How to reverse the course of “underused” sugar taxation in Europe?

The World Health Organization (WHO) is a proponent of taxing sugary drinks (SSB). According to the UN agency, it can be a useful tool, among other things, for governments to help prevent non-communicable diseases (NCDs).

Some European countries have already implemented taxes or levies on sugar. These include Belgium, Finland, France, Hungary, Ireland, Latvia, Monaco, Norway, Portugal and the United Kingdom.

For the most part, these countries’ taxes apply to soft drinks containing sugar, but some have also incorporated sweetened milk, juices and artificially sweetened drinks into the legislation.

“Taxation is a cost-effective policy that can improve health at the national level. By introducing taxes on sugary drinks, countries can reduce consumption levels of these drinks and reduce the associated risks of overweight and obesity, diabetes and other associated diseases,” said Dr Kremlin Wickramasinghe, acting head of the WHO European Office for the Prevention and Control of Non-Communicable Diseases.

However, uptake of sugar-sweetened beverage taxation is not as high as the WHO would like. Only 10 of the 53 countries in the WHO European Region have implemented taxes on sugary drinks at the national level.

“Taxation of sugary drinks is underused in the WHO European Region – only 19% of countries have adopted the measure,” said Wickramasinghe, co-author of a new report on the opportunities and challenges that exist in enforcing effective SSB taxation.

The results

The report is based on a study conducted by the WHO European Office for the Prevention and Control of Non-Communicable Diseases in collaboration with researchers from the University of Sydney, Australia.

The study found that all countries in Europe that had applied a tax on sugary drinks targeted industry rather than consumers.

Some countries in Europe that have imposed taxes on sugary drinks have done so with the explicit aim of reducing the consumption of sugary drinks and/or sugar. This was the case for France, Hungary, Ireland, Latvia, Norway, Portugal and the United Kingdom. In addition, taxes have been designed to achieve an explicit goal of reformulation, through differential tax rates with thresholds based on sugar content, which has happened in Hungary, Latvia and the UK , and via revised taxes in Finland and France.

For all countries, the design of taxation has been influenced by both health and economic considerations. But some Member States have chosen to focus on the economic effects of taxes on sugary drinks. In Belgium, Finland, France, Hungary, Norway and Portugal, for example, revenue generation was linked to the resolution of a budget deficit.

Often, policymakers have continued to rework or improve taxes in response to new evidence from the experience of taxing sugar-sweetened beverages in other countries. Following the introduction of the UK’s two-tier tax structure, for example, France and Norway decided to follow suit.

Not everyone wants SSB taxes

Of course, as might be interpreted by the low uptake of sugary drinks across Europe, not everyone is in favor of these forms of taxation.

Some, including those in the beverage industry, doubt that taxation actually brings public health benefits.

“Evidence of a strong positive impact of food or ingredient taxes on public health remains sparse to date,” ​a FoodDrinkEurope spokesperson told FoodNavigator.

Additionally, it has been suggested that changing consumer buying behavior does not always result in healthier choices. “While tax measures can change consumers’ buying behavior, this does not always translate into healthier choices, for example if the consumer buys substitute products or makes purchases across the border from his country.”

Another point raised by the trade association is that taxation is a ‘regressive instrument’, meaning that it hits the poorest consumer the hardest.

“In times of a global pandemic and likely economic downturns that societies are likely to face in the years to come, we are not convinced that this is the most appropriate policy tool for consumers or businesses. , especially SMEs still struggling with the impact of the coronavirus. ”

The WHO report noted that taxes on sugary drinks were strongly opposed by agribusiness stakeholders in all study countries, both before and after implementation, for the reasons reiterated by the FDE .

The researchers, however, did not conclude that the industry suffered significant losses due to the application of the taxes: “It was clear from the media in Finland, France, Portugal and the UK that taxes on sugary drinks had minimal economic impact on the industry.”

Inform decision-makers

The aim of the study was to inform policy makers and support the effective implementation of sugary drink taxation in the European region, Dr Wickramasinghe added.

Although there are “many different models” of taxing sugary drinks in Europe, the WHO has recommended overall that the tax base should reflect the health burden of consumption, as well as the cultural patterns of the country in question.

It was also felt that the design and implementation of sugary drink taxes would be more effective if finance and health policymakers developed the measures collaboratively. And that, as has been demonstrated in a number of countries, authorities know they can continue to improve them to align with new evidence and experience with taxing sugar-sweetened beverages in other countries.

And finally, that the support of non-governmental organizations, academics and other social actors can prove to be an “important asset” in favoring the adoption of the SSB tax.

Mary I. Bruner