children under 13 years old, school policies and consumer information to help address overweight and obesity:
- Over the past 20 years, our sector has achieved considerable sugar reduction milestones such as a 13.3% reduction in average added sugars between 2000 and 2015 and a 17.7% reduction in average added sugars since 2015. We remain the first and only sector not only to have committed to the EU call for a 10% added sugars reduction by 2020, but to have significantly exceeded this target. Our new commitment to achieve an additional 10% sugar reduction by 2025 across Europe will represent an overall reduction of 33% in average added sugars in the past two decades.
- UNESDA members’ actions to support healthier dietary diets also include responsible marketing practices towards children since 2006. We have strengthened this commitment not to advertise ANY of our soft drinks to children under 13 years old across any media when at least 30% of its audience is made of children.
- Our sector has a long-standing commitment to act responsibly in EU schools: since 2006, we do not sell nor advertise ANY soft drinks in EU primary schools; and we only sell no- and low-calorie soft drinks in EU secondary schools and only in non-branded vending machines.
- Our sector is a global pioneer in displaying the amount of calories and sugars in its beverages along with additional nutrition information (‘guideline daily amounts’) on the front of pack. While front-of-pack nutrition information is not compulsory in the EU, our sector has provided it voluntarily to European consumers since 2008 to help them make well-informed choices.