Why a sugar tax does nothing for obesity

The Taxpayers’ Union has released a very good report on sugar taxes overseas, and why they would not affect rates in NZ.

Their summary:

  • Only 1.6 per cent of New Zealanders’ total energy intake comes from the added sugar content of sugar sweetened non-alcoholic beverages
  • New Zealanders’ consumption of sugar and sugar sweetened beverages is trending downward
  • New Zealanders are still getting fatter despite consuming less calories, suggesting that we’re not burning as many calories
  • Sugar taxes hurt the poor and do not result in the decreased consumption tax-supporters claim
  • Similar taxes overseas have not worked – Mexico’s tax on soda resulted in no decrease in consumption, despite recent claims to the contrary by New Zealand campaigners

Despite this, the media are full of stories today about another some academics claiming we need a 20% tax on saturated fat. None of these taxes have ever been shown to actually reduce obesity – at best they just change consumption habits from one source of calories to another.

The revelation that only 1.6% of our average calories comes from soda drinks shows how ridiculous the claims are that one can impact obesity with a soda tax.

Some extracts from the report:

Between 1997 and 2009 median daily sugar intake for New Zealand males fell from 62 to 55 grams while females showed a statistically insignificant decrease from 45 to 42 grams. This occurred at the same time obesity rates increased in the country from 17 per cent of the population to 27.7 per cent for males and from 20.6 per cent to 27.8 per cent for females.

Data that the academics who propose such taxes have never mentioned.

The New Zealand Adult Nutrition Survey shows that only 5.0 per cent of New Zealanders’ total energy intake comes from non-alcoholic beverages with 1.6 per cent of the total energy intake from just sucrose (a proxy for the added sugar content) of sugar-sweetened non-alcoholic beverages.

Picking out one source of calories is very unlikely to have any impact on obesity. The key is that overall net intake of calories needs to be approximately no more than 2,000 a day, This happens by eating less, or exercising more.

And as for the Mexican soda tax:

Nielsen sales data shows that there was no significant reduction in litres consumed in the twelve months to May 2013 (before the tax) and the twelve months to May 2015 (the first full year of data since the tax was introduced). Between these years, consumption of SSBs fell by 182 litres. 182 litres in a country that consumes over 11 billion litres of carbonated soft drinks is a flat result.

The difference between what activists claim, and what the sales data shows, results from the study being based on panel data and interviews and not actual accurate sales data. Expressed preferences are often skewed because what people say they do and what they actually do are often quite different. For example, when asked how often they use local libraries, members of the public tend to inflate their actual use. It appears here that participants have told researchers they are reducing their consumption of sugary drinks when the national sales data shows that not to be the case. The lesson here is actions speak louder than words.

And even if the tax did reduce consumption of soda drinks, that does not mean a reduction in calories, as people will often substitute.

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