U.K. to implement tax on sugary beverages

by Keith Nunes
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Both the United Kingdom and Canada have introduced a tax on sugary beverages.

LONDON – In the future, March 2016 may be viewed as a turning point in how the federal governments of some developed nations address sugar’s contribution to obesity and its negative public health consequences. Within a matter of weeks, both the United Kingdom and Canada announced plans to improve public health by attempting to alter consumer food and beverage consumption habits.

On March 16, George Osborne, the U.K.’s Chancellor of the Exchequer, introduced a tax on sugary beverages that will take effect in April 2018. Under the plan, beverage companies will pay a tax on drinks with added sugar. It will apply to beverages with total sugar content above 5 grams per 100 milliliters, with a higher rate for more than 8 grams per 100 milliliters. The tax will not be levied against milk-based drinks or fruit juices.

The money raised will be used to enhance physical education programs in schools. Mr. Osborne’s department estimated the amount raised per year will be approximately £320 million ($464 million).

George Osborne, the U.K.’s Chancellor of the Exchequer

“You cannot have a long term plan for the country unless you have a long term plan for our children’s healthcare,” Mr. Osborne said in a speech before the British Parliament on March 16. “Here are the facts we know: 5-year-old children are consuming their body weight in sugar every year; experts predict that within a generation over half of all boys, and 70% of girls, could be overweight or obese.

“Here’s another fact that we all know: obesity drives disease. It increases the risk of cancer, diabetes and heart disease – and it costs our economy £27 billion a year. That’s more than half the entire NHS pay bill.

"And here’s another truth we all know: one of the biggest contributors to childhood obesity is sugary drinks. A can of cola typically has nine teaspoons of sugar in it. Some popular drinks have as many as 13. That can be more than double a child’s recommended added sugar intake.”

Noting that many beverage companies are already reformulating products to reduce their sugar content, Mr. Osborne said beverage makers can act with the right incentives.

“I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: ‘I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing,’” he said.

Duncan Selbie, chief executive of Public Health England

Duncan Selbie, chief executive of Public Health England, called the announcement “fabulous news” and added, “This will reduce the risks of obesity, tooth decay and other life threatening diseases. This is public health in action and a great foundation ahead of the child obesity strategy later this summer.”

The British Soft Drinks Association responded swiftly, calling the plan “absurd."

Gavin Partington, director general of the British Soft Drinks Association

“We are extremely disappointed by the government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years -- down 13.6% since 2012,” said Gavin Partington, director general of the association. “We are the only category with an ambitious plan for the years ahead. In 2015 we agreed a calorie reduction goal of 20% by 2020.

“By contrast sugar and calorie intake from all other major take home food categories is increasing, which makes the targeting of soft drinks simply absurd.”

On March 1, the Canadian Senate published a report titled “Obesity in Canada,” that, among other recommendations, called for the consideration of a tax on sugary drinks and the implementation of subsidies to encourage the consumption of healthier foods and beverages.

“The committee recommends that the federal government assess the options for taxation levers with a view to implementing a new tax on sugar-sweetened as well as artificially sweetened beverages,” the report said. “And conduct a study, and report back to this committee by Dec. 2016, on potential means of increasing the affordability of health foods …”

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