SOPH-UWC’s Comments to the South African National Treasury on the Proposed Sugary Drinks Tax

As pointed out in the policy paper, Non-communicable Diseases (NCDs) are a global concern, as is the obesity epidemic.

COMMENTS TO THE SOUTH AFRICAN NATIONAL TREASURY ON THE PROPOSED SUGARY DRINK TAX

SUBMISSION MADE BY: THE SCHOOL OF PUBLIC HEALTH (SOPH), UNIVERSITY OF THE WESTERN CAPE

29 August 2016

As pointed out in the policy paper, Non-communicable Diseases (NCDs) are a global concern, as is the obesity epidemic. This is also the case in South Africa, for which NCDs impose a large and continuously growing burden on the health, economy, and development of the country, currently contributing to a staggering 43% of recorded deaths. Rates of overweight and obesity in the country have been experiencing a sharp rise over recent years1,2,3,4. Currently, more than 45% of men and women above the age of 35 are either overweight or obese5.

While NCDs have historically affected the more affluent population, these conditions are now affecting other population groups as well. It is believed that in the coming decades, NCDs will further exacerbate wide inequalities in longevity and quality of life among all in South Africa6. Additionally, the chronic nature of NCDs demands long-term care and imposes a significant burden on an overstretched health system already having to cope with the HIV/AIDS epidemic, a high burden of TB, maternal and child mortality, and high levels of violence and injuries.

One of the leading behavioural risk factors for NCDs is an unhealthy diet that includes high levels of sugar consumption, among other things7. In fact, the continuing rise in prevalence of overweight and obesity in an increasing number of low- and middle-income countries has been associated with a dramatic change in diet. Poor diet now generates more disease than physical inactivity, alcohol and smoking combined8. This change, dubbed the ‘nutrition transition’, is characterised by a shift from traditional diets towards more energy-dense, processed foods, and more foods of animal origin and more added sugar, salt and fat91011. This new diet, commonly known as the ‘western’ diet is primarily made up of cheap, highly palatable, heavily promoted, energy-dense and nutrient-poor foods12. The transition is evident in South Africa, where a steady increase in the per capita food supply of sugar, fat, protein, salt, and total calories has been observed13,14,15.

The changes in nutrient intake among South Africans have been associated with changes in population level dietary patterns16. Research increasingly implicates a rapidly changing food environment dominated by processed products (including those high in sugar), and demonstrates that these environments contribute to increasing levels of chronic diseases, over and above individual factors such as knowledge, attitudes, and behaviours17,18,19. Simply put: Unhealthy food environments foster unhealthy diets. This has especially been found to be true for communities predominantly made up of low-income, low socio-economic status residents20,21,22,23, such as many found in South Africa.

International research has shown that environmental and policy interventions may be among the most effective strategies for creating population-wide improvements in consumption habits24. Consensus now exists based on research and practice on core policy actions that can be taken to promote healthy diets25,26. These policy actions include the taxation of unhealthy ‘food’ items, such as sugar-sweetened beverages – for example, Mexico implemented taxation of sugar-sweetened beverages and other so-called junk foods, and many other countries have or are actively pursuing taxes on sugar-sweetened beverages to combat both obesity and dental disease25. Early results from the sugar taxation in Mexico indicate that in 2014 the purchase of soda and other taxed drinks had dropped by 10% compared with the previous year, whereas the purchase of bottled water rose by 13%, showing that people were indeed substituting the unhealthy for the healthy27. Sugar taxes have also successfully been implemented in Denmark, Finland, France, Hungary, Ireland and Norway, and resulted in substantial scientific evidence showing that decreasing sugar-sweetened beverage consumption reduces the prevalence of obesity and obesity-related diseases and that a tax on sugar sweetened beverages reduces the obesity rate28,29.

To this end, we commend the Treasury for its proposed sugar-sweetened beverage tax policy. We believe that it is strong and will improve health in South Africa by reducing sugary drink consumption. We also agree that it is, indeed in line with recommendations and targets made by The Department of Health’s Strategic Plan for the Prevention and Control of NCDs 2013 – 2017, and National Strategy for the Prevention and Control of Obesity 2015 – 2020.

However, we would add to the above by recommending the following be considered/incorporated when the final policy is written up and implemented:

1) Existing national efforts addressing diet-related NCDs have to be strengthened, coordinated and sustained in order to combat the current trend and achieve a real reduction in the current NCD-related burden. In order for full health benefits to be achieved, a tax on sugar-sweetened beverages would need to be part of a wider approach to address obesity that includes for example food labelling, advertising regulations, reformulation of foods and drinks by industry and consumer awareness programs as well as possible subsidies on healthy foods. Also, in addition to a sugar tax, it is recommended that the sugar (and corn syrup) content of other consumer items such as processed and packaged food, should be regulated.

2) The revenue from the sugary drink tax should be used to promote health. Part of the tax revenue should be used towards improving the wellbeing and health of all. Currently, the policy document does not describe how the revenue from the sugary drink tax will be used. South Africans need to know how this money will be used to benefit them and their country.

3) A higher sugary drink tax will have an even greater impact on health. The proposed tax level of 0.0229 Rand per gram of sugar is commendable, but a higher level will better enhance the chances of reaching the goals put forth in the DOH’s Strategic Plan for the Prevention and Control of NCDs 2013 – 2017, and National Strategy for the Prevention and Control of Obesity 2015 – 2020.

Finally, we would also like to point out, and add our voices to those who refute industry claims that a sugar-sweetened tax would result in job losses. It has been pointed out that these claims rely on a “misunderstanding of economic realities combined with repeated misrepresentations of the available data. In particular, because of the host of substitutes available for sugary drinks, both consumers and producers can adapt to the tax in ways that avoid economic costs while achieving significant health benefits, and would reiterate here findings that refute this claim. In any case, as noted, as sales of sugary drinks decline, retailers should see higher sales of other untaxed drinks. By extension, they should not see any decline in turnover as long as they can stock appropriate substitutes”30.

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