Sugaronline Editorial - Race to tax sugar ramps up again By Meghan Sapp
Published: 09/01/2017, 1:25:00 PM
Time is running out but maybe it's not too late.
As bikini season winds down in the northern hemisphere and ramps up south of the equator, sugar taxes are once again on the lips of policymakers and the minds of beverage companies the world over—putting into question future sugar demand for a global market swinging its way towards surplus yet again.
Early last month, Rabobank outlined in a report how the trend to reduce sugar consumption through an ever-growing array of alternative sweeteners, changing diets away from sweeteners all together and sugar taxes sprouting up around the world will have a permanent impact on future sugar demand. And it’s only just the beginning.
The Philippines is neck-deep in that debate right now, with the Senate bouncing around US$0.10 to US$0.20 per litre taxes on “sugar-sweetened beverages” (SSB), the term used around the world for soft drinks that have become the targets of sugar taxes. The beverage industry is calling for the lower end of the tax proposals, saying the tax will have a significant negative effect on their industry but a Senator says saving a tiered tax regime won’t hurt the industry or the poor. Mondelez has proposed a taxation model that would tax sugar content rather than volume as the current plan stands but Coca Cola Femsa is going straight for the jugular, saying that taxes will restrict future planned investments in the country.
Why not just tax sugar higher and use the funds to subsidise the cost of bottled water? That’s what the infamous anti-sugar Dr. Robert Lustig wants the Philippines to do.
Over in Singapore, the subject is swiftly turning into a race to the bottom that started with the government asking manufacturers to reduce sugar content in SSBs shortly afterwards followed by a commitment from seven major brands to do just that, but now one of the leading manufacturers in the country wants to go even further and cut sugar content even more.
Taxes are starting to do their work, even before implementation, like in the UK. Manufacturers are responding to policymaker demands by reducing their sugar content, with Coca Cola European Partners saying that by the time the UK tax comes into place only two of its drinks products will be above the taxation line.
Even in regions like the Gulf where SSBs are seeing growth rather than the anti-sugar movement seen elsewhere, concerns about obesity are starting to bubble up enough to inspire VAT and sugar taxes just like what’s being seen around the world. And that’s got bottlers concerned as their numbers begin to reflect that shift.
In South Africa, where the beverage industry has been fighting tooth and nail against a 20% sugar tax on SSBs, arguing the negative impact on the sugar industry as well as unfairly targeting the poor will be devastating, BevSA suffered a bit of a setback this week when a survey showed that as many as 70% of South Africans could be in favour of such a tax.
The writing on the wall is clear for the sugar industry. A lack of concerted action against the anti-sugar movement has left the world wide open to tax sugar and it’s only going to get worse. Is there still time to make a difference and slow down the demand shift? You’ll never know unless you try.