A World Tour of Sugary Taxes - Pacific Standard

A World Tour of Sugary Taxes

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Beyond soda, some countries have taxed foods including pudding and ice cream. The results are promising.

By Francie Diep

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(Photo: Peter Macdiarmid/Getty Images)

Over the past few years, proposed soda taxes in cities like Philadelphia, New York, and Berkeley have grabbed headlines and sparked passionate debate. But American cities aren’t the only ones to try improving their residents’ metabolic health via their wallets. Nor is soda the only unhealthful treat that governments have tried to tax. In an effort to stem the rise of diabetes and heart disease — which are now hitting middle-income countries, where they once mostly affected only high-income ones — politicians around the world have introduced various taxes aimed at making junk food a little more unpalatable.

Below, Pacific Standard takes a brief tour of the world’s most interesting food and drink duties, and, where the evidence exists, whether they’ve worked to improve people’s health.

The Danish “Fat Tax”

For a little more than a year between 2011 and 2013, Denmark taxed saturated fat in foods. The more saturated fat a food contained, beyond a certain threshold, the more it was taxed. The measure “proved to be efficient in reducing the intake of saturated fat as well as in improving other dietary measures,” according to the World Health Organization. Danish officials ultimately withdrew the fat tax because it proved burdensome to small businesses and the economy, the Wall Street Journal reports.

A Tax on Chocolates and Lemonade

Leaders in Finland use a number of financial sticks and carrots to entice their citizens to eat better:

  • In an effort to get kids to consume more milk, Finland subsidizes dairy products sold in schools — but not if they’re too high in fat or salt.
  • Since 1940, Finland has taxed “soft drinks” including lemonades, fruity beverages, energy drinks, and, of course, soda. By 2011, Finland was also taxing sweets, chocolate, and ice cream. But after the European Commission decided the sweets tax unfairly favored domestic companies, the Finnish government announced it would lift the sweets and ice cream tax in 2017.
  • The Finnish Ministry of Finance has commissioned a working group to study whether the country should impose a sugar tax (and how to go about doing so).

A Public Health Tax That Includes Caffeine

In 2011, Hungary introduced a “public health product tax” that taxes packaged foods based on how much sugar, salt, and stimulant chemicals — such as caffeine — they contain. One year later, a study found that between one in four and one in three Hungarians ate fewer “public health products” than they used to. Folks changed their habits not only because of higher prices, but also because they were more aware of unhealthy foods. In addition, 70 percent of responding food companies said they decreased the sugar, salt, and stimulants in their recipes. “In conclusion, PHPT has achieved its public health aims,” WHO researchers write.

A Sugar-Producing Country With a “Soda Tax”

In 2009, 4 percent of Mauritius’ entire gross domestic product came from producing sugar. Nevertheless, the nation passed a “soft drink” tax in 2013. The tax is three Mauritian cents per gram of sugar and applies to sodas, syrupy mixers, and fruity drinks with added sugar. It has padded the government coffers by $9.2 million, but its health effects haven’t yet been studied.

The Classic Example

Mexico is one of the most-cited examples of the effect soda taxes can have on citizens’ habits. In 2012, Mexicans drank more sugary drinks per capita than people anywhere else in the world. A 2006 study estimated one in seven Mexican adults had diabetes. Concerned about these trends, in 2014, the Mexican government passed taxes on any non-alcoholic drink with added sugar and on calorie-dense snacks, such as chocolate, pudding, ice cream, and candy. By the end of the year, Mexicans were buying 17 percent fewer of the taxed drinks than they did before the tax passed, one study found.

Based on these countries’ experiences, WHO researchers concluded in a recent report that junk food taxes, alongside subsidies for healthier foods, should be “a key component of a comprehensive strategy for prevention and control” of non-communicable diseases such as diabetes, heart disease, and cancer. There’s strong evidence taxes and subsidies that are large enough can significantly change people’s consumption of foods and drinks. The health effects of these changes remain to be seen, but the WHO sounds confident they’ll show up soon.

“Evidence will emerge from countries that have recently implemented such taxes showing the impact on health and other outcomes — for example NCD [non-communicable disease] mortality,” the researchers write.

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