Sunday, 28 August 2016

Sugar, sugar

The government are planning to introduce a tax on sugar in carbonated soft drinks with the stated aim of reducing child obesity. On the face of it, you may ask “what’s that got to do with pubs and beer?” but of course soft drinks are a major source of pub revenue, and the ALMR have come out strongly against it.

It’s also a classic example of the slippery slope that we’re constantly told doesn’t exist.

Carbonated soft drinks only make up a very small proportion of total calories consumed, and far more are drunk by adults than children, making it a very inefficiently targeted approach. And experience has shown that taxes of this kind tend to be simply absorbed by consumers rather than prompting a change in behaviour. Effectively, it’s yet another regressive tax on the poor. I would guess that children actually take in far more calories through drinking still squashes and fruit juices, but those aren’t going to be taxed because they’re perceived as “healthy”.

By feeding through into the general rate of inflation, it would also ironically end up costing the government more, at least initially, by increasing the uprating of pensions and benefits and the yields on index-linked bonds.

The whole thing is comprehensively filleted by Christopher Snowdon:

It is bizarre to introduce a tax when you know that it will incur billions of pounds of additional costs, and the stated objective of getting soft drinks companies to reduce the amount of sugar in their products is a pipe-dream.

50 per cent of the carbonated drinks market is already made up of low calorie brands. Regular Coke and Pepsi make up a further 24 per cent of the market - and they are not going to be altered. That leaves only a quarter of the existing market that could plausibly be reformulated but it includes such brands such as Irn-Bru and Dr Pepper which are unlikely to change (both have diet versions that sell modestly) as well as brands such as Lilt and Oasis which have already been reformulated to bring them below the lower-tier 5g/100ml sugar limit. For the latter category, the levy provides no incentive to reduce sugar levels further. On the contrary, since consumers tend to prefer the taste of sugar to the taste of artificial sweeteners, the levy gives manufacturers a perverse incentive to raise sugar levels in reduced-sugar drinks up to the limit of whichever tax bracket they are in.

I think the sugar tax is a bad idea on principle but it also happens to be a terrible idea in practice.

So, a tax that won’t achieve its stated objectives and, at least, initially, will end up costing the government money. Brilliant! A classic case of “Something must be done! This is something. Let’s do it!” It’s just pathetic gesture politics to appease the likes of Jamie Oliver.

But it does give an opportunity to listen again to this unforgettable classic of Sixties bubblegum:

5 comments:

  1. Will they please just get the F out of our lives.

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  2. This is ludicrous. Adults should be able to make up their own minds what they are going to consume and take responsibility over what their children have. When I was a nipper in the 60's the bottle of Tizer was kept in a high cupboard so that I couldn't get at it (although I worked out a way of climbing to get it) I normally have a bottle of fizzy pop in the fridge. It's one of those vaguely fruit flavoured ones and I like a couple of pulls on it in the morning before my coffee. It has 0.25% sugar per 250 ml. Am I going to have to pay bloody tax on this?

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  3. Expensive to administer, highly unlikely to achieve its stated objectives and constituting a regressive tax on the poor. Correct in every respect, CM.

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  4. And yet... many who decry this latest act of lifestyle regulation would, if asked about the smoking ban, go straight into kneejerk "Not that again! SMOKING IS BAA-AAD!" mode. Such people fail to understand (or refuse to accept) that said ban was not actually about smoking, or health, or their precious feelings. It set a template; it established new parameters for state interference.

    Many surprises like the 'sugar tax' in store for the perpetually oblivious, unless the tide is turned back.

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    Replies
    1. Quite so - there are plenty of people who wouldn't recognise a slippery slope until they fell off the end of it into shit creek.

      Delete

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