The decision to put a tax on sugar sweetened beverages (SSB) was taken by the Treasury as part of their 2016 budget process – though the tax is only due to begin in 2017.
This tax is aimed at reducing a growing Non-communicable Disease epidemic and Oral health problems. There is good reason to believe from both local experience with tobacco and alcohol and international experiences with sugar (as well as tobacco and alcohol) that taxes are an excellent mediator of consumer behaviour.
The World Health Organisation’s guidelines recommend that adults and children reduce their intake of free sugars to less than 10% of total energy intake. A further reduction to below 5% or roughly 25 grams (6 teaspoons per day) would provide additional health benefits. Moreover the Commission on Childhood obesity set up by the WHO Director General recommended, inter alia, that taxes on SSBs would be an important mechanism to reduce childhood obesity. It is important to note that one 330ml of Coca Cola, for example, has around 8 teaspoons of sugar and therefore just one cold-drink would take the full recommended sugar intake a day – and many other foods and the sauces added to food also contain sugar, not to mention discretionary intake.
While the Department National of Health (NDoH) was not responsible for introducing the tax, this intervention was noted as a “best buy” in the Strategic Plan for the Prevention and Control of Non-Communicable Diseases 2013-17 as well as in the Strategy for the Prevention and Control of Obesity 2015-2020 of NDoH.
Research done by PRICELESS at the University of the Witwatersrand suggests that a 20% SSB tax could lead to a reduction by 3.8% in men and 2.4% in women or a decrease in obese people by 220 000 – mostly in the first 3 years. On the other hand without a tax soft drinks are projected to grow by 2.4% per year, predominantly amongst poorer people and this could lead to a 16% increase in obesity by 2017 or which 20% would be due to SSBs.
While the NDoH has not done specific calculations on costs to the economy, we have noted the global World Health Organisation estimates that high BMIs (Body Mass Index) drive between 2% and 7% of global healthcare spending with up to 20% of all healthcare spending attributable to obesity, through related diseases such as type 2 diabetes and heart disease. We do not have figures for the impacts of obesity on the economy as a whole but these would be substantial in terms of absenteeism due to obesity related illness and attendance at health facilities, lethargy at work and other impacts. A study conducted by the United States Chamber of Commerce found the total economic impact due to absenteeism, presenteeism (people who are at work but not working at full capacity due to illness) and early retirement in South Africa to be 6.8% of the GDP. Obesity and its associated disorders I one of the main reasons for this high figure.
Sugar also has negative impact on dental health and the related costs. Dental diseases, mainly linked to sugar intake, are the most prevalent NCDs globally causing pain, anxiety, functional limitation (including poor school and work attendance) and social handicap through tooth loss. While we do not have exact costs in South Africa the treatment of dental diseases is expensive, consuming 5–10% of health-care budgets in industrialised countries. A 2002 survey in SA showed that 60 percent of children of 6 years of age; 37 percent of of 12 year old and 50 percent of 15 year olds have dental caries and gum diseases; 86 percent of 15 year olds have unhealthy gums.
Excessive sugar consumption is a serious public health concern worldwide and has led, in recent decades, to a sharp increase in obesity and associated non-communicable diseases(NCDs) such as diabetes (Malik et al., 2010), cardiovascular disease (Yang et al., 2014), cancer (Chocarro-Calvo, García-Martínez, Ardila-González, De la Vieja, & García- Jiménez, 2013), and dental caries (Touger-Decker & Van Loveren, 2003). In 2013, 42% of women and 13.5% of men over 20 years of age had a Body Mass Index greater than or equal to 30 kg/m², making South Africa (SA) the third most obese nation on the African continent (Murray et al., 2013).
SSBs are seen as a good target for taxation internationally because (1) liquid sugar calories are especially harmful – drinking just one SSB per day increases an adult’s likelihood of being overweight by 27% and a child’s by 55% (Morenga, Mallard, & Mann, 2013); (2) SSBs are less satiating than solid sources of sugar, leading to the greater likelihood that they will be consumed in excess; (3) they contain little else apart from sugar, artificial chemicals, and water; (4) they account for around one-third of all sugar consumed by the average South African; (5) consumed to quench thirst after a meal adding more energy; (6) such a tax has already been implemented with varying amounts of success in other lower and middle-income countries (LMICs) with epidemics of obesity and related NCDs; and (7) it would send a clear message to the public and raise awareness about sugar, which is necessary in an environment where marketing and other industry practices are confusing the public and undermining the ability of consumers to make healthy choices.
NB: Limited references are inserted in this media statement to show that the NDoH’s position on sugar tax is evidence-based.
