A recent study in the journal PLOS Medicine recommends that placing a flat rate tax on sugar-sweetened beverages in Germany could potentially prevent or delay cases of type 2 diabetes, increase overall health and result in a financial saving of up to €9.6bn ($10.5bn) over the next 20 years. However, a tiered tax structure could potentially save up to €16bn ($17.4bn). This evidence supports other research from the UK and South Africa, which have both seen the power of sugar taxes to influence and encourage reformulation in the food and beverage industry.
The World Health Organization recommends the implementation of taxes on sugar-sweetened beverages worldwide to alleviate the social and economic burden of cardio-metabolic disease. Designing such a tax is crucial, and can be achieved through reducing consumption by increasing prices, as seen in Mexico, or through tiered tax structures like the one in the UK. Researchers at the Technical University of Munich compared a 20% flat tax on sugar-sweetened beverages to a tiered tax and predicted the potential benefits of each approach.
A flat tax could reduce sugar intake per day as well as cases of type 2 diabetes, heart disease, and stroke. However, a tiered approach, similar to the UK’s tax structure, results in a greater reduction in sugar consumption and a higher prevention of diabetes cases.
In the UK, evidence suggests that the implementation of the Soft Drinks Industry Levy contributed to significant reformulation efforts within the beverage industry. Meanwhile, South African beverage purchases have already demonstrated considerable decreases in sugar content following the announcement of the Health Promotion Levy.
Considering this evidence, Germany, which does not yet have a sugar tax in place, could potentially see significant health, societal, and economic gains if they were to implement such a tax. Governments and the beverage industry worldwide should give due consideration to the potential benefits of a sugar tax and the resulting encouragement for reformulation in the food and beverage market.
While a voluntary reduction in sugar within the beverage industry has been attempted, a more impactful change is expected if a sugar tax is adopted. A potential tax could lead to approximately 10 times larger healthcare cost savings compared to these voluntary commitments. With a considerable margin of results expected from the introduction of a tax on sugar-sweetened beverages, there is an opportunity for the government to implement necessary changes based on evidence for the betterment of public health.
