Tax fatty foods to aid the obesity challenge

Published on Wednesday, 14 November 2012 10:52
Posted by Scott Buckler

New duties on foods known to be unhealthy should be part of a package of public health policies to tackle overweight and obesity and other diet-related diseases, according to the National Heart Forum (NHF)

In a report released today (Wednesday 14 November), the NHF recommends the introduction of duties on sugary soft drinks to curb consumption and raise revenues to support public health programmes or subsidise the cost of healthy foods such as fruits and vegetables.

The NHF publication 'What is the role of health-related food duties?' reports evidence from around the world presented at a meeting of the NHF membership in June, and makes recommendations for Government action.

"The current debate about food taxes is not about whether to use them, but about how they should be applied, on what foods and how the tax revenues should be used," said Jane Landon, deputy chief executive of the NHF.
"There is a growing consensus among policy makers across many countries that carefully applied food taxes are both cost-effective and justified to help tackle the spiralling costs and huge social burdens of non-communicable diseases such as coronary heart disease, stroke, cancer and diabetes caused by over-consumption of unhealthy foods high in fat, sugar and salt. Added to this, there is an accumulating body of evidence from natural experiments in countries such as France, Denmark and Hungary as well as modelling studies and studies on alcohol and tobacco which provide a better understanding of the likely impacts of food taxes on prices, on consumers and on food producers and retailers."

"Our recommendation is that a duty on sugar-sweetened soft drinks would be a good place to start. Excise duties applied with care to specific food categories such as sugary soft drinks which are 'unhealthy', non-essential, and which can be easily substituted for a healthier alternative are likely to be straightforward to implement and unlikely to have unintended effects. Taxes are never popular but public support could be strengthened if the revenues generated are used for health-related purposes, such as public health programmes or subsidising the cost of healthy foods such as fruits and vegetables to achieve a fiscally neutral policy."

The NHF makes 10 recommendations for policymakers:

1. As a proportionate response to the current crisis in diet-related ill health, the application of additional taxes on foods known to be 'unhealthy' should be part of a package of public health policies.

2. Excise duties are the most promising option because they offer the maximum facility for
flexibility, control and focus of the tax instrument.

3. Taxes applied to specific product categories, such as sugar-sweetened soft drinks (SSSDs), are
straightforward to apply and are unlikely to have significant unintended effects.

4. Price elasticity and cross-price elasticity effects must be carefully analysed to identify potential
unintended effects.

5. Duties on unhealthy foods are not likely to have substantial effects on changing consumption
and supply patterns in isolation, but should be part of a comprehensive package of policy measures to shape food consumption and supply.

6. Careful modelling of any new tax instruments is essential to understand how different types of consumers and businesses are likely to respond, and how combinations of taxes on unhealthy foods with subsidies on healthy foods could potentially achieve fiscally neutral policies.

7. Concerns about regressivity must be taken into account, but should not, by themselves, be seen as barriers to implementing taxes on foods.

8. Clear communication of the purpose of a tax and its potential benefits – including how revenues may be used to support health services or health programmes or to subsidise healthy foods – is crucially important, as it will determine public acceptance of the tax.

9. The term 'health-related food duty' is recommended as it conveys the health purpose of the policy and the notion of responsibility underpinning the payment of duties on goods that contribute to social harms.

10. Any proposed statutory instrument should be introduced with a 'sunset clause' so that it is subject to regulatory review after a specified period of time.

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