So, the sugar levy has now come into force. Ministers and campaigners believe it has already proved to be a success with many firms reformulating their products ahead of the change. But others say it is still too early to judge the impact. Leading brands such as Fanta, Ribena, Irn-Bru and Lucozade have cut the sugar content of drinks or replaced sugar with artificial sweeteners – to a noisy chorus of criticism from campaigners on Twitter! Only Coca-Cola has not. The introduction of the levy means the UK joins a small handful of nations, including Mexico, France and Norway, which have introduced similar taxes.

The justification for the tax is that it will reduce the consumption of sugar and that, in turn, will reduce societal levels of obesity. The levy is being applied to manufacturers – whether they pass it on to consumers or not is up to them. So, how does it work?

  • Drinks with more than 8g per 100ml face a tax rate equivalent to 24p per litre.
  • Those containing 5-8g of sugar per 100ml face a slightly lower rate of tax, of 18p per litre.
  • Pure fruit juices will be exempt as they do not carry added sugar, while drinks with a high milk content will also be exempt due to their calcium content.

Originally, the Treasury forecast it would raise more than £500m a year, but that has now been reduced to £240m because some manufacturers have reduced the sugar content in their products. In England that income is being invested in school sports and breakfast clubs. Products such as cakes, biscuits and other foods are not covered by the tax, although a separate initiative is encouraging manufacturers to reduce the sugar content of those items voluntarily.

Mexico introduced a tax on sugary drinks on 1 January 2014, which operates in a similar way to the UK’s. By the end of its first full year, Mexicans were consuming 12% fewer sugary beverages than in the year leading up to the tax’s introduction. But there is no evidence that this has translated into a reduction in population levels of obesity, as people are able to switch to other sugary products. In fact, nowhere this policy has been tried will you find evidence that it has impacted on obesity levels.

So, is excessive sugar intake, as opposed to simply eating too much, responsible for rising levels of obesity? Let’s just look at a couple of facts. There is no doubt that adult obesity has increased over the past 40 years across the world. The number of people in the UK with a body mass index over 30 has risen from 8% of the population to around 30%. Obesity is strongly associated with several chronic illnesses, particularly type-2 diabetes, although obesity is by no means the only cause. The question at issue here is how strongly is sugar consumption implicated in the rise in obesity and its related diseases? It is not so long ago that the fat content of our diet was regarded as the main cause of obesity, since when dietary fads such as the Atkins Diet have suggested that carbohydrates, which break down into sugars, are now regarded by many as the new ‘bad guy’ on the block.

Sugar consumption peaked in the UK in 1961 at just over 50 kilograms per capita. Today it is just over 30 kilograms, so the rise in obesity has correlated with a fall in the consumption of sugar added to our diets, including the sugar added to dessert products. But all sugars are not the same. Or are they? Insofar as blood sugar levels are a health worry, it is important to note that the blood sugar concerned, glucose, is not the same as the sugar we add to our tea or coffee, which is sucrose. Sucrose is a combination of two simpler sugars – glucose and fructose – which are separated when sucrose is digested. A great deal of concern has also been expressed about the use of high-fructose corn syrup (HFCS), but EU regulations strictly control HFCS production so it is far less commonly used in the UK than it is in the United States.

Whilst sucrose is an important source of glucose in the Western diet it is by no means the only one. Foods high in starch such as potatoes, rice, pasta and bread also break down into sucrose once consumed. So, even without food products that contain added sugar the switch from diets high in saturated fats to ones high in carbohydrates – which was official advice for nearly 40 years – will have increased our consumption of sugar.

A lot of the government policies in relation to diet and disease seem to reflect the views of noisy campaign groups like ‘Action on Sugar’. The justification they provide for government intervention is that ‘Big Food’ and ‘Big Sugar’ (like ‘Big Alcohol’) are engaged in a deliberate strategy of addiction. Sugar, according to Robert Lustig, the activist academic behind Action on Sugar, is an addictive substance and much of our food, particularly processed foods, is deliberately spiked with sugar to keep us hooked. And, of course, alcohol is an addictive substance too! This fantasy of a conspiracy of addiction leading to a form of covert corporate coercion is the basis on which groups like Action on Sugar seek to persuade government that people don’t really make free choices when they buy Jamie Oliver’s Eton Mess, or a can of cola.

Already campaigners are suggesting that the sugar levy is just a first step, and that further tax measures designed to force food producers to reformulate their products are on their way. They have processed foods and microwave products firmly in their sights. In many cases ‘public health’ recognises that reformulation to remove sugar and salt is just impossible, so they want government to regulate portion size instead. This has given rise to ‘shrinkflation’ – reductions in the size of bottles, cans, and processed foods to reduce calories – but without reducing price!

Nanny state policies that result in portion control and sin taxes are an attempt to impose middle class food and lifestyle values on the poor – and it is those on low incomes that end up paying disproportionately for regressive taxes like the sugar levy. Whatever happened to free choice? It seems to me that people have plenty of information about the content of what they eat and drink and that there are a wide variety of ‘healthy choices’ available to them. Major soft-drinks’ producers already provide zero calorie and diet options. Government intervention is only justified if there is a failure of the market to provide either information or choice and that is clearly not the case. But that won’t stop nanny wagging her finger! Now, where did I put my pack of M&M’s?

Paul Chase

Paul Chase is a graduate Political Economist with over twenty years of experience in operating licensed retail premises. He is a co-founder of CPL Training and as a Director and Head of UK Compliance he is responsible for ensuring the business targets of his department are delivered to the Board. Widely acknowledged as a sector expert, Paul is also responsible for compliance course development and works closely with awarding bodies, developing and maintaining CPL's licensed retail sector qualifications. In addition, Paul also manages a number of key corporate accounts within the company.