Month: February 2016

South Africa introduces a 20% sugar tax on cooldrinks / soda.

The article below, written and published in early 2014, put forth the case for a sugar tax in South Africa. The good news is that the South African Finance minister announced that a 20% tax would be implemented on cooldrinks / sodas as from April 2016, more than a year from now.

While it is partially understandable that there is a delay in implementing this tax in order to put the correct structures in place, I raise the concern that the soft drink industry will use this interim time period to lobby strongly against this tax and to use and abuse the “science” to suit their case.

The fact of the matter is that this tax will raise an amount estimated at between R10 and R15 billion. This is less than the estimated cost of diabetes treatment alone for South Africans. The costs of obesity, cancer,  cardiovascular diseases and other diseases linked to high sugar intakes are also unacceptably high and add to the health burden, over and above those of diabetes.

The fact is that the industry has already begun to raise its voice against this tax. In light of this it is critical that the government and the Minstries of Finance and Health in particular stick to their guns in ensuring that this tax is implemented on the proposed date and that the sugar and soft drink industries do not succeed in watering down this tax.

It must be additionally noted that the sugar industry is the only remaining sector of the South African agricultural industry that still receives subsidisation from the government. It is ironic that a product with such high health costs is not only encouraged but supported by government on the one hand and is now to be indirectly taxed on the other. Perhaps the Minister of Finance should examine this rather strange fiscal contradiction?


Not so cool drinks: Is it time for a sin tax?

Glenn Ashton.

Originally published on 21 January 2014.

A few decades ago city workers anticipated a cheap, relatively healthy lunch of a bunny chow – a dollop of stew or curry in a half loaf, along with a pint of milk. Today inflation and industrial food have shifted us to where a lunchtime visit to the corner shop or local supermarket reveals the extent of our dietary rot. For too many lunch often means a half a loaf of bread and a bottle of cool drink.

In our cities cool drinks have almost become ubiquitous, the daytime drink of choice. Sales are relentlessly driven by inescapable, hard-edged advertising, reinforced by aspiration, sugar rush and high doses of caffeine as worker fuel. Yet the reality is these are drinks from hell with no upside, either for productivity or health.

Despite pervasive industry spin, sugar, especially at such excessive levels, can never form part of a healthy diet. Sugar is basically empty calories, providing energy with no other nutritional benefit, all at considerable metabolic cost. Extensive research has shown how sugar is linked, through its close relationship to obesity and metabolic disruption, to increasingly common diseases such as diabetes, cardiac and circulatory problems, along with numerous other so-called dietary linked lifestyle diseases.

The United Nations World Health Organisation (WHO), informed by numerous medical and scientific experts has been convinced that excess sugar consumption essentially constitutes a dietary poison and presently wishes to recommend a halving of sugar consumption. Predictably, industry is counter-attacking. As far back as 2003 the WHO linked local sugar consumption in South Africa to increased risk of chronic disease, including obesity and associated diseases.

Since then sugar consumption has increased markedly. Sugar industry figures illustrate per capita consumption rising by nearly 15% over the past 13 years, to over 37 kilogrammes for every citizen. Diabetes incidence has accelerated even faster, up by 3.8% in 2010 alone. Notably, deaths ascribed to diabetes have risen most amongst the black community, from 5 754 cases in 1999 to 12 513 in 2010.

But this unfolding epidemic has a far more sinister side. Individuals with diabetes are more likely to succumb to tuberculosis, our leading cause of death. They are more susceptible to hypertension and circulatory diseases. Diabetes complicates treatment of HIV and AIDS. Even otherwise routine infectious diseases like influenza are more risky in diabetics for several reasons. Therefore, as an apparently distinct disease diabetes has major impacts on other leading causes of death.

While sugar may not be proven as the sole cause of diabetes, it is nevertheless strongly associated with both causation and worsening of outcomes. Some population sectors are highly predisposed to diabetes, particularly those of Indian origin in South Africa, where it is the single leading cause of death. More worryingly, at least half, and up to 85% of local diabetics are undiagnosed. When they are, it is often too late.

This epidemic does not only affect South Africans. It is predicted to become a leading cause of mortality in sub Saharan Africa by 2020. Drinking a single 330 millilitre soft drink daily is estimated to raise the risk of diabetes by 22%. Two litres of cold drink contains at least a cup of sugar, sometimes more. In 2011 South Africans each consumed nearly 50 litres of cool drink.

These excessive levels of sugar consumption affect everyone, from building site labourers to mothers inadvertently preparing their children for obesity and diabetes. Moreover, the market predicts accelerated growth in sales, with the consequence of an anticipated near doubling of diabetes cases over the next fifteen years as high sugar intakes are compounded by other poor dietary and lifestyle choices such as a lack of exercise and excessive intake of fats and salt.

The financial burden of the cost of medication alone for diabetes patients in South Africa is staggering, at around R7000 per individual, or a cumulative cost of over R14 billion a year to our health system, further treatment aside. So what can we do about this assault on our health?

Mexico recently proposed a 1 peso (80 cents) per litre tax on sodas, as they are called there. With Mexican obesity rates reported at 70% of adults and a third of children, action is clearly needed. The initiative was, predictably and bitterly attacked both by manufacturers and the sugar industry. They questioned New York’s ex-mayor Michael Bloomberg’s attempt to promote the tax, which was recently rejected in his home city, accusing him of hypocrisy.

Other places around the world have mooted or instituted cool drink or sugar taxes to deal with the impacts of sugar consumption. 33 states in the US have soda taxes, as does France, with a 3.5% tax introduced in 2012. Norway has a broader sugar tax, as does Denmark, although the latter proposes to abandon it. Indian research shows a 20% cold drink tax could avoid nearly half a million cases of diabetes and make a dent in obesity rates.

The concept of these Pigouvian taxes is neither new nor unfamiliar. The economist Pigou suggested that if business profits by selling a product that creates high external costs – for instance, the health costs of tobacco and liquor – the state should mitigate these by taxing the product. In South Africa these are traditionally referred to as sin taxes. There is no reason that sugar, along with other unhealthy foods laden with fats and salt, should not be taxed in order, on the one hand, to offset health costs while reducing consumption on the other.

Of course the problem can arise, as with tobacco, that the state becomes as addicted to the tax revenue as consumers are to sugar or tobacco. This is not a glib comment; studies clearly show the addictive nature of sugar. Food technologists constantly strive to make food as enticingly palatable as possible through subtle combinations of fats, salt and sugar.

Given the combined health effects of these ingredients, stricter regulation, combined with taxation would seem to be the most sensible way to protect ourselves against ourselves from this premeditated assault by the food industry. It is economically unsustainable to continue to subsidise junk food by absorbing the direct costs to our health system in order to treat the symptoms while failing to tackle their causes.


This article was originally published by SACSIS, the South African Civil Society Information Service and is republished under a creative commons licence.