ESSA

ESSA

A hard think about soft drink


Kathryn St. John

By

May 23rd, 2015


The sugar content of soft-drinks and other sugary drinks has been linked with negative health and welfare outcomes. So what measures should be taken by policy-makers? Kathryn St. John evaluates the policy options.


A spoonful of sugar may help the medicine go down, but isn’t nine – the number of teaspoons of sugar in a 330ml can of cola – excessive?

Australians consume large quantities of sugary soft drinks. Studies undertaken by public health authorities and organisations place Australia among the top 10 countries globally for per capita soft drink consumption.

Consumption of large volumes of soft-drinks and other sugary beverages has been associated with a number of health problems. The sugar content of these drinks is linked to obesity and chronic diseases related to obesity.

The economic and social impacts of obesity and its related health problems are substantial. A 2010 study published in the Medical Journal of Australia found the total cost of Australia’s weight problem to be $21 billion per year. This figure is calculated as the sum of direct costs, such as the costs associated with hospitalisation and medication.

The indirect costs associated with being obese or overweight are also considerable but not easily quantified. Workers with high BMIs are generally less productive due to increased disability and illness, and sickness related absenteeism. Negative health effects also reduce peoples’ physical and emotional wellbeing, lowering their quality of life and overall life expectancy.

The costs associated with the excessive consumption of sugary drinks and obesity provide strong rationale for the introduction of measures aiming to reduce demand.

So how might we reduce the demand for soft-drinks? Several measures are available to policy-makers.

Policy-makers could introduce a tax to discourage the excessive consumption of soft-drinks. In 2001 sugary beverages received an effective 10 per cent tax cut when the Wholesale Sales Tax was replaced with the Goods and Services Tax. A new tax would offset the previous tax cut by raising prices and discouraging consumption.

A similar disincentive was introduced in 2008 in an effort to reduce the consumption of pre-mixed alcoholic drinks known as “alcopops”. The alcopops tax – levied at a flat rate of 70 per cent – brought about a 31 per cent reduction in the consumption of pre-mixed drinks between 2008 and 2011. The tax, however, failed to reduce the number of young people admitted to hospital for alcohol-related harm due to their substitution towards spirits.

The lesson from the alcopops tax is that any tax on soft-drinks needs to be applied broadly on sugary drinks, which include flavoured milks and sports drinks, if it is to be effective.

Another alternative would be to place restrictions on the sale of sugary drinks. Sales of cans of sugary drinks, for instance, could be banned in school canteens and other places frequented by children, and employers could remove sugary drinks from workplace cafeterias. Such measures, however, are likely to be criticised for being overly paternalistic.

Policy-makers could instead introduce another set of measures that aim to bias peoples’ thinking so that they make choices more consistent with their own interests. Such measures are “libertarian” – as they respect peoples’ freedom of choice – while still “paternalistic” – as they remain interventions aimed at influencing peoples’ behaviour. The term “libertarian paternalism” was popularised by Cass Sunstein and Richard Thaler in their 2008 book Nudge as a means of describing policies of this kind.

A libertarian paternalist, instead of banning sugary drinks in school canteens, might change the arrangement of drinks in the refrigerator so that healthier drinks, such as reduced fat milk, are placed on shelves at the eye level of children. A libertarian paternalist might also adopt a food and drink ‘traffic light’ label system, where red, amber and green signify foods and drinks high, medium and low, respectively, in fat, sugar and salt.

Such nudging measures have been implemented successfully in the past. In 2012 Australia became the first country in the world to require that tobacco products be sold in plain packaging. Research studies have found that plain packaging has increased negative perceptions about smoking. In addition, in one study, participants predicted that plain packaged cigarettes tasted worse than identical cigarettes sold in regular packaging.

Nutrition-focused programs should also implemented in schools to educate students about the importance of maintaining a healthy diet. Educating school aged children, and their parents, about the negative health consequences of excessive consumption of fatty foods and sugary drinks should help them to establish healthy eating habits.

The school programs could be integrated into a broader campaign warning of the negative effects of consuming large volumes of sugary drinks. Adverts could be run on television, and displayed at sporting and other events where large volumes of sugary drinks are often consumed. The adverts could also be used to promote healthy alternatives to sugary drinks to guide people towards making better choices.

Policy-makers should take effective action to reduce demand for sugary drinks if they are serious about Australia’s rising obesity problem and its negative consequences.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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