A smashing tax
Credit: Pixabay / utroja0
There is a saying, “using a sledgehammer to crack a nut.” The point being that using a sledgehammer is a somewhat over-engineered approach, and a very costly way, to crack a nut. It works but not necessarily in the way intended. You will likely smash the nut entirely.
What has this got to do with salt and sugar reduction and regulation? Well, it is being argued that a polluter pays type industry levy could help food become healthier in the UK.
There is an urgent need to tackle growing rates of diet-related disease. Obesity and its related diseases are costing the NHS £6.5 billion a year. Moreover, a growing body of research links obesity to worklessness.
Government wants fixes to stem the tide of obesity and the food and drink industry is at a point where it has to take heed of what’s proposed as obesity, and UPFs, continue to make headlines.
Should the latest report’s findings be taken on – expanding the scope of the sugar tax beyond soft drinks to include all foods – there are plenty of considerations to take on board. Three spring to mind.
First, there is a risk that such a move would raise food prices for consumers. To address this concern, government will have to consider how revenues raised will be allocated and benefit its ultimate audience. Price increases will have to be combined with messages explaining any action, so that the effects could be strong.
Second, an appropriate lead-in time to ensure that businesses have the time and resource to reformulate products.
Third is the impact of a tax and who will receive reward. As a tax is levied at the same rate regardless of income, a tax on food or drink may have a disproportionate impact on those in lower-income groups. If salt and sugar costs rise due to the levy, these products may become less affordable for those with limited finances.
The overall benefit of seeing reduced consumption, and health inequalities falling are welcome. But the positive outcomes associated with HFSS food taxes came with subsidies for healthier options.
To be most effective and avoid consumers simply substituting other unhealthy options, it is important that government work with industry on the tax + health equation so that taxes are paired with increased availability of healthy, affordably, and sustainably, produced alternatives.
If taxation does work, the benefit could be immense. But it’s a complex picture. Taxation requires proportionality, which in turn requires the rules being appropriate to the firms to which they are applied.
There’s no avoiding this sledge hammer to crack a nut.
Rodney Jack, editor, Food & Drink Technology.
Keep in touch via email: [email protected] Twitter: @foodanddrinktec or LinkedIn: Food & Drink Technology magazine.
