A new study from Australia’s Obesity Policy Coalition claims that a 20 per cent tax on sugary drinks would reduce consumption by 12.6 per cent. The authors reckon the tax ‘could save more than 1,600 lives and raise at least $400 million a year’.
In Britain, we’ve heard all this before from campaigners with their computer models. Sugar tax models are simple. Too simple. They assume that if prices go up, sales go down and calorie consumption declines.
The first assumption is reasonable. All things being equal, we would expect sales to fall when prices rise, although the scale of the decline is far less predictable than is implied by the spurious accuracy of the Australian study’s 12.6 per cent.
It is the second assumption that is problematic. If people spend less money on one source of calories they might spend more on another source of calories. This is known as the substitution effect and it is not just a theory. It is exactly what happens when people drink fewer sugary drinks. In the US, where most states already have a soft drink tax, a study of young people concluded that the ‘reduction in soda consumption is completely offset by increases in consumption of other high-calorie drinks’.
If, as Jamie Oliver and his cohorts claim, sugar in soft drinks was such a significant factor in the rise in obesity, you might expect obesity rates to fall when sugary drink consumption falls. But consumption has been falling for years. In America, it is at a 30-year low and yet rates of obesity continue to rise.
Surprised? You shouldn’t be. As Dr Rafael Perez-Escamilla, a professor of epidemiology and public health at Yale School of Public Health, recently explained to Discovery News:
‘The fact that the obesity epidemic in the US remains unabated in spite of significant reductions in consumption of sugar sweetened beverages, including sodas, over the past years may be related to consumers simply replacing the lower consumption of calories from sugar-sweetened beverages with calories from other food products.
In other words it is possible that individuals deciding to consume diet sodas or water instead of regular sodas are not ‘saving’ those calories but rather are simply consuming the same amount of calories or even more from other foods.’
The American experience can be filed under ‘things that actually happen in the real world’ and is therefore of no interest to sugar tax campaigners. Never mind. They will always have their computer models.