Guest Post: SUGAR TAXES IN NEW ZEALAND INEVITABLE
A guest post by Carrick Graham:
Last week the British chancellor George Osborne surprise announcement of a sugar tax rippled around the world. Pro sugar tax activists where ecstatic and immediately called for New Zealand’s Health Minister Jonathan Coleman to follow suit.
Those opposed to sugar taxes (this author included) provided commentary showing that the evidence for a sugar tax doesn’t stack up.
Predictably, accusations started flying saying these sorts of comments were typical of ‘Big Food’ trying to protect its profits, whereas the health lobby were only concerned about the health of children who are becoming more obese.
Thankfully, the political reaction by Jonathan Coleman was a text-book political play. With two sides of the argument essentially diametrically opposed – but wanting the same outcome of reduced obesity rates, the health minister saw no need for a knee-jerk reaction on the issue. But his comments left the door open on the issue of a sugar tax.
For those wondering where this debate will go, here is a view of how the sugar tax issue will likely be played out in New Zealand over the next 5 years.
The Government will watch how its 22 initiatives to combat obesity, including targeted interventions for those who are obese and increased support for those at risk of becoming obese, play out in the real-world.
That buys it some time, allows it to say it is doing something, while leaving room to maneuverer on the issue, particularly as it waits for the results of a couple of major studies due late 2017.
Public health researchers, particularly those who favour a sugar tax, will continue to dream up with innovative research topics that demonstrate ‘the effects of education on changing people’s diets’ doesn’t work. Predictably, a key outcome of this research will be the comment in the closing remarks that ‘more research is needed’.
The irony is that the majority of the sugar tax campaigners are from organisations which stand to benefit from collected funds seems lost on many.
Another year will roll by and another $30-$40 million will be added to the $317.5 million already spent over the past 10 years by the Government to address obesity issues.
Industry will continue to be vilified by politicians, called amongst other things ‘noxious industries’ and face grilling after grilling at Parliamentary Select Committees hearings and in the media on obesity issues.
The Green Party health spokesperson Kevin Hague will continue his messaging that ‘all the evidence shows that sugar is damaging the health of New Zealand children and is driving our obesity epidemic’ and will continue to refuse to look at the latest sales data from Mexico showing, without any doubt, the tax on fizzy drinks has made almost no change to sales volumes in the two years since a sugar tax was implemented in January 2014. Engagement with the Greens is pointless.
The Labour Party position on a sugar tax will fluctuate like the tides, with health spokesperson Annette King saying in November 2015 ‘they would not rule out a tax on fizzy drinks’, while four months later saying ‘the party would not tax soft drinks as that would not address the problem of sugar levels in processed foods’. Their position is likely to shift back to favouring a sugar tax, but they will give industry a chance to make product changes.
Manufacturers, will continue to make product reformulations that meet consumer demands, as consumers’ become increasingly conscious that high sugary drinks can be bad for your health. Companies will however, maintain a broad portfolio of products for all consumers – regardless of sugar content.
Manufacturers will also continue to stay true to one of the fundamental tenant of nutrition that energy balance – the balance of calories consumed through eating and drinking compared to calories burned through physical activity, actually works and more importantly because it is true.
Leading public health advocates for a sugar tax, including the University of Auckland’s Professor Boyd Swinburn and Cliona Ni Mhurchu while no doubt feeling deflated at the current ‘rejection of a sugar tax’ will win in the end as they, and others, pump out research after research as evidence justifying a tax.
The conditioning of the public against soft drink manufacturers and the need to have a sugar tax will inevitably wear down any political will to state the blindingly obvious that no sugar tax will stop people consuming a can of Coca-Cola if that’s what they want.
The tide has turned and sugar taxes are inevitable in New Zealand.
On a brighter note for the manufacturers hit with this tax, it presents a win-fall for companies as they can slip in a ‘manufacturers increase’ at the same time they pass on the tax to New Zealand consumers. The government will cop the blame for any price increase while the companies can report larger profits to shareholders.
To companies, the tax ultimately is like any other cost to their business – they just pay it and allocate the cost across all their products.
The question whether the sugar tax will help resolve the obesity debate will simply become academic as it’s a box that has already been ticked off.
The question then becomes one of what’s next.
Carrick Graham is Managing Director of Facilitate Communications and has advised clients on how to deal with increasing calls for regulation and restrictions on products within the food supply chain.