Sugar tax as a strategy to combat obesity

Rates of obesity and people with diabetes are rising around the world. In Germany alone, about half of adults are overweight. Almost one in five are obese.

More than 7% of the population suffers from diabetes, and this trend is increasing. However, too much sugar not only makes people sick, but also costs society dearly – either by increasing health insurance costs or causing labor shortages.

The debate centers on drinks high in sugar. Consumption of soft drinks, Coca-Cola, energy drinks and the like is considered to be one of the main reasons for the increase in the number of overweight people around the world. For this reason, the World Health Organization (WHO) has long recommends that these drinks be subject to a separate tax. German Food and Agriculture Minister Cem Ezdemir (Green Party) is also in favor of such a measure. Nine of Germany's 16 states are calling on the government to consider introducing such a tax.

What will the “sugar tax” bring?
According to Deutsche Welle, last November the Technical University of Munich showed in a study how effective it would be special tax on sugary drinks in Germany. Scientists estimate that over the next 20 years, up to 240,000 cases of type 2 diabetes could be prevented, and between 17,000 and 30,000 deaths could be at least significantly delayed.

Over the same period it would be possible save a total of up to 16 billion euros, 4 billion of which in the healthcare system alonefor example, due to the fact that it would be possible avoid obesity-related diseases. The number of sick days and early retirement due to health reasons will be significantly reduced, as will the number deaths among people of working age. The economy as a whole could benefit greatly from such a tax.

A recent study by the University of Washington in Seattle involving nearly 6,000 laboratory animals found that imposing a tax on sugary drinks reduces body mass index, in particular in children and adolescents. Researchers from the Technical University of Munich also note that consumption of sugary drinks is higher among teenagers, and therefore the health impact of such a tax in this age group would be even higher than average.

What the experience of other countries shows
More than 50 countries around the world have already introduced a tax on soft drinks, including the UK, France, Spain and Poland, as well as India, South Africa, Chile and Saudi Arabia. A few examples. Norway has a particularly long history of taxing sweets. In 1922, there was already a tax on sugar, which also applied to artificial sweeteners. Neighboring Sweden is also happy about this, since many Norwegians like to cross the border to buy chocolate. In 2018, the Oslo government again sharply increased the tax by around 80%. The result was a decline in soft drink sales in Norway.

Since 2014, Mexico has taxed sugary soft drinks at one peso (five cents) per liter. This corresponds to a tax burden of approximately 10%. Although the soft drink market shrank significantly the following year, the model was considered a success for many years. However, many consumers then switched to fruit juices and sweetened dairy products, which are not subject to the sugar tax, which at least partially negated the health benefits of such a tax.

This measure is also applied in India. Sugar-sweetened drinks are in the highest tax bracket – 28%, which puts them in the same same tax schedule as luxury cars and tobacco products.

In Germany, manufacturers have so far made a voluntary commitment to reduce sugar in drinks, with little impact. On average, the sugar content of soft drinks and energy drinks has dropped by just 2% since then. Countries with a progressive sugar tax rate have much better success rates. In the UK, for example, the sugar content of soft drinks, Coca-Cola, etc. in the first three years it fell by an average of 29%. And the above-mentioned simulation from the Technical University of Munich also proves this: if producers are taxed based on the amount of sugar, the effect will be stronger.

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