News article

Taxing Sugary Drinks To Cut Lifestyle Disorders

Posted:  Wednesday, July 09, 2014

Levying a tax on sugar-sweetened beverages (SSBs) could help cut consumption of these drinks and lower the incidence of lifestyle-induced diabetes in India and other low- or middle-income countries, says a new study.

The study says that a 20 per cent tax on sugar-sweetened beverages could cut the incidence of lifestyle-induced or 'type 2' diabetes by 1.6 per cent and obesity prevalence by three per cent.

Taxes on unhealthy foods are attractive because they not only generate tax revenue that can be used for public health care, but also promise health benefits for individuals.

The projections say such a tax could help avert 11.2 million cases of obesity and 400,000 cases of type 2 diabetes in India between 2014 and 2023. India is projected to have 101.2 million diabetics by 2030, nearly double the current number.

Diabetes is responsible for two per cent of all deaths in India on an average. Reducing non-communicable diseases, especially diabetes and obesity, is therefore crucial to the country.

Doing this through taxing harmful and unhealthy products has been debated for a long time across the globe. The logic behind SSB tax, or “fat tax” when levied on food items that make one fat, is simple: taxes increase prices, which in turn decreases consumption, thereby reducing the risk of obesity, diabetes and other diseases.

While a tax on SSBs has been proposed in high-income countries, there are no estimates yet of its benefits in a middle-income country such as India with diverse sugar consumption patterns, says Sanjay Basu, Assistant Professor at the Stanford University School of Medicine, US.

The study was conducted by a team from the Stanford University School of Medicine, the Public Health Foundation of India, New Delhi, London School of Hygiene & Tropical Medicine and others and was published in PLoS Medicine.

It analysed data on consumption of SSBs and price variations from a national sample of over 100,000 Indian households, and calculated how SSB price changes altered an individual's consumption, and their substitution with other beverages.

The researchers analysed soft drink consumption from over 100,000 households during 2009-2010, studying how they responded to price changes in the past, then using that information to predict how a tax on soft drinks would influence consumption.

The results of the study suggest that rural young men would benefit most from the tax deterrent, rather than urban people who were presumed to be the largest consumers of SSBs.

"In the case of India, with less than five per cent of the people obese, (one is) not sure what sort of population impact we will see. In the studies conducted in UK and US the effects are small but there are a lot of fat people — so it might still make sense, but not for India," says S. V. Subramanian, Professor of population, health and geography at Harvard University says.

Also, says Subramanian, one needs to conduct randomised controlled trials; and also include the effects of processed fruit juices and artificial sweeteners before drawing a conclusion.

Nine per cent of Indians are obese, as compared to 25 per cent in UK and 35.7 per cent in the US, according to official data.