HEALTH NEWS

Do Poor Countries Need to Impose Soda Taxes?

Written by Matthew Berger on May 15, 2017
soda tax

Even as more U.S. cities adopt soda taxes to make sugar-sweetened beverages less affordable, the price of those beverages is falling elsewhere in the world.

Globally, people could afford to buy 71 percent more Coca-Cola in 2016 than in 1990, according to a new study from the American Cancer Society.

That price decrease could mean sugar-sweetened beverages are getting more accessible and are more likely to accelerate a rising rate of obesity around the world, the report says.

“This environment of increasingly affordable sugar-sweetened beverages will inevitably drive increased consumption of such products, and will certainly hamper global efforts to address the overweight and obesity epidemic,” the authors conclude.

“You just can’t consume a lot of these beverages and maintain a healthy weight. They’re calorie-dense and have no nutrition value whatsoever,” Jeffrey Drope, vice president of economic and health policy research at the American Cancer Society, and a co-author of the study, told Healthline.

Read more: Reducing sugar in sodas would greatly reduce obesity and diabetes »

Strategy behind price decrease

The average price of Coke and annual incomes varied among the countries studied.

The soft drink also didn’t become more affordable everywhere.

However, the bump in affordability was most pronounced in developing countries, where people could buy 89 percent more Coke in 2016 than in 1990 with the same percentage of their income.

That made the sugary drink nearly twice as affordable, according to the study.

That’s no accident, the authors say.

“The industry undermines people’s ability to resist overconsuming sugar-sweetened beverages by lowering the unit price as product size increases,” they write.

A general trend of rising incomes has increased the affordability of many goods in recent decades.

But the researchers found the drop in the price of Coke relative to incomes was still significant, especially since the prices of many other goods went up.

The price of bottled water, for instance — which the researchers analyzed as a control — rose over those decades.

So did the price of tobacco.

Read more: The skinny on soda taxes »

The effect of cigarette, soda taxes

Drope says they went into the study not knowing what they were going to find.

However, they knew that tobacco prices had risen, in part through taxes, and that tobacco has become less affordable despite rising incomes.

For Coke, it turned out, that wasn’t the case.

Even in countries that have experienced drawn-out economic crises, like Papua New Guinea and Zimbabwe, Coke became more affordable.

The study analyzed Coke prices based on The Economist’s Intelligence Unit indexes. It used that metric to characterize the affordability of sugar-sweetened beverages as a whole.

Drope says there’s strong price convergence between different brands and types of sugar-sweetened beverages, and that they are largely direct economic substitutes.

Drope would like to see taxes have the same effect on Coke prices as they have on tobacco.

“Taxing is the single most effective tool. It works really, really well with cigarettes. We’ve seen it working in Mexico,” he said.

Mexico is second to the United States among OECD countries in overall obesity prevalence and first in female obesity.

It implemented a nationwide tax on sugar-sweetened beverages in 2014. That year, sales of those drinks fell. They fell again in 2015, the most recent year of data.

In the United States, Berkeley, Calif., was the first of several cities and counties to approve soda taxes. After Berkeley’s one-cent-per-ounce levy went into effect, consumption of sugar-sweetened beverages decreased 21 percent, and sales fell by 9.6 percent while rising in surrounding cities.

The World Health Organization (WHO) has been urging more countries to join the soda tax trend.

The agency has seen obesity prevalence among adults more than double globally between 1980 and 2014 and attributes 1.5 million deaths in 2012 directly to obesity.

Leo Nederveen, of the WHO’s Department of Chronic Diseases and Health Promotion, says that’s due to increasing sugar consumption and a general move toward high-salt, fast food, and heavily processed diets as populations move away from traditional diets.

But, he says, increasing the prices of unhealthy foods and beverages has been shown to help reverse those trends, especially when combined with subsidies of fruits and vegetables.

The WHO says policies that can lead to a 20 percent or greater increase in the retail price of sugary drinks will reduce consumption and result in decreases in obesity, diabetes, and tooth decay.

“We know it’s a cost-effective intervention,” Nederveen told Healthline.

He noted that countries ranging from Norway to Hungary to South Africa to Chile to Vanuatu already have, or are considering, taxes on sugar-sweetened beverages, and that number is rising.

Read more: Breaking up with sugar »

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