The rising prevalence of obesity and obesity-related illnesses parallels the increase in sugar consumption across the globe. To limit consumption of sugar and tackle obesity, the World Health Organization has recommended that member states implement a tax on sugar. Such a tax is envisioned to reduce sugar consumption at a societal level, generate stable revenue for governments, and drive product reformulation. However, at present there is insufficient evidence to suggest any beneficial effect of a sugar tax on the incidence and prevalence of obesity.
This review examines the effectiveness of a sugar tax as an obesity prevention strategy.
A qualitative review of modelling and observational studies investigating the link between sugar tax and obesity, and conducted over the past ten years, was carried out.
Modelling studies suggest that a tax on high-sugar foods and beverages is likely to have beneficial effects on obesity as increased price of taxed items leads to reduced consumption. However, observational studies suggest little benefit of a sugar tax on actual obesity rates in a population. Taxes in combination with other policy and regulatory approaches, for example health food subsidies and education campaigns, might be more effective than a tax on its own.
A tax on sugar is likely to be a step in the right direction as it would raise public awareness of the negative health effects of excess sugar and de-normalise consumption of excess sugar.
The obesity epidemic
Over the past few decades, overweight and obesity have risen to epidemic proportions all over the globe. In 2014, more than 1.9 billion adults were overweight and 600 million were obese. In 2013, 42 million children under the age of five were either overweight or obese, and this is predicted to increase to 70 million by 2025. The growing prevalence of childhood obesity is particularly alarming given that it is a predisposing factor for lifelong obesity. Obesity, defined as having a body mass index (BMI) greater than or equal to 30, is a major risk factor for non-communicable diseases such as cardiovascular disease, diabetes, cancer, and mental illness. Since non-communicable diseases were responsible for 68% of all deaths in 2012,  it is apparent that the health burden of obesity is high.
Obesity is a complex heterogenous disease that arises from an interplay between our genes and the environment we live in. Highly energy-dense diets combined with a lack of adequate physical activity leads to a positive caloric balance and hence weight gain in genetically susceptible individuals. Our diet and physical activity are increasingly shaped and driven by broader social, cultural, economic, and political landscapes that are often beyond individual control and awareness. The modern obesogenic environment, which provides easy access to calorie-rich processed food and encourages sedentary lifestyle, is mismatched to human physiology that evolved to survive in an environment of food scarcity. At a population level, obesity can be viewed as a manifestation of a global economic system that currently prioritises wealth creation over health creation.
Obesity’s sweet tooth
In recent decades, the rising prevalence of obesity has closely paralleled the burgeoning consumption of sugar all over the world. Sugar is recognised as one of the biggest risk factors for obesity,[10-15] and the leading source of sugar in the diet is sugar sweetened beverages (SSBs). Therefore, the current review will focus on SSBs as a proxy for sugar and the discussion about policies aimed at limiting sugar intake (i.e. sugar taxes), will predominantly revolve around SSBs.
SSBs are non-alcoholic beverages with added sugar and include soft drinks, fruit drinks, sports drinks, energy drinks, iced tea and coffee, and lemonade. SSBs are becoming increasingly popular in low- and middle-income countries, with Latin America and Asia leading the world in consumption. The worldwide impact of SSBs on the burden of adiposity-related cardiovascular disease, cancer, and diabetes is estimated at a total of 8.5 million (95% CI: 2.8 – 19.2) disability-adjusted life years (DALYs) .
Limiting the intake of free sugars to less than 10% of total daily energy consumption is strongly recommended by the World Health Organisation and the US Dietary Guidelines Advisory Committee.[18, 19] For every additional serving of SSB per day, the likelihood of a child becoming obese increases by 60% over the course of two years. The energy obtained from SSBs is added to an individual’s total energy intake rather than displacing other sources of calories due to the poor satiating properties of sugar in liquid form. The net increase in calorie consumption is likely to contribute to an increase in body mass. Given the high burden of obesity-related illnesses on healthcare systems  and the strong evidence linking excess consumption of SSBs to obesity in children and adults,[15, 22] a reduction in SSB consumption is warranted. A decrease in consumption is especially pertinent as the major SSB consumers are children, adolescents and poorly educated individuals from lower socio-economic strata of society who may be less aware of the harmful effects of added sugar.
Sugar tax as an obesity prevention strategy?
Population health interventions aimed at curbing the consumption of excess sugar are pertinent to curtail the obesity epidemic. Price is one of the key factors influencing food purchasing behaviour. People tend to reduce consumption of unhealthy foods in response to increased prices of such products. To discourage purchase of SSBs and address the growing burden of obesity, countries such as France, Mexico, the UK, and Hungary, and several jurisdictions in the USA, have implemented a tax on sugar. Following implementation of a €0.11 per 1.5 L excise tax on SSBs, which translated to a 6% price increase, France saw a 6.7% decline in demand for cola in the first two years. SSBs are a sensible target for a sugar tax as they have a high calorie density with no additional nutritional value [10, 25] and can be clearly defined for policy implementation.
A number of assumptions underscore the success of an SSB tax : first, the tax must be passed onto consumers, leading to an increase in cost; second, SSBs follow the law of demand; and finally, the tax leads to a significant net reduction in energy intake despite substitution by consumers, for example by increasing consumption of fruit juices with comparable caloric content. While a tax on sugary drinks may not be the silver bullet for obesity on its own, it has the potential to slow the epidemic. For this reason, recommendations to implement diet-related taxes should be taken seriously.[28, 29]
The success of an SSB tax as an obesity prevention strategy remains controversial. The plethora of studies investigating the link between sugar taxation and obesity prevention demonstrate conflicting results. There is currently no consensus regarding the best approach to implement a sugar tax. Furthermore, existing meta-analyses on the topic show inconsistent findings and are unable to include many primary studies in their analysis owing to methodological inconsistencies.
Electronic databases (PubMed and Web of Science) were searched for relevant journal articles between 1 January 2007 and 1 July 2017. The year 2007 was chosen to ensure included studies were relevant to modern dietary habits and practices.
The following search strategy was used: (tax* OR price* OR economic* OR financial*) AND (sugar OR sweetened OR beverage* OR drink*) AND (intake OR consumption OR demand OR sale* OR diet OR weight OR overweight OR obes* OR body mass index OR BMI).
Searches were limited to articles published in English. Relevant articles were also identified by searching the reference lists of included studies. Abstracts were assessed for suitability of inclusion. Studies that were found to be suitable were read in full and their salient features reported here.
Economic feasibility of a sugar tax
Consumers do not bear the full costs of their decisions when it comes to high-calorie foods and beverages. It is estimated that an individual with a BMI between 30 and 35 will accumulate 30% higher medical costs than a normal weight individual; this increases to 50% in individuals with a BMI greater than 35. In Canada, obesity-related healthcare costs are close to $6 billion  whereas in Australia this figure is close to $10.7 billion. In addition to direct healthcare costs, there are indirect costs to the community associated with absenteeism and obesity-related premature death.
A number of modelling studies have reported substantial healthcare cost savings and stable revenue streams from a tax on sugar.[14, 36-38] For example, annual healthcare cost savings of $23.6 billion (95% CI: 9.33 – 54.9) and annual revenue of $12.5 billion (95% CI: 8.92 – 14.1) have been predicted for a tax of $0.01 per ounce of sugar in the United States (US). Importantly, a sugar tax combined with a fruit and vegetable subsidy is deemed to be poverty neutral, an important consideration given the significantly higher relative cost of fresh produce, especially in rural and remote communities. The revenue generated from an SSB tax can be used to cover the healthcare costs of obesity, support subsidies on healthy food options, and fund public and school education campaigns promoting childhood nutrition and obesity prevention.
Effectiveness of a sugar tax for preventing obesity
Of various taxes on “unhealthy” foods, a tax on sugar was modelled to have the biggest health gain in the Australian population, equating to 270,000 DALYs (95% CI: 250,000 – 290,000) averted. The effect of a sugar tax on BMI was found to be modest, equating to a BMI reduction of 0.1 in males and 0.06 in females, and a decline in obesity prevalence of 2.7% in males and 1.2% in females . In a study modelling the German population, a 20% SSB tax was shown to reduce the prevalence of obesity by 4% in males aged 20 to 29. Similarly, a modelling study by Cancer Research UK estimated that a 20% tax on SSBs could prevent 3.7 million people from becoming obese by 2025. Significant, albeit small, inverse associations between SSB taxes and weight gain have been reported by other modelling studies. These could represent important changes over time and alter the prevalence of obesity at a population level. Importantly, reductions in energy consumption were more pronounced in low- and middle-income groups.[38, 41, 43]
One of the biggest limitations of these studies is that they are population models. They rely on national data which may be outdated and assume a linear relationship between weight changes and energy consumption without accounting for substitution behaviour by consumers and often relies on self-reported data. The substitution effect is an obvious confounder in studies that do not classify fruit juices as SSBs, despite juices often containing more sugar than soft drinks. Another limitation of modelling studies is the lack of information on long-term SSB price elasticity that is specific to geographic and economic subgroups.
Six months after implementation of an SSB excise tax ($0.01 per ounce), consumption of SSBs decreased in Berkeley, California (–21%) and increased in comparable neighbouring cities that did not levy a sugar tax (+4%). Of the 124 people who reported changing drinking habits as a result of the tax, 82% reported drinking SSBs less frequently and 40% reported drinking smaller sizes because of the tax. Similarly, following introduction of an SSB tax (1 peso/litre) by the Mexican government, the purchase of SSBs declined by an average of 6% during the first year of the tax and this decline was greater in low income groups. The average Mexican purchased 4.2 litres less taxed beverages than expected during the first year, however, purchase of untaxed beverages increased by 13 litres on average. Whether the increased consumption of untaxed beverages compensated for the reduced caloric intake due to the decline in taxed beverages was unable to be determined, so the effect of the sugar tax on net caloric intake remains to be seen. Given their short time frame, these observational studies provide no indication of the effect of a sugar tax on actual obesity rates in a population.
Similarly, surveys investigating consumers’ purchasing behaviour may not necessarily predict their actual purchasing habits. This is critical in light of the fact that a 20% tax on SSBs did not result in an appreciable reduction in consumers’ likelihood to buy SSBs, despite their perception that they were more expensive. Notwithstanding these pitfalls, a review of cross-sectional and longitudinal studies investigating the impact of sugar taxes on weight gain found several studies that demonstrated an inverse association between price increase of SSBs and point prevalence of overweight and obesity. However, the magnitude of change reported in these studies was small.
Reduced consumption of sugar by virtue of an SSB tax may not necessarily translate to decreased body weight, particularly if unhealthy alternatives still exist. A tax on SSBs will only be effective in reducing obesity when there is no substitution with another untaxed high-calorie food or beverage. A tax on sugar-rich foods (e.g. confectionary) in conjunction with a tax on SSBs would reduce the likelihood of substitution and therefore increase the effectiveness of the public health intervention. Taxes on high-fat foods will need to be considered in the future as adjuncts to the sugar tax. Given the complexity of taxing foods high in sugar and fat, and limited research on their effectiveness, this requires further study.
In addition to reducing calorie intake through a sugar tax, other aspects of the obesogenic environment that require monitoring and regulation include food labelling, food portions, food advertisements, and plain packaging. A sugar tax on its own is unlikely to be the panacea for obesity prevention. It is widely accepted that taxes have the potential to reduce sugar consumption, drive production reformulation, and generate substantial revenue for governments. While it appears plausible that reduced sugar consumption and product reformulation would be beneficial to tackle obesity, whether this is actually the case remains to be seen. To address the obesity epidemic, a number of other population level policy measures, including advertising restriction, reformulation targets, health star rating systems, promotion of healthy transport choices, and sustained high-impact education campaigns are warranted.
While the effect of sugar taxes on SSB consumption and obesity have been carried out in some low- and middle-income groups,[38, 41, 43] there is a paucity of literature from developing nations on the impact of decreasing SSB consumption on obesity rates. This is pertinent given that low- and middle-income nations are disproportionately impacted by obesity and related non-communicable diseases.
Obesity and obesity-related diseases are a significant burden on healthcare systems around the world. The global prevalence of obesity has increased and excess consumption of sugar, in particular SSBs, is one of the strongest drivers of that increase. To curb the obesity epidemic, a number of countries have adopted various forms of sugar taxes. While theoretically and economically sound, a sugar tax on its own might be insufficient to curb the obesity epidemic. However, a tax on sugar is likely to be a step in the right direction as it would raise public awareness of the adverse health effects of excess sugar and de-normalise excess consumption. A tax on SSBs can also encourage industry to reformulate its products with lower sugar levels. Taxes in combination with other policy and regulatory approaches, for example subsidies to healthy foods, graphic warning labels, and awareness campaigns, might be more effective to curb the obesity epidemic than a tax on its own. A sustained, focussed, and multi-pronged public health intervention worked in the past against Big Tobacco. There is no reason to believe that similar perseverance will not work against Big Sugar.
Saiuj is a first year medical student at the University of Western Australia with a passion for understanding the social and commercial determinants of health. He also has an interest in tissue engineering, in particular organoid technology, and the promising that holds for many aspects of medicine in the future. He graduated last year with Honours in pharmacology.
Conflicts of interest
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