Soft drinks levy a “double success”

The three-tier levy on sugar-sweetened drinks has achieved its aim. In fact, it’s been a “double success” that could provide a model for future sugar policies, according to an opinion piece published in the British Medical Journal.

Firstly, products have been reformulated: two soft drinks of public health significance remain subject to the highest levy, Classic Coca-Cola and full-sugar (“Blue”) Pepsi.

Secondly, and perhaps more critically, a price differential has been created between sugared and sugar-free drinks. Waitrose, for example, sells 500ml bottles of Classic Coke at £1.40, and Diet Coke at £1.25—an 11% difference. With bigger bottles, in varying sizes, the difference in unit prices is 38%. The discounts in other retailers are also reportedly “within that range”.

“The healthy choice has become the cheaper choice,” noted Jack Winkler, emeritus Professor of nutrition policy at London Metropolitan University, and Tam Fry, National Obesity Forum chair, in their article for BMJ. “This has long been the Holy Grail for health economists. Normally, a healthy diet costs more.”

Indeed, companies aren’t foolish: they realise that the main customers for nutritionally improved products are the educated and affluent, willing to pay more for products they think will do them good. The new levy has changed that, the experts said.

“SDIL [soft drinks industry levy] cuts sugar intakes in two ways. Through reformulation alone, people consume less, just buying their normal drinks. We cannot yet measure how much, because sales of reformulated products will not be clear for months. But that change is likely to be large, strengthened by the second consequence of SDIL, the price differential, which will shift demand towards sugar free.”

Winkler and Fry suggest the model could be extended to “obvious candidates” like milk-based drinks, dairy products and breakfast cereals. Reformulation of cakes and chocolate might be trickier but not impossible, they said. The SDIL concept could also be applied to fat and calorie reduction.

 However, this type of levy won’t be a “simple plug-in solution” for everything. “The twin keys to success of a graduated levy on a problem nutrient are that it is applied to products where reformulation is feasible; and it is set at a level high enough to make a visible difference in retail prices, but not so high to depress demand altogether,” they wrote.

Comments are closed.

Footprint News

Subscribe to Footprint News