Taxation of low- or no-calorie beverages lacks policy coherence and undermines sugar reduction efforts
Around the globe, governments, international organisations, and industry are making major efforts to encourage people to reduce their sugar consumption. Taxing low- or no-calorie beverages opposes these efforts and is counterproductive: consumers are not motivated to reduce their beverage calories, and the tax is effectively disincentivizing manufacturers from innovating and offering more lower-sugar options.
According to the European Commission’s report “Mapping of Fiscal Measures and Pricing Policies Applied to Food, Non-alcoholic and Alcoholic Beverages”, taxes based on the nutrient content of foods and beverages have better chances of achieving positive results in addressing non-communicable diseases:
‘’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 (i.e., 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. If a tax is implemented in sugar products, a tiered approach should be adopted. A soft drink tax on low- and no-calorie soft drinks does not encourage consumers to purchase low- and no-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 their positive contribution to weight management.
At a time when the rates of obesity and non-communicable diseases remain a concern worldwide and public health authorities are encouraging food manufacturers to replace sugar and reduce calories, the recognition of low- and no-calorie sweeteners as a safe and useful alternative to sugar is paramount:
- Low- and no-calorie sweeteners in soft drinks have been repeatedly confirmed as safe to use by health regulators globally following assessments by food safety scientific bodies, such as the European Food Safety Authority (EFSA).
- A number of studies have shown indicators of diet quality to be higher in consumers of low- and no-calorie sweetened beverages.1
- Differentiated taxes (i.e. taxes based on the sugar content of the beverages) have a greater chance of encouraging consumers to make alternative choices by nudging them toward lower-sugar beverages through pricing. If consumers pay less for a lower-sugar drink than for a higher-sugar one, they have a financial incentive to make an alternative choice.
- Differentiated taxes may also encourage manufacturers, distributors, and retailers to redesign their existing product portfolio and marketing plans to favour drinks with less sugar, in order to avoid the higher tax rate.
The inclusion of low- and no-calorie sweetened beverages in taxation schemes undermines the benefits that these provide to consumers, including people living with obesity and people with diabetes whose food and beverage choices are more limited.2
Taxes covering beverages with low- and no-calories do not take into account that health organisations globally recognise the role low- and no-calorie sweeteners can play in helping people manage their weight and diabetes.3
- Consuming a low- or no-calorie sweetened beverage instead of the sugar-sweetened version can help reduce overall daily sugar and calorie intake.4 Lower sugars and calorie intake can help with weight loss and maintenance, as supported by results of long term studies in both adults and children.4 Choosing a low- or no-calorie sweetened beverage rather than a sugar-containing drink may be particularly beneficial to both adults and children who are overweight or obese.5
- By reducing the calorie content of food while retaining sweetness, low- and no-calorie sweeteners can also satisfy a desire for sweet food and drink while helping control weight. People who were previously overweight or obese and have managed to maintain long term weight loss report drinking more low- and no-calorie sweetened beverages, suggesting they may be an important aspect of a successful weight loss maintenance strategy.6
Evidence also shows that low- and no-calorie sweeteners do not raise blood glucose levels or affect blood glucose control.7 The availability of approved low- and no-calorie sweeteners has therefore made possible a wider range of lower sugar products that can provide a greater choice for people with diabetes.
1 Gibson, S., et al., 2016 https://doi.org/10.3390/nu8010009; Leahy, M., et al., 2017 https://doi.org/10.3390/nu9090928; Patel, L., et al., 2018 https://doi.org/10.3390/nu10091261
2 Reynolds, A., et al., 2023 https://doi.org/10.1007/s00125-023-05894-8; Brown, J., et al., 2022 https://obesitycanada.ca/guidelines/nutrition/
3 Reynolds, A., et al., 2023 https://doi.org/10.1007/s00125-023-05894-8; Brown, J., et al., 2022 https://obesitycanada.ca/guidelines/nutrition/; Skurk, T., et al., 2022 https://doi.org/10.1055/a-1624-5095; Dyson, P. A., et al., 2018 https://doi.org/10.1111/dme.13603; Helsedirektoratet. Nasjonal faglig retningslinje for diabetes. 2022; Available from: https://www.helsedirektoratet.no/retningslinjer/diabetes
4 World Health Organization, M. Rios-Leyvraz, and J. Montez, 2022 https://www.who.int/publications/i/item/9789240046429
5 Laviada-Molina, H., et al., 2020 https://doi.org/10.1111/obr.13020; Katan, M.B., et al., 2016 https://doi.org/10.1371/journal.pone.0159771
6 Phelan, S., et al., 2005 https://doi.org/10.1038/ijo.2009.147
7 Nichol AD, Holle MJ, An R., 2018 https://doi.org/10.1038/s41430-018-0170-6