To gain control of expanding waistlines worldwide, unhealthy foods and drinks need a 20% fat tax, along with subsidies for healthy food, experts say in a new paper published online in the British Medical Journal.
Oliver Mytton, of the British Heart Foundation’s Health Promotion Research Group, and his colleagues at the University of Oxford conducted a review of about 30 international studies to determine the effect that food taxes — which are levied at a higher rate on food items considered unhealthy — have on public health. The team concluded that fat taxes can improve outcomes — but only if they put a significant dent in consumers‘ wallets.
“Economists generally agree that government intervention, including taxation, is justified when the market fails to provide the optimum amount of a good for society’s well-being,” writes Mytton. “[This] include[s] a failure to appreciate the true association between diet and disease, time inconsistency (preference for short-term gratification over long-term well-being), and not bearing the full health and social costs of consumption.”
More and more countries are adopting fat taxes in an effort to curb rising obesity rates. Both Denmark and Hungary have introduced a fat tax or junk food tax, and France is taxing sweetened drinks. These taxes on sugary beverages have the strongest association with health benefits, according to the study.
One U.S. study reviewed by Mytton and his colleagues found a 35% tax on sugar-sweetened drinks — $0.45 per drink — led to a 26% decline in sales. Based on their analysis of modeling studies, they concluded a 20% tax on sugary drinks in the U.S. would reduce obesity levels by 3.5% — from 33.5% to 30% among adults. A similar tax in the U.K. could cut up to 2,700 heart disease deaths a year.
“Soft drinks consumption is simpler in comparison with food, and we can be more confident of the likely effects,” says Mytton in an email. According to Mytton, when one food item is taxed, people tend to switch consumption to other food items that are not necessarily healthier. For example, if there’s a tax on foods higher in saturated fat, consumers may switch to foods high in salt. “These effects don’t really happen with drinks as the economic data suggests. They either buy a similar drink that is untaxed or they don’t buy a drink at all,” says Mytton.
The reason for this could be that the body doesn’t register liquid calories in the same way it does food calories, so it’s easier to overdo it with drinks. “People don’t tend to feel full from drinking a high-calorie drink, so it seems less likely that people will buy foods to replace taxed liquid calories,” says Mytton. “People need food, but as with alcohol and tobacco, they don’t need the extra calories they get from sugar-sweetened beverages.”
Other studies have shown people with lower incomes struggle more with weight gain. In the review, the authors argue a tax could greatly influence the eating habits of lower-income people. “There is some evidence that those who are poorer are more sensitive to price changes and so would experience greater dietary improvements,” writes Mytton.
But just how plausible is this fat tax? The authors note that the food industry argues taxes would be ineffective, unfair and would lead to job losses in the industry. But U.S. opinion polls show support for sugared beverage taxes ranges from 37% to 72%; people tend to be more in favor when the health benefits of fat taxes are emphasized. Previous studies show that a sharp tax hike on cigarettes in 2009 led to a significant decrease in U.S. smokers. The hope is that a fat tax could produce the same results.
Yet even some nutrition experts challenge the proposal of a blanket tax, arguing some high-fat foods are healthy — avocado, anyone? — and it’s necessary to differentiate between them. “Some high-fat food like nuts are related to reduced weight gain. A focus on sugar and refined starch is better, but as a first step I favor a focus just on sugar-sweetened beverages as the evidence is strongest for this,” Dr. Walt Willett, chairman of the department of nutrition at Harvard University’s School of Public Health, told ABC News.
In a corresponding analysis paper, Corinna Hawkes, a food policy and public health specialist at the Centre for Food Policy at City University in London writes, “There remains a long way to go for food policies to reach their full potential to encourage healthier eating— and what has been achieved so far has taken fierce political battles. But there is a strong case for continuing implementation.”
Here are the authors’ key components for a successful food tax:
- Taxing a wide range of unhealthy foods or nutrients is likely to result in greater health benefits than would accrue from more limited taxation; that said, the strongest evidence favors a tax on sugar-sweetened beverages.
- Taxation needs to be at least 20% to have a significant effect on obesity and cardiovascular disease.
- Taxes on unhealthy foods should ideally be combined with subsidies on healthy foods such as fruit and vegetables.
The study was published online Tuesday in the British Medical Journal.