Sugar tax to curb SA’s obesity epidemic coming in 2017

A tax on sugary drinks will be implemented, confirms Finance Minister Pravin Gordhan.

28 September 2016
by Glynis Horning

On World Obesity Day on the 11th of October last year, the World Health Organization (WHO) released an urgent statement, recommending that countries use tax policy to increase the price of sugary drinks like sodas, sport drinks and even 100-percent fruit juices as a way to fight obesity, diabetes and tooth decay.

Their recommendation is based on the fact that the prevalence of obesity worldwide more than doubled between 1980 and 2014, when nearly 40 percent of people globally were overweight. In a 36-page report on fiscal policy and diet, the WHO said that tax policies that lead to a 20-percent increase in the retail prices of sugary drinks would result in a proportional reduction in consumption.

“Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes,” reported Dr. Douglas Bettcher, who heads up the WHO’s department for preventing non-communicable diseases. “If governments tax products like sugary drinks, they can reduce suffering and save lives.”

South Africa's Finance Minister Pravin Gordhan confirmed on 22 February this year that a proposed 'sugar tax' will be implemented nationwide later this year. This will include both "intrinsic and added sugars" to sugary beverages, he announced in his budget speech.

The burgeoning obesity epidemic in South Africa

Obesity is a ballooning problem in South Africa too, affecting about 40% of women, 11% of men and 25% of teenage girls in rural areas, says Aviva Tugendhaft, deputy director of the PRICELESS SA Priority Setting for Health programme at the University of the Witwatersrand.

“Obesity feeds chronic diseases from diabetes to cardiovascular disease, causing a death every hour, and lowering your quality of life through strokes, kidney failure, blindness and amputations. It’s also been linked to a 23% increase in the costs of health care, and to loss of productivity and absenteeism, cutting into the country’s gross domestic product (GDP),” says Tugendhaft.

All this, say Tugendhaft and other health experts, is linked largely to sugar consumption. The World Health Organisation (WHO) advises limiting your sugar consumption to six to 12 teaspoons a day – this is half the current South African average. “Most fizzy drinks have nine teaspoons of sugar, and fruit juices 10, with no nutritional benefits, and sugar is particularly harmful to health in liquid form,” Tugendhaft says.

The proposed sugar tax in South Africa

Finance Minister Gordhan announced a proposed tax on sugar-sweetened drinks in his budget speech in February last year. The suggestion from government was that it should be at a rate of 2.29 cents per gram of sugar. In his budget speech this year, Gordhan fixed the rate at 2.1c per gram for sugar content above 4g per 100 ml.

Drinks affected would include still and carbonated soft drinks, sweetened fruit juices and iced teas, sports drinks, energy drinks, vitamin waters, lemonade, squashes and cordials. Drinks with natural sugars, like plain milk and 100% pure fruit juice, won't be taxed.

Advocates of the tax include leaders in the health profession and institutions from the Public Health Association to the SA Paediatric Association and Rural Health Advocacy Project

Where else in the world are sugar taxes imposed?

Local health experts point to the implementation of sugar taxes in other countries, including Hungary, Chile, Columbia, Brazil, 23 states in the US, and especially Mexico. “Mexico’s sugar-sweetened beverage consumption had reached the highest in the world, with one in three adults classified as obese (against one in four in South Africa). A 10% tax on sugary drinks cut sales by 12% in the first year, and a 13% increase in sales of plain water was reported,” says Turgendhaft.

The arguments against imposing a sugar tax

Members of the Beverages Association of SA are vigorously opposed to the proposed tax with the chairman of Coca-Cola Beverages Africa describing it as “murderous”. The Association claims the decline in sales could lead to 72 000 job losses, including small businesses and spazas. 

They argue that it’s not just sugary drinks that cause obesity, and that these account for only 3% of daily calories in SA, the biggest culprits being vegetable oils. They say a tax would be discriminatory, penalising poor consumers, and that there are alternatives to a tax, including food advertising regulations, better labeling and education.

The counter-arguments

The tax advocates responded to the above arguments by stating that the money not spent on sugary drinks could be spent on other drinks, and the tax could be used to support medical projects, develop parks for physical activity, and educate the public.

“In addition, the 3% of daily calories that industry highlights is based on a very conservative per capita average,” says Tugenhaft. “There’s different consumption across groups – the elderly tend not to consume, and 15 to 24-year-olds are high consumers. The job loss figures are also based on questionable evidence. Evidence used to inform policy must be subject to peer review and of the highest standard. Any research commissioned by those with vested interests should be treated with caution.”

There’s no magic bullet to obesity, Tugendhaft says. “But a tax on sugary drinks is an important first step to limiting the harms from our growing obesity epidemic, and should be implemented for a positive outcome on the overall well-being of South Africa.”

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