Study Says Tax on Sugary Drinks Will Only Be Partly Effective

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A new study reveals that the new sugar tax that is imposed on soft drinks may urge young people to turn to healthier beverages. However, it is not likely to be of help to those who have a high-sugar diet.

Three economists at the Institute for Fiscal Studies – Rachel Griffith, Martin O’Connell, and Pierre Dubois – have raised questions regarding the efficacy of the levy of the government on the soft drinks industry.

Drinks makers who do not reduce sugar levels will be required to pay 18p per litre on drinks that have over 5g of sugar per 100ml and 24p per litre on those that have 8g or more of sugar per 100ml. About half of the makers have already reduced sugar content.

The modelling of the economists that was recently presented at the annual conference of the Royal Economic Society at the University of Sussex. It simulates the effects of a 25p a litre tax. It also says that the tax will urge young people to decrease the amount of sugar that they buy via soft drinks by approximately 80 percent more compared to the average consumer.

The study notes: “Our results show that young consumers would lower their sugar consumption by more than older individuals in response to a soda tax. The tax, therefore, succeeds in achieving relatively large reductions in sugar among one group.”

But the said research also implies that “those with high-sugar diets are relatively priced inelastic and therefore fail to lower their sugar consumption in response to the tax by more than more moderate sugar consumers.”

The findings have indications for the United Kingdom and beyond. A growing number of countries and cities have adopted levies on sugary drinks to help battle sugar consumption, which is blamed for the increasing obesity levels. The World Health Organisation promotes that no more than 5 percent of calories should come from added sugar. However, by using the data drawn from the National Diet and Nutrition Survey, the economists predict that 94 percent of individuals in the United Kingdom exceed the recommendation of the WHO.