A committee of MPs has urged the government to impose a 20% levy on sugary drinks as a solution to obesity. Advocates point to the “success” of a sugar tax in Mexico, where sales have fallen after a 4p per litre levy was imposed in 2014, but that is from a starting position where sugary drink consumption is an astronomical 43 gallons per person per year, and babies are weaned on soft drinks because the tap water is often of questionable quality.
I don’t see how the Mexican experiment proves anything. For one thing, what would a sugar levy actually look like on shelf? If, say, the full-sugar variety costs 5p per can more for a retailer to purchase compared with a zero version, would that automatically be reflected in the on-shelf prices, or would they just align at a common rrp but with different margins? Looking at the countries where taxes already exist doesn’t give us much of a clue, as in Mexico there is virtually no diet soft drink market, whereas in France a tax applies to all soft drinks, sugary or not (as it does here, in the form of VAT).
We also have parallels from our own experience. In the two categories where there is a ‘levy’ or excise duty applied as well as VAT – tobacco and alcohol – campaigners have been telling us that taxation alone is ineffective, and that other restrictions are needed. So a sugar tax is surely the wrong place to start. Better surely to focus on education and a commitment to act responsibly throughout the supply chain, from manufacturers, retailers and parents. And that goes for politicians, too.