Taxes on fizzy drinks in NZ: preventing premature deaths and raising funds for health

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   Tony Blakely, Cliona Ni Mhurchu  and Nick Wilson

A task of public health research is to quantify the health impact of interventions that are upstream and are political.  In the food environment, we strongly suspect that regulation of the food industry, food reformulation, marketing and price (i.e. taxes and subsidies) will be some of the most effective interventions to address obesity and poor nutrition.  Indeed, much international research supports this (e.g. [1]).  Today some of us have published research in the NZ Medical Journal that finds that about 67 premature deaths a year might be prevented by a 20% tax on fizzy drinks. And that there might be up to $40 million of revenue raised by such a tax.  (Also see TVNZ interview of Ni Mhurchu and Radio NZ interview of Blakely on this research.) In this blog we overview the uncertainty about these findings, the role of researchers in generating such findings, and possible policy implications.fizzy drink tax

We have previously outlined how difficult it is to estimate precisely the health impact of food taxes and subsidies.  Change the price of one food, and not only does its consumption change, but also the consumption of foods that are complements or substitutes.[2 3] Thus there is some level of unavoidable uncertainty when modelling the health impact of food taxes and subsidies.  In our research just published, we had an uncertainty range of 60 to 73 deaths averted per year – in reality it is probably wider than this due to uncertainty in the price elasticities (which we were not yet able to model) and out-of-model uncertainties (e.g. how the industry and consumer preferences will respond and change in the future).  That all said, it seems very likely that a 20% tax on sugary fizzy drinks would benefit health.  A growing body of international research suggests this too (e.g. [4-6]).

Some might question whether academic researchers should be assessing the impact of inherently political decisions.  However, it is abundantly clear that the major drivers of increasing obesity rates are upstream, stemming from changes in our food environment.  Politicians and the general public should be concerned about this, and keen to act.  Globally governments and the public realised after the global financial crisis of 2008 that financial markets cannot be left (lightly) regulated; Governmscience advocacyents need to set the parameters that prevent gross injustices and attempt to create an environment that is maximally beneficial for society – all, or as many as possible, members of society.  Similar arguments apply in the food environment.  Increasingly, disease and health system costs will be driven by obesity and diet related diseases, and smart governments can act now to alter that future.  Community-based health promotion, such as the Healthy Victorian Communities programme that Minister Ryall is proposing we adopt as Healthier Families New Zealand, are welcomed.  But to optimise health gain and protect the long-term fiscal viability of the NZ health system, action on underlying drivers, such as price and marketing, are also necessary (just like they have been for progressing tobacco control).  Therefore, a role of research is to estimate the effect of these more upstream interventions – such as taxes.  It is then up to the public and politicians to debate the best policy package including the trade-offs (e.g., should the revenue from a new tax fund healthy school meals).  The researcher’s key job is to provide the best information possible (with the uncertainty well-articulated) to inform the evidence-based components of the issues. Then the public and political debate can focus more on societal values and trade-offs.

Should researchers also be advocates for evidence-based policies?  Yes – especially on no-brainers such as getting rid of tobacco, and where the evidence clearly points to a ‘best’ policy package.  But we as researchers also need to realise that the final decision rests with civil society and elected representatives. Researchers are but one input into the decision making process, albeit offering expert information that should be weighed alongside other issues such as societal values.

It also makes sense for researchers to outline plausible policy options that logically arise from their studies. That too can help the public and political debate become more informed and focused. So, following this line, what we would recommend to decision makers around improving NZ’s food environment:

  • Upstream determinants of the food environment undoubtedly got us to where we are today, and almost certainly will be one of the most effective places to prioritise for intervention as well.
  • Some upstream actions, such as subsidies on fruit and veges, are fairly uncertain in terms of their impact on health. Researchers should keep assessing these potential interventions, as we have and are continuing to do.
  • Some upstream interventions, such as taxes on sugary soft drinks, have quite a bit more certainty. And have a number of appealing features in that if applied to only sugary soft drinks, the industry has the ability to shift to focusing on providing  zero-calorie fizzy drinks (albeit still a problem for dental health). Also, depending on exactly what is taxed, the NZ Government gains revenue of up to $40 million per annum that can be used (say) to fund Healthier Families New Zealand or healthy school lunches in high need areas. Furthermore, sugary sweetened soft drinks are a major issue for children (and in fuelling child obesity), and area that should attract across-political support for action. When it comes to children it is unreasonable to say that they make fully informed decisions about the risks of obesity and chronic diseases such as diabetes.

 

1. Vos T, Carter R, Barendregt J, et al. Assessing Cost-Effectiveness in the Prevention (Ace-Prevention): Final Report. Brisbane and Melbourne: University of Queensland and Deakin University, 2010.

2. Eyles H, Ni Mhurchu C, Nghiem N, et al. Food pricing strategies, population diets, and non-communicable disease: a systematic review of simulation studies. PLoS Med 2012;9(12):e1001353 doi: 10.1371/journal.pmed.1001353[published Online First: Epub Date]|.

3. Nghiem N, Wilson N, Genc M, et al. Understanding Price Elasticities to Inform Public Health Research and Intervention Studies: Key Issues. Am J Public Health 2013;epub date: Sep 12 2013 doi: 10.2105/AJPH.2013.301337[published Online First: Epub Date]|.

4. Blakely T, Wilson N, Kaye-Blake B. Taxes on sugar-sweetened beverages to curb future obesity and diabetes epidemics. PLOS Medicine 2014;11(1) doi: e1001583. doi:10.1371/journal.pmed.1001583[published Online First: Epub Date]|.

5. Briggs AD, Mytton OT, Kehlbacher A, et al. Overall and income specific effect on prevalence of overweight and obesity of 20% sugar sweetened drink tax in UK: econometric and comparative risk assessment modelling study. BMJ 2013;347:f6189 doi: 10.1136/bmj.f6189[published Online First: Epub Date]|.

6. Basu S, Vellakkal S, Agrawal S, et al. Averting Obesity and Type 2 Diabetes in India through Sugar-Sweetened Beverage Taxation: An Economic-Epidemiologic Modeling Study. PLoS Medicine 2014;11(1):e1001582 doi: 10.1371/journal.pmed.1001582[published Online First: Epub Date]|.

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About TONY BLAKELY

I am an epidemiologist and public health researcher. My research activities span mortality studies, health inequalities, healthy eating, tobacco and cancer control. I teach advanced epidemiology methods. I currently direct the Burden of Disease Epidemiology, Equity and Cost effectiveness programme (BODE3) where we are modelling the health impact, cost and cost effectiveness of preventive and cancer control interventions.

4 thoughts on “Taxes on fizzy drinks in NZ: preventing premature deaths and raising funds for health

  1. Hi Tony

    Would you care to comment on artificially sweetened beverages (ASB’s) and whether you see any issues with these drinks being consumed in greater volumes should people move away from SSB’s but still want their sweet’n’fizzy fix?

    There is some early discussion at an academic level that ASB’s are not the get out of jail free card that producers of such beverages market them to be (the non-caloric choices that the likes of Coca-Cola like to go on about), and the general public hope they are.

    Whilst they are low energy density compared to their SSB counterparts, much of the issue with SSB’s (and ASB’s, it would seem) is the neuro- and endocrinological responses to over-consumption of these drinks. Producers might like to keep the focus on calories, how all calories count, and how calories can be “bought” and “sold” through exercise, transferred from one source to another, but the actual human biochemistry speaks to no such thing (I direct readers to an excellent resource on this matter – “The Poor Misunderstood Calorie by Dr William Lagakos http://www.amazon.com/The-poor-misunderstood-calorie-calories/dp/1453843612).

    Two papers I have which speak to issues with ASB’s are:

    “Artificial sweeteners and the neurobiology of sugar cravings” (https://www.dropbox.com/s/dhrdhwejdlvvbu2/Artificial%20sweeteners%20and%20the%20neurobiology%20of%20sugar%20cravings.pdf)

    “While people often choose “diet” or “light” products to lose weight, research studies
    suggest that artificial sweeteners may contribute to weight gain.”

    And;

    “Artificial sweeteners produce the counterintuitive effect of inducing metabolic derangements.”

    (https://www.dropbox.com/s/yyi4gfb2tx2ajfj/Artificial%20sweeteners%20counterintuitive.pdf)

    “However, accumulating evidence
    suggests that frequent consumers of these sugar substitutes may also be at increased risk of excessive weight gain, metabolic syndrome, type 2 diabetes, and cardiovascular disease.”

    In the real world, from a practitioner’s perspective (I am a private practice and corporate health nutritionist), it is common to see these ASB’s consumed in higher quantities than SSB’s, whether this is due to a perceived health halo of the ASB’s, leading consumers to consume more of the drink, or whether it is an inherent biological mechanism mediated by the likes of insulin acting as a satiety hormone, I couldn’t say (likely a mixture of both). You also see consumers make deals with themselves – “I can have a larger bucket of popcorn because my cola has zero calories.” In other words, you see a transference of the sugar load from one medium (the drink) to another (the popcorn) and typically the swap is for another for that is easily overconsumed (food with no brakes).

    The papers above discuss the potential for an individual to consume an ASB and, once their body has registered that there were no calories attached to the sweet taste, triggers a craving for (and, inevitably, the consumption of) another sugar-laden food or drink distally from the consumption of the ASB. As humans are generally poor at associated distal food and drink choices with their proximal choices, they might not see the link. But it is noticeable upon review of food diaries and subsequent questioning around these.

    I have also seen very poor outcomes with diabetics and prediabetics who simply shift from SSB’s to ASB’s.

    I would posit that a tax on ALL sweetened beverages would be a better way to go. As the same rules apply to ASB’s as SSB’s (they are non-essential and non-nutritive), there would seem little issue with taking this slightly broader approach (though the producers won’t see it this way as it leaves them nowhere to go beyond bottling water).

    Interested to hear your thoughts.

    • Hi Jamie,

      Thanks for your considered comment. You raise some interesting points and possible evidence that artificially sweetened beverages (ASB) may not be an optimal substitute for sugary sweetened beverages (SSB). (I think we would both agree that water would be better!) Regarding ASBs, though, and pulling in the sweeteners themselves (aspartame for now, although the future may be more about stevia), I note the following:
      • A randomised control trial of children ‘given’ either ASBs or SSBs clearly finds that weight gain was greater among those randomised to SSBs.[1]
      • A recent European Food Safety Authority review of aspartame found it to have no cancer risk and (generally) no toxicity risk. (http://www.efsa.europa.eu/en/press/news/131210.htm)

      All fizzy drinks are detrimental to oral health, although this is probably of much less significance to the weight and obesity impacts of SSBs.

      So I think for now that ASBs pose a minimal risk and certainly much less than SSBs. If other readers know of quality reviews of the possible risk of ASBs – especially for being as (or nearly as) bad as SSBs for weight gain, please comment.

      Tony

      1. de Ruyter JC, Olthof MR, Seidell JC, et al. A trial of sugar-free or sugar-sweetened beverages and body weight in children. The New England journal of medicine 2012;367(15):1397-406 doi: 10.1056/NEJMoa1203034[published Online First: Epub Date]|.

      • Thanks for the reply, Tony.

        I think we can leave aside any discussions around the likes of aspartame, et al. The issues raised with ASB’s are not presently related to any particular issue with the sweetener itself, but more the endocrine and neural response to ingesting a hyper-palatable sweetener, irrespective of the actual sweetener used.

        I note a few points in the RCT you have quoted above;

        – This is a study conducted on young normal weight children, and as such, may not extrapolate well to the likes of overweight/metabolically deranged adults shifting from SSB consumption to ASB consumption with the expectation this transfer will lead to an improvement in their health whilst still allowing for the consumption of beverages sweetened beyond our evolutionary precedents.
        – I note that the ASB group in this study increased in body weight, increased in skinfold thickness, and increased on BEI fat mass scores, all indicating that adiposity still increased in the ASB group (this study really needed a non-SSB/ASB control). Whilst the increases weren’t as large as the SSB group, they were also not zero. That ASB’s might not increase adiposity as much as SSB’s is not the same as saying they do not do this at all, which is what I think the public perception (likely due to the marketing) of these products is.
        – The dose was equivalent between the groups – 250mL per day in each group. In a group of normal weight children, in a controlled dose setting, it might be that ASB’s are the ‘lesser evil’ compared to SSB’s, but in the real world, we see adults consume more ASB’s due to the perceived health halos of zero sugar/less calories… “I can drink more of this because…”. What might we see in a study if the dosing was changed? For example, 250mL SSB vs. 500 or 750mL ASB?
        – I would imagine that in children, because they do not have the free access to food that adults do, it is more difficult to measure any compensatory eating behaviours, mediated by the endocrine/neural effects of ASB’s (particularly in those already with a degree of metabolic derangement). This RCT cannot answer the proposed question of whether ASB’s will just shift the sugar/calorie load to something else distally to the consumption of an ASB.

        So whilst we are still sorely lacking in data, based on the smoking guns proposed in the research, and the clinical experience of myself and my peers, I don’t think ASB’s should be treated separately to SSB’s in any proposed taxes. The underlying issue, at a physiological level, seems to be the consumption of beverages that are disproportionately sweet. They all fall on a similar continuum as say filtered vs. unfiltered cigarettes.

        Jamie

  2. Pingback: Polity: Fizzy drinks: Tax or no tax? - The Standard

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