17 June, 2014
Australian Beverages Council responds to calls for soft drink tax
“The non-alcoholic beverages industry is not anti-tax and pays hundreds of millions of dollars in tax each year, but it is against discriminatory and regressive measures such as taxing specific products, such as soft drinks – as a means to combat overweight and obesity. Singling out or indeed demonising any one food, beverage or nutrient in the whole diet isn’t going to do anyone any good. It didn’t work a decade ago with ‘avoid fat’ and won’t work now with soft drinks”, said the Council’s CEO, Mr Geoff Parker.
“Australia already has a price differential through the GST that makes unprocessed foods and drinks cheaper, by up to 10%. If the Government was seriously considering a discriminatory tax on a particular food or drink to either raise revenue and/or attempt to tackle the growing waistlines of Australians, then the industry would recommend a broader tax reform through the GST, an increased emphasis on raising people’s awareness of the whole diet, and programs to get people, especially kids, more physically active. These measures would have a far greater impact on the nation’s overweight and obese than a tax on one food or beverage.
“In fact research shows that sugar consumption from soft drinks in Australia has decreased in recent years, while obesity rates continue to increase. The latest Australian Beverage Trends Report highlights that total sugar contribution from soft drinks has dropped by around a quarter (26%) for each person over the past 15 year1”, Mr Parker said.
“We know that the majority of Australians do not support a tax. Latest research shows that around two-thirds of Australians agree that a tax on soft drinks would be ineffective in reducing obesity. And a further 74 per cent believe increasing education around healthy diets and lifestyles would be a better way to reduce obesity than a tax on soft drinks.2
Both in Australia and around the world, there is no evidence that such a tax would work. The Henry Tax Review stated such measures are problematic, as did the Productivity Commission’s Report into Childhood Obesity.
“Interestingly, a further academic study published in the same journal ‘Health Economics’ earlier this year also cast serious doubt of the effectiveness of using tax increases on sugar-sweetened beverages to curb obesity.3 The study concluded that often people shift consumption to other food/beverages and actually increase their daily caloric consumption.
The industry produces a broad range of products to suit everybody’s lifestyle, taste and kilojoule needs. Taxing one particular nutrient, food or drink won’t help Australians address their expanding waistlines. Real change will only come about through educating people about the concept of the total diet and increasing the health literacy of all Australians,” Mr Parker concluded.
For more information, or to arrange an interview with Australian Beverages Council CEO, Geoff Parker, please contact: Australian Beverages Council CEO, Geoff Parker, +61 2 96622899 or Megan Magill, 0438 777 303, firstname.lastname@example.org
The Australian Beverages Council is the peak body for the non-alcoholic beverages industry and represents 95% of the industry’s production volume through membership.
- Levy G.S., Shrapnel W.S. (2014) Quenching Australia’s thirst: a trend analysis of water-based beverage sales from 1997 to 2011. Nutrition & Dietetics. doi: 10.1111/1747-0080.12108
- IPSOS MORI consumer research, May 2014,commissioned on behalf of the Australian Beverages Council
- Jason M. Fletcher, David E. Frisvold, Nathan Tefft (2014) Non-linear effects of soda taxes on consumption and weight outcomes Health Economics 2014 (early view version), http://onlinelibrary.wiley.com/doi/10.1002/hec.3045/abstract