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Bittersweet economic impacts of a sugar tax

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Bittersweet economic impacts of a sugar tax:

Patrick-Masobe

Agility Health CEO Patrick Masobe believes concerns that a tax on sugary drinks could lead to job losses needs to be balanced against the economic impact of an increasingly unhealthy workforce. Photo: Agility Health

Submissions on the proposed tax on sugar sweetened beverages (SSBs) closed recently, with beverage manufacturers voicing concerns that a sugary drink tax could lead to job losses and impact on the economy. While these concerns cannot be dismissed, there is much at stake if South Africans do not embrace a sustainable approach to looking after their health.

“The epidemic of health conditions associated with high blood glucose levels, including diabetes, is already a national problem with wide-ranging economic repercussions, the full extent of which is not easy to quantify,” says chief executive officer of Agility Health, Patrick Masobe.

“Given the fact that low- and middle-income countries are experiencing a more rapid increase in the rate of diabetes and other lifestyle diseases than wealthier nations, reducing the morbidity and mortality associated with such conditions should be regarded as a national and regional development imperative.”

While we support calls for a tax on sugar-sweetened beverages, he argues that this is only a small part of a wider problem that is resulting in an increasingly unhealthy South Africa, burdened by growing rates of obesity and lifestyle related diseases.

The World Health Organization’s 2016 Report on Diabetes notes that there is not reliable data on the relative rates of type one and type two diabetes globally, although there has been a four-fold increase in diabetes prevalence since 1980. Agility Health data points to just over 10.5% of members of a particular medical scheme having diabetes, with roughly 90 percent of these being type 2 diabetics – that is the type of diabetes closely linked with lifestyle factors.

“The WHO has suggested that obesity and related conditions account for up to a fifth of global healthcare spending. One must balance the concerns voiced by the beverage industry with the economic impact of continuing on our present trajectory, considering that it has been estimated that lifestyle diseases cost South Africa’s GDP US$ 1.88 billion between 2006 and 2015,” Masobe adds.

“Many of our citizens are falling ill due to unhealthy diet and lack of exercise, and thousands die prematurely each year from non-communicable diseases (NCDs) linked to unhealthy diet. The impact of this on productivity, when one also factors in sick leave and workers performing less than optimally due to the symptoms accompanying such conditions, is immense – although difficult to measure accurately.

“It would be naïve to look at tax on sugar sweetened beverages (SSBs) as a golden elixir to fix the problem of growing rates of NCDs. Agility Health has long advocated a broad-based approach to tackling lifestyle related diseases, starting with public education and awareness campaigns.”

Masobe supports the proposed structure for a tax on sugary drinks. “The proposal for a tax on SSBs has not been structured in such a way that a tax would be levied according to the volume of sugar, or calorific sweetner, in each particular beverage. In this way, drinks containing less sugar would be taxed less relative to those with high sugar contents.

“As Agility Health, we see the value of this approach as a consumer education tool and consider that this would be a far more effective strategy than a tax levied as a percent of the price per litre, or per unit. It is hoped that this will be a major driver in promoting awareness of the calorie value of certain types of drinks relative to others and help South Africans to make more informed choices.

“This also presents an opportunity for big beverage industry players to reconsider the volume of sugar in their products. If the health of their consumers was not imperative enough, perhaps such a tax could encourage the industry to moderate the amount of sugar in certain drinks.

“The multinationals dominating the beverage market already have a diversified product range, including sugar free carbonated drinks and mineral water, that would not be affected by the proposed tax. If the tax on sugary drinks were to substantially influence consumer behaviour, and there is considerable debate about the degree to which this is likely to happen in the South African context, it is likely that the market for sugar free alternatives would grow proportionately,” Masobe observes.

“Alarmist predictions about job losses, both in the industry and indirectly at spaza shops, for instance, should be considered in this light. People are unlikely to stop buying sugar-sweetened drinks, but this tax help people to think more seriously about moderating their consumption and making healthier choices.

“The effects of sugar on the body can have serious, long-term health consequences if it is not used in moderation, and as part of a healthy lifestyle. There have also been studies on the addictive nature of sugar. With the introduction of a sugar tax, the immediate gratification that a sugar rush provides is balanced against the higher price of a sugary drink, as compared with a sugar-free alternative. It is hoped that introducing this dynamic to consumer choice may assist some people to think twice about the potential consequences for their health.

“It should be borne in mind, as part of the integrated approach to health promotion Agility Health supports, that artificially sweetened drinks may also be harmful if consumed immoderately. A drastic change is needed in the way South Africans understand food and exercise. Such a shift would require regulatory interventions, as well as informed decisions at individual level, for the overall national good,” he says.

“If South Africa does not tackle the problem of non-communicable diseases head on, the economic impact of dallying is likely to hurt us in the long run. However, change is never an easy process, and the most impactful interventions may initially be met with considerable resistance, but our collective attitude to our health needs adjustment.

“The consequences of ignoring the burgeoning problem of non communicable disease creep up slowly but surey, and for this reason it is imperative that we act now. We cannot expect a tax on sugary drinks on its own to solve this growing health problem, but with far reaching, and sustainable strategies we

 

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Source: Port Elizabeth – MyPR.

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