HIGGINS MDLULI: The sugar tax is destroying jobs, not promoting healthy outcomes
Recent research on the sugar tax is at best inconclusive or, worse, clearly shows it is ineffective
30 September 2024 - 05:00
byHiggins Mdluli
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There is growing global — and local — evidence that sugar taxes aren’t working as intended, despite claims to the contrary by some health activists.
SA introduced the health promotion levy, or sugar tax, in 2018 with the express intention to reduce diabetes and obesity. In the six years since, it is clear that the tax is not achieving this goal.
Recent scientific research on the sugar tax is at best inconclusive or, worse, clearly shows that a singular tax such as the sugar tax cannot address a broad lifestyle disease such as obesity.
One study presented by Priceless SA to a presidential task team on the sugar industry earlier this year showed that even though participants in Soweto drank fewer sugar-sweetened beverages because of the increased price point, their body mass index still increased over the study period. A second study presented by Priceless SA at the same event was conducted in Langa, Cape Town, and found that while the levy did lead to a decrease in the consumption of taxed beverages, those participants changed their buying patterns and switched to other food and beverage choices that were untaxed to achieve their carbohydrate intake. There is no evidence that they switched to healthier food choices.
This is a trend picked up by other academic studies. According to a Stellenbosch University statement in 2023 on the findings of research into the sugar tax, “nutrition interventions targeting specific foods or beverages may lead to adverse compensatory behaviours” such as eating and drinking other unhealthy foods and beverages.
And this is not unique to SA. Studies from the US dating as far back as 2017 show that sugar taxes don’t work. When sugar-sweetened beverages were taxed in Philadelphia, consumers compensated by purchasing other foods or turned to untaxed beverages, according to the University of Georgia. In 2023, five years after the introduction of the sugar tax in the UK, the country still faced rising obesity levels, calling the tax into question. Denmark scrapped its version of the sugar tax after only one year in favour of other public health outcomes.
The US study in Philadelphia bore out another worrying fact that should be especially chilling for SA: the burden of sugar taxes falls mostly onto lower-income groups. In a country such as SA, where at least 25% of the population is food insecure, driving up taxes on food and drink will only increase this crisis.
It is vital to scrap the sugar tax, not only to save rural livelihoods but also to buy time for the sugar industry to diversify into future products, the writer says. File photo: PAUL WEINBERG
At what point do we look at the data with common sense and admit the tax is not working? If the consumption of sugar-sweetened beverages has gone down but obesity and related non-communicable diseases have not, we can surely conclude that the tax is not driving positive public health outcomes.
But independent studies have clearly shown again and again that the sugar tax is destroying jobs.
After the tax was introduced in 2018, the National Economic Development and Labour Council (Nedlac) did a study that showed in the first year of the tax alone 16,000 jobs were lost in the sugar industry. Of these, 9,700 jobs were lost at farm level. Earlier this year, health activists attempted to claim these job losses were due to Covid-19 and not the sugar tax, when in fact these jobs were destroyed a year before the global pandemic hit in 2020.
SA’s cane growers are overwhelmingly small-scale farmers. SA Canegrowers represents 24,000 small-scale growers and 1,200 commercial growers. Small-scale growers are often black women who grow cane on small tracts of land. These growers are often anchors in their rural communities in KwaZulu-Natal and Mpumalanga and already face many challenges.
Independent studies by the Bureau for Food and Agricultural Policy, an agricultural consultancy, have shown that land under cane cultivation is declining as these small-scale growers, in particular, are forced out of the market due to pressures that include the sugar tax. The result can be catastrophic. Its modelling shows that under a continuing sugar tax regime, land under sugar cane cultivation is expected to decline, leading to a further 10% direct job losses by 2031.
The agricultural land that is suited to sugar cane is not often easily converted to other land crops, either because of the landscape or because of the lack of scale. The size of the plots that small-scale farmers use is also not necessarily suitable for livestock farming.
Losing these growers means they must become subsistence farmers, resort to crime, look for work outside their rural communities or rely on government grants to survive.
A sugar tax that is not effective cannot in good conscience be the reason we destroy the social fabric of rural communities. Moreover, an increase in poverty strongly correlates with an increase in poor health so by increasing poverty the tax is driving likely worsening health outcomes.
We need to rethink how we approach obesity and related non-communicable diseases in SA. A comprehensive study to identify the actual causes of obesity, looking at holistic dietary intake and lifestyle, is urgently needed. It is worth noting there is a dearth of evidence on SA’s health. The last nutritional study, the SA National Health and Nutrition Examination Survey, that looked at hunger, health and weight and lifestyle was conducted in 2011 and 2012. We need to follow the evidence, and there is no evidence that the sugar tax is addressing obesity or diabetes in SA.
Moreover, the single study on which the tax was based was a modelling study, calculating expected outcomes in theory. It was not based on real-life evidence, interviews or observations of people over time and is a lower quality of scientific evidence. Yet it was used to introduce a tax policy that inadvertently destroyed jobs.
SA Canegrowers is again calling for the sugar tax to be scrapped. It is vital to do so, not only to save rural livelihoods but it also to buy time for the sugar industry to diversify into future products, such as sustainable aviation fuels and bioplastics.
This also gives the government the opportunity to implement evidence-based interventions that can address SA’s crisis with non-communicable diseases, and ensure growth and stability in rural agriculture and the 1-million livelihoods that rely on the sugar industry as a whole.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
HIGGINS MDLULI: The sugar tax is destroying jobs, not promoting healthy outcomes
Recent research on the sugar tax is at best inconclusive or, worse, clearly shows it is ineffective
There is growing global — and local — evidence that sugar taxes aren’t working as intended, despite claims to the contrary by some health activists.
SA introduced the health promotion levy, or sugar tax, in 2018 with the express intention to reduce diabetes and obesity. In the six years since, it is clear that the tax is not achieving this goal.
Recent scientific research on the sugar tax is at best inconclusive or, worse, clearly shows that a singular tax such as the sugar tax cannot address a broad lifestyle disease such as obesity.
One study presented by Priceless SA to a presidential task team on the sugar industry earlier this year showed that even though participants in Soweto drank fewer sugar-sweetened beverages because of the increased price point, their body mass index still increased over the study period. A second study presented by Priceless SA at the same event was conducted in Langa, Cape Town, and found that while the levy did lead to a decrease in the consumption of taxed beverages, those participants changed their buying patterns and switched to other food and beverage choices that were untaxed to achieve their carbohydrate intake. There is no evidence that they switched to healthier food choices.
This is a trend picked up by other academic studies. According to a Stellenbosch University statement in 2023 on the findings of research into the sugar tax, “nutrition interventions targeting specific foods or beverages may lead to adverse compensatory behaviours” such as eating and drinking other unhealthy foods and beverages.
And this is not unique to SA. Studies from the US dating as far back as 2017 show that sugar taxes don’t work. When sugar-sweetened beverages were taxed in Philadelphia, consumers compensated by purchasing other foods or turned to untaxed beverages, according to the University of Georgia. In 2023, five years after the introduction of the sugar tax in the UK, the country still faced rising obesity levels, calling the tax into question. Denmark scrapped its version of the sugar tax after only one year in favour of other public health outcomes.
The US study in Philadelphia bore out another worrying fact that should be especially chilling for SA: the burden of sugar taxes falls mostly onto lower-income groups. In a country such as SA, where at least 25% of the population is food insecure, driving up taxes on food and drink will only increase this crisis.
At what point do we look at the data with common sense and admit the tax is not working? If the consumption of sugar-sweetened beverages has gone down but obesity and related non-communicable diseases have not, we can surely conclude that the tax is not driving positive public health outcomes.
But independent studies have clearly shown again and again that the sugar tax is destroying jobs.
After the tax was introduced in 2018, the National Economic Development and Labour Council (Nedlac) did a study that showed in the first year of the tax alone 16,000 jobs were lost in the sugar industry. Of these, 9,700 jobs were lost at farm level. Earlier this year, health activists attempted to claim these job losses were due to Covid-19 and not the sugar tax, when in fact these jobs were destroyed a year before the global pandemic hit in 2020.
SA’s cane growers are overwhelmingly small-scale farmers. SA Canegrowers represents 24,000 small-scale growers and 1,200 commercial growers. Small-scale growers are often black women who grow cane on small tracts of land. These growers are often anchors in their rural communities in KwaZulu-Natal and Mpumalanga and already face many challenges.
Independent studies by the Bureau for Food and Agricultural Policy, an agricultural consultancy, have shown that land under cane cultivation is declining as these small-scale growers, in particular, are forced out of the market due to pressures that include the sugar tax. The result can be catastrophic. Its modelling shows that under a continuing sugar tax regime, land under sugar cane cultivation is expected to decline, leading to a further 10% direct job losses by 2031.
The agricultural land that is suited to sugar cane is not often easily converted to other land crops, either because of the landscape or because of the lack of scale. The size of the plots that small-scale farmers use is also not necessarily suitable for livestock farming.
Losing these growers means they must become subsistence farmers, resort to crime, look for work outside their rural communities or rely on government grants to survive.
A sugar tax that is not effective cannot in good conscience be the reason we destroy the social fabric of rural communities. Moreover, an increase in poverty strongly correlates with an increase in poor health so by increasing poverty the tax is driving likely worsening health outcomes.
We need to rethink how we approach obesity and related non-communicable diseases in SA. A comprehensive study to identify the actual causes of obesity, looking at holistic dietary intake and lifestyle, is urgently needed. It is worth noting there is a dearth of evidence on SA’s health. The last nutritional study, the SA National Health and Nutrition Examination Survey, that looked at hunger, health and weight and lifestyle was conducted in 2011 and 2012. We need to follow the evidence, and there is no evidence that the sugar tax is addressing obesity or diabetes in SA.
Moreover, the single study on which the tax was based was a modelling study, calculating expected outcomes in theory. It was not based on real-life evidence, interviews or observations of people over time and is a lower quality of scientific evidence. Yet it was used to introduce a tax policy that inadvertently destroyed jobs.
SA Canegrowers is again calling for the sugar tax to be scrapped. It is vital to do so, not only to save rural livelihoods but it also to buy time for the sugar industry to diversify into future products, such as sustainable aviation fuels and bioplastics.
This also gives the government the opportunity to implement evidence-based interventions that can address SA’s crisis with non-communicable diseases, and ensure growth and stability in rural agriculture and the 1-million livelihoods that rely on the sugar industry as a whole.
• Mdluli chairs SA Canegrowers.
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