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Oxford experts call for a sugary drinks tax in the UK

16 May 2012

Experts at Oxford University are calling for the introduction of taxes on sugary drinks as one measure that would encourage healthier diets and help tackle the obesity crisis in the UK.

Dr Oliver Mytton and Dr Mike Rayner of the Department of Public Health at Oxford are the lead authors of a summary of evidence on health-related food taxes in the BMJ today.

The Oxford University researchers conclude that taxes on unhealthy foods do have the potential to improve health. They suggest that a taxation level of around 20% (equivalent to VAT) could have a meaningful reduction in disease within populations.

However, the evidence base needs strengthening to better predict the wider effects of introducing some of these taxes – such as ‘fat taxes’ or ‘junk food taxes’ – and understand what foods consumers might switch to, they say.

Beyond their analysis in the BMJ of the existing evidence, Dr Mytton and Dr Rayner believe that the urgency of the health problems related to poor diets in the UK demands action now. They believe a tax on sugary drinks would be a safe and reliable option to improve health.

Dr Rayner says: ‘Obesity has rocketed recently and if anything our diet is getting worse. We need to take steps to tackle this problem as a nation. It’s affecting our health and it’s affecting our wallets through the increased burden on the NHS and the taxpayer.

‘David Cameron said that he wanted to look at fat taxes last October. He should now commission an independent review of the existing evidence that looks at the options for taxing unhealthy foods.’

The Oxford team argue that government intervention such as taxation can be justified when the market fails to provide the ‘optimum’ good for society’s well-being, as with the duties on alcohol and tobacco, for example.

‘It is basic economic theory that raising the price will change consumption, and we already use the taxation system in this way to influence behaviour,’ explains Dr Rayner. ‘We have taxes on unhealthy goods such as tobacco and alcohol. And we don’t have taxes on books as they can be seen as a public good to be encouraged.’

Dr Rayner says: ‘There would be benefits for the healthcare system too. It would save taxpayers’ money through reduced NHS costs as well as combat diet-related disease such as obesity and heart disease.

‘It is also likely that a tax on unhealthy foods would act as an incentive to encourage manufacturers to change what goes into their products and make them healthier over time.’

A tax on sugary drinks is not going to cure obesity by itself, Dr Rayner is careful to state. ‘There is no single solution: we need an environment conducive for good health. We need a comprehensive strategy to deal with the affordability, the availability and the promotion of unhealthy foods.

’VAT is already applied to some foods and drinks in this country, but it is done inconsistently – as the recent pasty tax debate revealed. ‘VAT should be totally reformed in line with health goals,’ says Dr Rayner.

New taxes introduced in Denmark (on saturated fats) and France (on sweetened drinks) will provide the opportunity to evaluate the effectiveness of such measures in the coming years.

Taxes can have untoward or unexpected effects, and it is possible that a tax on saturated fats, like that introduced in Denmark, could be counter-productive, suggests Dr Rayner.

In avoiding some foods high in saturated fat, people could replace them with foods high in carbohydrates – food that also tends to be high in salt. The overall effect on health might be negative.

That is why Dr Rayner believes a tax on sugary soft drinks is the best option. Even if people moved to diet drinks instead, it would still be beneficial for health.

‘A tax on sugary drinks is one measure that is a sure, safe bet that would change how many calories people consume across the nation and have a significant effect on obesity levels,’ says Dr Rayner.

For more information please contact:
Dr Mike Rayner on +44 (0)1865 289244 or mike.rayner@dph.ox.ac.uk
Dr Oliver Mytton on +44 (0)1865 617783 or oliver.mytton@dph.ox.ac.uk
Or the University of Oxford press office on +44 (0)1865 280530 or press.office@admin.ox.ac.uk

Notes for Editors:

  • The BMJ Analysis paper ‘Health-related food and soft drink taxes – are they a good idea?’ by Oliver Mytton and colleagues is to be published on Tuesday 15 May 2012.
  • The BMJ are also issuing a press release on the report.
  • Some foods in the UK do presently attract VAT, for example chocolate covered biscuits, confectionary and soft drinks. However, which foods have VAT levied on them is not down to their health value: all cakes, custard creams and similar biscuits, pork pies and (cold) pasties are exempt while low-calorie soft drinks are subject to VAT.
  • The BMJ paper summarises the existing evidence for the effects of taxes on unhealthy foods. These findings have come from three different types of study:

    ‘Natural’ experiments look at how changes in food prices (through changes in VAT, other taxes and duties, or subsidies) have affected consumption and/or obesity prevalence in different countries. Although this is real data from real changes in price, it is hard to tease out all the factors involved in any changes that are observed.

    Some trials have looked at the effects of price changes in certain, controlled environments like a staff canteen. But it is hard to be sure what people do away from the canteen where they could add in other foods to their diet to compensate for any changes.

    And modelling studies have used economic data to estimate the impact of price changes on health. For example, a reasonably large 20% tax on soft drinks in the USA is predicted to reduce obesity prevalence by 3.5 percentage points.

    While all these study designs have strengths and limitations, the researchers conclude that even small health-related food taxes would result in changes in consumption of unhealthy foods across populations.
  • The authors in their BMJ Analysis paper do note that health-related food taxes are regressive, as with duties on cigarettes and alcohol. Poorer people spend a greater proportion of their income on food.

    But the researchers also point out that the health gains are likely to be progressive – people with lower incomes tend to have worse diets and a higher incidence of diet-related diseases like diabetes, heart disease and some cancers.

    The authors believe there would be a need to balance any introduction of taxes on unhealthy foods with changes in direct taxation at the same time, or alternatively offer subsidies towards healthier foods.
  • Oxford University’s Medical Sciences Division is one of the largest biomedical research centres in Europe, with over 2,500 people involved in research and more than 2,800 students. The University is rated the best in the world for medicine, and it is home to the UK’s top-ranked medical school.

    From the genetic and molecular basis of disease to the latest advances in neuroscience, Oxford is at the forefront of medical research. It has one of the largest clinical trial portfolios in the UK and great expertise in taking discoveries from the lab into the clinic. Partnerships with the local NHS Trusts enable patients to benefit from close links between medical research and healthcare delivery.

    A great strength of Oxford medicine is its long-standing network of clinical research units in Asia and Africa, enabling world-leading research on the most pressing global health challenges such as malaria, TB, HIV/AIDS and flu. Oxford is also renowned for its large-scale studies which examine the role of factors such as smoking, alcohol and diet on cancer, heart disease and other conditions.