Taxing Sugar-Sweetened Beverages:
A Promising Measure
for Obesity Prevention
Evidence and public opinion support the implementation of an excise tax on soft and energy drinks.
The revenue generated by this tax would be invested in obesity prevention and healthy lifestyle promotion.
Objectives
SUGAR-SWEETENED BEVERAGES (SSB)
and Obesity: A Well-established
Relationship
Children:
With an excise tax on soft and energy drinks, it would be possible to:
›› Improve access to healthy, quality foods for Quebec youth.
A special tax, based on the “excise duty” model, is paid by producers and importers, similar to
alcoholic beverages. This type of tax is based on quantity produced instead of the value of the
product.
A typical soft drink (355 ml/12 oz) contains
7-10 teaspoons of sugar.
1
1
(355 ml/12 oz)
a day
The revenue generated by this tax would provide financing for concrete
measures to prevent obesity, such as improving access to and quality of
school meals.
›› Ensure that the effects of SSB on our health are recognized.
Adults:
SSB
Discussion
WIDESPREAD PUBLIC SUPPORT FOR TAXATION
›› 77% of the Quebec population is in favour of imposing a tax of which
the revenues would be invested in preventing obesity and promoting
healthy lifestyles5.
or more
SSB
a day
=
increased risk
of obesity of
60%
1
Revenue that would result from the adoption of this excise tax
=
The consumption of SSB is
the only dietary habit that
is consistently related to
overweight among children3
›› A majority of Canadians would like the revenue generated by such a tax
to be invested in schools and improving school meals6.
increased risk
of obesity of
27%
X
35.8 million
hectolitres* (hl)
(
Consumption of
soft drinks in Canada4
)
24%
(
In the United States,
a similar approach is
being actively pursued.
Most advocates are
recommending a tax of
1¢ per ounce. Baltimore
and Washington DC have
already adopted a tax on
bottled drinks or soft drinks.
ountries such as Romania,
C
Hungary, Belgium,
France, and Chile are
assessing the possibility of
taxing products harmful to
health, including SSB.
Denmark
recently increased
already-imposed taxes
on soft drinks, among
others, in order to
reduce consumption.
The idea of taxing products harmful to health, such as SSB, is increasingly being developed
in many countries for various reasons, including to:
Estimate of soft drink consumption in Quebec:
2
SSB Taxation: Not Just a Local Issue!
)
Proportion of Canadian
population living in Quebec
=
›› Re-inject the resulting revenues into prevention activities and health promotion.
8.6 million hl
Increasing support for such initiatives
›› The World Health Organization recognizes that habitual consumption of SSB is a factor
in the global obesity epidemic7.
›› Offset the healthcare costs resulting from the consumption of SSB
and the industry’s substantial investment in marketing.
›› Adopt a tax that would discourage the consumption of these beverages.
›› According to the Centers for Disease Control and Prevention, reducing consumption
of SSB is one of the six strategies proposed to prevent and reduce overweight and obesity8.
Additional health consequences
that cannot be ignored
›› Tax of 1¢ per litre = approximately $8.6M
›› Tax of 1¢ per litre = approximately $35.8M
›› The
Government of Canada has identified SSB consumption as a contributor to childhood obesity9.
›› Tax of 5¢ per litre = approximately $43M
›› Tax of 5¢ per litre = approximately $179M
›› Tax of 10¢ per litre = approximately $86M
›› Tax of 10¢ per litre = approximately $358M
›› The Yale Rudd Center for Food Policy and Obesity is actively encouraging
the establishment of fiscal measures to reduce SSB consumption.
›› Type 2 diabetes
›› Metabolic syndrome
›› The United States Institute of Medicine of the National Academies considers that the adoption
of a tax to discourage consumption of food products with little nutritional value, such as SSB,
would have beneficial effects for jurisdictions taking such a measure10.
›› The Organisation for Economic Co-operation and Development maintains that such fiscal
measures would have positive cost-benefit results11.
›› Hypertension
›› Cardiovascular diseases
›› In a report commissioned by the Canadian Heart and Stroke Foundation, a group of experts
recommended implementing SSB taxation12.
The examples below illustrate the potential impact of SSB taxation. ›› Dental health
›› Bone health
Price = 59¢, corresponding to 17 ¢/100 ml
355 ml
Major investments
to attract
consumers
(12 oz)
Price variation of items ($ CAN) since 1995
relative to overall inflation
Price = $2.99, corresponding to 64¢/100 ml
473 ml
if : T
ax of 1¢ per ounce = 12¢ for 355 ml,
the tax would then amount to 20.3%
of the initial price.
➞ The 355 ml can would cost 71¢.
Energy drink
(+/- 16 oz)
if : T
ax of 1¢ per ounce = 16¢ for 473 ml,
the tax would then amount to 5.35%
of the initial price.
➞ The 473 ml can would cost $3.15.
›› Proliferation and diversification of the product offer
Price = $
1.99, corresponding to 20¢/100 ml
Price = $2.19, corresponding to 11¢/100 ml
›› Unparalleled availability of and access
to products
IF : T
ax of 1¢ per ounce = 33¢ for 1 litre,
the tax would then amount to 16.6% of the initial price.
➞ The 1 L bottle would cost $2.32.
IF : T
ax of 1¢ per ounce = 67¢ for 2 litres,
the tax would now amount to 31% of the initial price.
➞ The 2 L bottle would cost $2.76.
Pain
Lait
Cola
›› Attractive pricing, regular product
promotions and price stability, despite
increasing staple prices
Pommes
1 L
(33 oz)
Tax of 1¢ per litre = 1¢ for 1 L,
➞ The 1 L bottle would cost $2.00.
2 L
There is widespread support for the implementation of a tax on soft and energy drinks
and consequent investment in schools. This view is shared both by the population at large and
numerous stakeholders. Along with denormalizing consumption of products harmful to health,
this taxation would be a concrete way to invest in obesity prevention.
ax of 1¢ per litre = 2¢ for 2 L
T
➞ The 2 L bottle would cost $2.21.
Tax of 5¢ per litre = 10¢ for 2 L
➞ The 2 L bottle would cost $2.29.
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
(67 oz)
Tax of 5¢ per litre = 5¢ for 1 L,
➞ The 1 L bottle would cost $2.04.
Jan-95
›› Advertising, sponsorship of major sports events,
use of celebrities who are popular with children,
contests, video games, etc.
Sprite
Conclusion
Please note: these estimates assume that the enterity of the tax paid by the bottler would be reflected in the consumer price.
Bread
Milk
Apples Cola-type soft drinks
* 1 hectolitre = 100 litres 1
2
Ludwig, D.S., Peterson, K.E. & Gortmaker, S.L. (2001). Relation between consumption of sugar-sweetened drinks and childhood obesity: a prospective, observational analysis. Lancet; 357, pp.505-508.
Californian study of 43,000 adults and 4,000 adolescents. California Center for Public Health Advocacy (2009). Bubbling Over: Soda Consumption and Its Link
to Obesity in California. Consulted at http://www.publichealthadvocacy.org/bubblingover.html
3
Crawford, P.B., Woodward-Lopez, G., Ritchie, L. & Webb, K. (2008). How discretionary can we be with sweetened beverages for children? Journal of the American Dietetic Association, 108(9), pp.1440-1444.
4
The Canadian soft drink industry represents 15,800,000 hl annually. Available at http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1172167862291&lang=eng
5
6
7
** 30 ml = 1 ounce
Survey by Ipsos Descarie between May 22-30, 2010 with 2,000 participants.
Survey by Ipsos Descarie between October 13-19, 2010 with 2,291 participants.
World Health Organization (2003). Diet, Nutrition and Prevention of Chronic Diseases, WHO Technical report series 916, section 5.2.4 Strength of evidence, Table 7, p.63.
8
Centers for Disease Control and Prevention (2008). State Nutrition, Physical Activity and Obesity (NPAO) Program, Technical Assistance Manual.
11
Health Canada (2010). Children’s health and safety campaign. Consulted at http://www.youtube.com/healthcanada#p/c/6/eTSJ6XdOotk
12
Consulted at http://www.cdc.gov/obesity/downloads/TA_Manual_1_31_08.pdf
9
10
Parker, L., Burns, A.C. & Sanchez, E. (Eds). (2009). Committee on Childhood Obesity Prevention Actions for Local Governments. Institute of Medicine. National Research
Council. Local Government Actions to Prevent Childhood Obesity. Consulted at http://www.nap.edu/catalog.php?record_id=12674
Organisation for Economic Co-operation and Development (2010). Health: OECD says governments must fight fat.
Consulted at http://www.oecd.org/document/35/0,3343,en_21571361_44315115_46064099_1_1_1_1,00.html
Faulkner, G., Grootendorst, P., Nguyen, V.H., Ferrence, R., Mendelson, R., Donnelly, P. & Arbour-Nicitopoulos, K. (2010). Economic Policy, Obesity and Health: A Scoping Review.
Consulted at http://www.hsf.ca/research/images/PDF/hsfc_epoh_finalrpt_july2010.pdf
Production of this poster has been made possible through a
financial contribution from Health Canada, through the Canadian
Partnership Against Cancer; and from the Heart and Stroke
Foundation. The views expressed herein represent the views of
the Collaborative Action on Childhood Obesity and do not
necessarily represent the views of the project funders.